Peters places retirement savings on the agenda

Treasurer Winston Peters has caught everyone on the hop with his comments on national savings levels.

Tuesday, June 9th 1998, 12:00AM

Treasurer Winston Peters has managed to put the issue of retirement savings back on the political agenda, and has indicated there are more options available than just a compulsory saving scheme.
He says New Zealanders need to increase their level of savings and the country's low level of savings has contributed to the nation's massive current account deficit.
New Zealand recorded an unadjusted current-account deficit of $7.52 billion in the year to December 31, equivalent to 7.7 per cent of gross domestic product. The deficit is forecast to have widened further in the first half of 1998.
Peters says the Government will this year formulate a package of measures to encourage personal savings.
While there are no indications of what the package will contain there are a few clues which indicate options such as tax incentives may be considered.
A capital gains tax has been ruled out by Peters, yet he says measures will be introduced to remove the incentives to buy residential property investments.
His announcement caught most people by surprise, including Prime Minister Jenny Shipley.
Shipley has given hints throughout the year that the government would address the issue of retirement savings, however Peters has trumped her.
While Peters personally favours a compulsory savings scheme, Shipley says it is not part of the coalition's agenda.
It appears Peters is not pushing such as scheme, particularly as just 8 per cent of the population voted in favour of such a scheme when it was put to a referendum last year.
Recent comments by Retirement Commissioner Colin Blair and Periodic Review Group chairman Jeff Todd indicate compulsion is not a goer.
Todd told the recent Society of Independent Investment Advisers conference that compulsion, although it had some merit, was off the agenda for a generation.

He says New Zealand First would be prepared to work co-operatively with other political parties to find durable solutions to the country's poor savings performance.
However, he hasn't made any commitment to joining the multi-party accord on superannuation.
Peters ruled out deferring the tax cuts or raising GST above the 12.5 per cent mark.

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