Tax incentives officially on the agenda
The new Government outlines its plans for superannuation.
Tuesday, December 21st 1999, 12:00AM
It said yesterday, in the speech from the throne at the opening of Parliament, that "providing an alternative tax regime more conducive to encouraging superannuation savings increasing the level of savings" was one of the key issues it wants to address in the next three years.
During the election campaign Labour deputy leader Michael Cullen, who is now the Minister of Finance, promoted the idea that the current taxed-taxed-exempt regime should be changed to taxed-exempt-taxed as it is in other jurisdictions including the United States.
It also wants to reduce the compliance costs associated with some savings schemes.
In outlining its work programme the Government said increasing the level of savings is crucial to reducing New Zealand's national debt as a proportion of gross domestic product.
The government is also committed to "putting New Zealand Superannuation on a sound and fair basis for the long term."
It aims to restore the NZ Super to the level that was agreed to in the multiparty accord in 1993. While the range was between 65 per cent and 72.5 per cent of the average weekly wage, the level set is likely to be at the low end.
Labour's plans to partially fund NZ Super with a dedicated tax of 8 cents in the dollar, appears to have been watered down as no other party, including its junior coalition partner the Alliance.
Now it says "discussions will be undertaken on moving to a dedicated tax and fund basis for New Zealand Superannuation which will create greater certainty as to long term provision."
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