Politicans actually agree on major super issues

Politicians, as has been pointed out before on SuperTalk, agree that the state should provide a pension to its elderly set at 65% per cent of the average weekly wage for a married couple aged 65 or more.

The only party wanting to change this is New Zealand First. Its leader, Winston Peters, says the rate should be moved up to 72.5% as soon as possible.

The disagreements on tier one provision are what should happen in the future and how the state pension should be adjusted each year.

Act's Rodney Hide is quite clear that the level of the pension needs to be cut in the future and he is advocating that it be indexed to inflation, not wages.

The net effect of such a move would be to break the link between the growth of the economy and therefore slowly erode its relative value (assuming wages rise faster than inflation).

National Party superannuation spokesman Gerry Brownlee says the party doesn't have a policy on this part of super yet.

His personal view is that people some way out from retirement, say 20 years, should be told that NZ Super is going to be cut so they better start saving now.

"Quite clearly (NZ Super) is going to fall over a long period of time," he says.

"We should be signaling now to (younger) New Zealanders...that things are not going to be the same in the future."

Brownlee also says the age of eligibility is "inevitably" going to increase.

Act is also keen to push out the age of eligibility.

The other issue of contention on tier one provision is how the Government is going to pay for it in the future. Estimates are that the cost of NZ Super will rise from 4% of gdp to 9% over the next two decades.

Labour and the Alliance's position is to introduce the New Zealand Superannuation Fund (aka the Big Cullen Fund) which will help pay a portion of future costs.

Peters says that although NZ First voted in favour of the NZSF it doesn't believe the fund is the answer.

He told the conference that he voted for it so he could then put pressure on the Government to convert it into individual accounts.

United's Peter Dunne is in favour of the fund. He says it is a starting point and that parties would be foolish to disband it.

Act, Greens and National all want to dismantle the fund.

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