Entrenching super "unusual"
Victoria University's Institute of Policy Studies says that entrenching retirement income policy would be an unusual step.
Monday, March 13th 2000, 12:00AM
Finance minister Michael Cullen announced last week, in the Budget Policy Statement, that the government wanted to bank its surpluses into a dedicated super fund, as opposed to using the money to pay down New Zealand's debt.
He favours "entrenching" it in law so that a bare majority of a future Parliament could not change it.
However, a Victoria University Institute of Policy Studies paper on stability of retirement income policy shows that while entrenchment is possible, it is not easy.
The Institute says that under the doctrine of Parliamentary sovereignty Parliament is not competent to bind successors Parliaments.
"Parliament has an incapacity to limit its own power. This means that no Parliament is able to place direct limits on the ability of a future Parliament to alter retirement income policies."
While there is the issue of parliamentary sovereignty to be considered there is a developing legal opinion that under a "manner and form" argument the fund could be made untouchable through either entrenching legislation or through the use of referenda.
The idea with the legislation is that it would require a special majority of votes to change it at some future date. The Catch-22 though is that to enact the legislation in the first place the Government would have to have that special majority.
Under the present arrangement where there is a minority coalition government, such a majority would be extremely difficult.
The paper says using entrenching legislation for superannuation "would be an unusual step in that entrenchment is currently reserved for constitutional issues."
The alternative is to use referenda to make changes, but this again is plagued with difficulties.
"Deliberation by a fully informed body may be difficult to arrange within a referendum framework. In particular, it is likely to be difficult to ensure the adequate provision of information to relatively uninformed voters. There is also a risk that referenda may be vulnerable to special pressure groups dominating the provision of information.
Many issues relating to retirement income policies would be difficult to reduce to simple, broad questions."
The institute also says there are a number of other issues, namely:
- Having matters of policy determined by referendum is unusual and represents a significant change from current practice
- Referenda could make policy inflexible when confronted by changing circumstances
- Referenda tend to be blunt and bipolar in nature while retirement incomes is a complex policy area.
- Referenda are expensive to conduct
- Referenda may not necessarily ensure stability in that they reflect the views of voters, which may alter over time.
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