The Labour Party has signaled that the compromises it made on superannuation when the Accord was signed in 1993 are pretty much its bottom line on the issue now.
The Labour Party has signaled that the compromises it made on superannuation when the Accord was signed in 1993 are pretty much its bottom line on the issue now.
Deputy leader Michael Cullen says the party will be retaining its 1996 superannuation policy for next year's election.
The primary planks of this policy are that superannuation remains a universal entitlement paid from the age of 65, within the current band of 65 per cent and 72.5 per cent of the average weekly wage.
The other key feature of the policy is that a portion of the current tax take (eight cents of each dollar) is paid into a dedicated superannuation fund.
Commercial managers would manage this fund at arms length from the Government.
Cullen says the alternatives to a dedicated fund would be either to cut entitlements, by measures such as income testing or increasing the age of eligibility or to do nothing and accept significant future tax increases.
Labour's policy has received a mixed reaction from the Investment Savings and Insurance Association. It says the policy merits a part pass mark.
From the ISI's perspective policies to encourage economic growth and better tax laws is a plus, however it describes the dedicated fund as ''a reversion to the old social security tax''.
It also believes having a universal part-funded retirement benefit would weaken the scheme.
Cullen says income and asset testing the pension would produce little and hit wage earners.
Such a move would be politically unpopular and would be overturned at the ballot box by future generations.
"Clawing back (Telecom chief executive) Rod Deane's super doesn't get you much. It isn't worth the candle," Cullen says.
The Labour Party has signaled that the compromises it made on superannuation when the Accord was signed in 1993 are pretty much its bottom line on the issue now.