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Labour and the Alliance differ on super

One area Labour and Alliance are unlikely to agree on if they form a government after Saturday's general election is superannuation.

Tuesday, November 23rd 1999, 12:00AM

by Philip Macalister

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One area Labour and Alliance are unlikely to agree on if they form a government after Saturday's general election is superannuation.

Labour's policy is built around shifting from a pay-as-you-go New Zealand Superannuation scheme to one that is partially funded. It acknowledges that in 15 years time the cost of NZ Super will be unsustainable unless taxes are raised, debt is used for funding, or Government spending is cut.

To deal with this fiscal problem it is proposing to hive off 8 per cent of the general taxation revenue and put it into a separate fund that is run at arms-length from the Government by professional fund managers.

Alliance leader Jim Anderton says he would only support the Labour policy after it has been "subjected to close scrutiny by experts in the field."

"We may find there are better ways of doing things," he says.

Anderton says Labour and the Alliance agree that NZ Super should be publicly funded and paid out of the tax system. The difference is how it is paid for.

He says there are other sources of funding available to the government besides the direct tax take, and these should be considered in the whole exercise.

Funding NZ Super from the entire government revenue base is a better way of doing it, he says.

Both parties are also supportive of keeping NZ Super as a universal entitlement, and increasing it to levels set out in the former Superannuation Accord. (The Accord said pensions should be between 65 per cent and 72.5 per cent of the average weekly wage. National last year cut it to 60 per cent and linked it to the CPI as opposed to wages).

Anderton describes the current superannuation system as sustainable and efficient.

"It is the cheapest and most efficient form (of super) known to mankind," he says.

For full details on the Superannuation policies of the major parties visit Supertalk

Super - Political football kicked into touch

Analysis of policies

Have YOUR say on Super in the Discussion Forum

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