"The Peters scheme raises pensions, lowers taxes, introduces incentives to save and makes superannuation compulsory. There are some key details missing – like what level of the state pension workers will lose when they build up their own savings. But it looks remarkably like the scheme that the country debated in 1997 and rejected by 92 percent to eight.
"Mr Peters says the country can’t vote the problem away. Equally, he can’t assume a problem away. The problem is that the numbers needing retirement income will grow. Cutting taxes to pay for savings doesn’t reduce the amount of tax income needed to pay pensions to those who are already retired, and those who will not be able to save enough between now and when they retire. So what has to give? Health? Education? Mr Peters has to put up. How much money will be needed, and what is going to be cut?"
Mr Harris said the "save now to lose the state pension later" was of no value to workers. "They are forced to save now to allow the government to cut pensions in the future. They will not be saving for themselves. They will be saving for the government. It seems pointless to give incentives to people to do what the government is going to make them do anyway! The nasty aspect of this is that all the inequalities that have emerged in work will be compounded in retirement. Saving eight percent, when your wages are pathetic, and you are out of a job as often as you are in one, makes for a miserable retirement. Women, who live longer, have the most to fear.
"All of this was canvassed during the referendum. The numbers don’t add up. The scheme is grossly unfair. Financing private savings out of tax cuts just compounds the problems we face with health, education, housing and provision of employment. Cutting taxes to finance private savings does not add a single dollar to national savings. It doesn’t in any way deal with the low national savings rate that Mr Peters laments.
"This matter has been disposed of through the democratic process. If Mr Peters says that it is a non-negotiable item for his participation in a future coalition, he is saying that in a democracy, eight percent can dictate to ninety-two percent. That is unacceptable. The only way voters can protect the integrity of the democratic process is to deny him the opportunity to dictate," Mr Harris said.
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