Budget damp squib for retirement savings
What was in the Budget for the financial services industry.
Thursday, May 20th 1999, 12:00AM
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What Bill Birch said about savings Our growth prospects in the future depend on better savings and more productive investment. In the past, household savings have been low and heavily focused on housing. The response to our recent public floats suggests the start of a welcome diversification. The Superannuation 2000 Taskforce will, among other things, examine the impact of superannuation on incentives to save. This Government is committed to providing a tax and expenditure system conducive, not only to saving, but to investing those savings where they generate the best return for New Zealand. We will continue to work to improve tax neutrality for savers across savings products. |
While superannuation is likely to be a key issue in this year's general election, the Budget barely gave it a mention. The one main area where there was a win was in securing $2.6 million over the next three years to fund much-needed research measuring the level of household savings and net worth.
Key issues, such as providing solutions to the tax inequities facing different savings vehicles were only mentioned in passing.
The key points of the budget for the financial services industry are as follows:
- Funding of $2.6 million over three years for a measuring household savings levels
- The Government says it will work towards establishing tax neutrality for savings products
- The Super 2000 taskforce will look at the impact of superannuation on incentives to save
- Death duty (zero-rated since 1992) will be removed from the statute books.
- Stamp duty on the sale of rural properties and businesses is being abolished (see earlier story in Mortgage News section).
"Better information about New Zealanders' saving and net worth will assist the development of sustainable retirement income policies that respond to the needs of New Zealand's ageing population," Retirement Commissioner Colin Blair says.
The lack of good information about savings levels and habits has been a major impediment to developing sustainable retirement income policies. The need for a household net worth survey was one of the recommendations of the Periodic Review Group that reported to Parliament in December 1997.
Since then a working group was established to scope out what information is required.
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