A policy with everything
Incentives, increases and compulsion all feature in New Zealand First's superannuation policy.
Tuesday, October 19th 1999, 12:00AM
by Philip Macalister
New Zealand First is determined to deliver a long-term, sustainable superannuation scheme, secure from political tampering. The principles upon which such a scheme will be devised will be fairness, sustainability, that it delivers a secure and dignified living standard and that it is within the national interest.
The abolition of the surtax was always one of New Zealand First's core policies. We delivered on our promise. We budgeted for and prepared legislation to remove income and asset testing for long-stay geriatric hospital care from 1 October 1998. The challenge now is to maintain immediate certainty whilst planning for longer term security. A compulsory contributory scheme is part of this strategy.
PLANS
New Zealand First has prepared legislation which will restore the base minimum level of New Zealand superannuation for a married couple from 60% to no less than 67.5% of the net average wage. The base level will be raised to no less than 70% in the longer term. This plan will be pursued in the interests of the dignity and security of our retired citizens and all New Zealanders who expect to retire with dignity in the future;
A subsequent adjustment of rates for single persons will be made;
War Veterans' pensions and allowances will be increased by 10%;
Receipts of superannuation at death will form part of the deceased estate - there will be no requirement to make repayments.
New Zealand First will establish a statutory body charged with the purpose of establishing a two-tier, long-term scheme incorporating the following features:
- purchasing power is to remain constant;
- the age of entitlement will be cemented in, commencing at 65 years;
- the scheme must contain portability provisions over time and between jobs, and it must be able to be drawn upon if the recipient is outside of New Zealand;
- a smooth transition from the existing pay-as-we-go scheme to an additional second-tier save-as-we-go scheme;
- the creation of a dedicated fund from savings at 3% of gross earning, rising to 8%, and accompanied by equivalent reductions in income tax rates;
- the first $5,000 of gross income to be exempt from this savings requirement;
- individual entitlements will be tagged for an individual, guaranteed by the state, and will untouchable by future generations of politicians; and
- national interests for enhanced domestic savings are maximised.
Incentives for saving should be part of any lasting scheme;
New Zealand First will pass legislation which ensures that any modifications to the scheme can only be made with a 75% majority in the House of Representatives;
Any new scheme would not affect any person who at the time of introduction was aged 55 years or older; and
New Zealand First will introduce a "Home Equity" scheme, run by the Government, that allows retirees to finance additional expenditure by utilising their home as a secured asset.
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