Cullen pours cold water on compulsory savings idea

Finance minister Michael Cullen has – again – poured cold water on the idea of compulsory savings.

Thursday, March 1st 2007, 5:58AM

by Rob Hosking

“I think one of the key issues here is that people tend to be in favour of compulsory savings until they are asked who will pay,” he told the Parliament yesterday.

“The assumption of employees is that employers will pay, and the assumption of employers is that employees will pay.”

And he drew a comparison with polls which have indicated support for road tolling.

“I am also already old enough now to have lived through a period when there was considerable support for tolling roads in Auckland, until we started talking about actually tolling roads in Auckland, at which point support for that seemed to disappear.

“That does tend to lead one to a certain level of scepticism, perhaps, about public support for things that people have not quite thought through in terms of who is actually paying.”

Cullen – not for the first time – also expressed opposition to “requiring compulsory superannuation savings of employees” because the government gets the blame if savings schemes get into trouble.

“If people arrive close to retirement and their savings scheme falls over—and the Government has forced them to save—what recourse do those people have at that point?”

The questions followed a poll which showed growing support for use of tax cuts to fund compulsory savings – something both New Zealand First and the government’s other support partner, United Future, have argued in favour of.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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