Policies analysed

One thing that is indisputable about superannuation is that the politicians have for years handled the subject poorly. They have been inconsistent, used it for political points scoring and had a short-term focus about something that is long-term.

The past electoral term has been no exception. Firstly, there was the failed referendum on New Zealand First's Retirement Savings Scheme (RSS). Following that the Government abolished the surcharge, then it unilaterally lowered the floor of New Zealand Superannuation to 60 per cent of the average weekly wage. To top the three years off the Government has effectively killed the Accord (technically though it still survives), continued to extend the capital gains tax regime, ignored the Periodic Review Group's report on retirement income issues and all but killed employer sponsored schemes.

The positive features of the past term are few, and not particularly big. To many people the failure of the Government to get the Taxation on Life Insurance and Savings (TOLIS) bill passed into legislation was a plus. Other pluses include the announcement in this year's budget of funding for a proper wealth survey.

Making a call on the establishment of the Super 2000 Taskforce is tricky. To some it is a plus as it involves representatives from society and all the political parties have been invited to participate. To others it's a cop out and a plan by the National Party to go into the election without a superannuation policy.

The other commonly raised drawback is that it takes up more valuable time. Since the Taskforce isn't due to report back until November 2000, it is unlikely any changes could be implemented until 2001.

On the other hand the Labour Party is campaigning vigorously on a policy which takes quite a different approach to superannuation. It wants to encourage voluntary savings by introducing tax incentives, and it wants to shift funding of New Zealand Superannuation from a pay-as-you-go basis to a partially funded one.

The key to this is putting 8c of every income tax dollar into a consolidated scheme which is run by a "board of guardians" on a commercial basis at arms-length from the Government. (To see full policy click here).

Of the minor parties only the Alliance has released any policy (although not formally). In the past both Act and New Zealand First have held very similar positions, that is to have a compulsory scheme where each contributor has an individual account. Such an approach is similar to what was defeated in the RSS referendum.

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