Old thinking revealed in super policies
In part two of SuperTalk's series on political parties' superannuation policies Rob Hosking looks at Labour, National and United Future's positions.
Thursday, January 17th 2002, 4:46AM
by Rob Hosking
United FutureSandwiched between the two main parties, and often drowned out by the more raucous of the smaller ones, is United Future. Leader and sole member of Parliament Peter Dunne broke with Labour in the mid 1990s over taxes he is in favour of a lower rate and has since linked with Future New Zealand, the more moderate of the two Christian parties.
Dunne has been described as "pathologically reasonable". Voters have for years told pollsters and each other that they are fed up with "all this squabbling" politicians indulge in. A common tea-room sentiment is that our MPs should stop automatically slagging the other side and try to engage with the issues. In short, Dunne is almost exactly the sort of MP New Zealanders tell each other and themselves that they want yet they still go out and vote for all those other grandstanding, squabbling headline grabbers.
A quick test, and no peeking now: can readers say off the top of their heads what United Future¹s position on superannuation is?
In fact, Dunne prepared a minority report to the finance and expenditure select committee's report on the superannuation bill. He is supporting the bill, but with strong reservations: he believes it is not clear what the impact on savings patterns and the economy overall will be, and he believes that in the future voters may want to revisit the implicit super fund/tax cuts trade-off.
However, the party's position is that those concerns are secondary to the more pressing need for some certainty on the issue, after a generation of mucking around.
In short, Dunne's position is restrained, reasonable and hardly anyone knows what it is.
National
National is probably the most interesting party on superannuation at the moment. It is gun-shy on the issue. It wants to quietly hose down the issue of current entitlements by reverting to the "65 at 65" policy; ie: it is now sorry about those 1998 cutbacks. As for the future, it says there isn’t a problem.
Meanwhile the pre-funded scheme is a useful stick to beat the government with: Labour, goes this line, is borrowing to pay the mortgage, and investing your savings in dodgy offshore stockmarkets.
Much has been made of National’s move away from ideology since its defeat in 1999 and especially since Bill English took over the leadership from Jenny Shipley.
National is not, normally, a right wing party. It is a conservative party, although the terms are commonly interchanged.
The former is a set of clear policy goals; low taxes, small government, stand-on-your-own feet individualism, and a strong police force.
Conservatism is more a temperament than an ideology: Its starting point is a suspicion of radical change of any sort, and a reluctance to rock the boat.
There is a preference for the right wing policy goals outlined above, but it is a tendency rather than zealotry.
Politically it has two advantages: firstly, people do not much like change, and tend to punish those who bring it; and secondly, it is highly flexible. It allows a party to, for example, be broadly in favour of globalisation but also rail against the super fund being invested in offshore equities markets.
National experimented with zealotry only briefly: in the early 1990s, when Ruth Richardson was Minister of Finance; and, more briefly again, under Jenny Shipley.
The downside of this sort of conservatism is that its "don’t rock the boat" tendency means long term problems are often ignored.
National’s political heyday in the 1960s, under its most successful leader Keith Holyoake, saw two of New Zealand’s long term problems palliated rather than attacked: the inevitability of Britain joining Europe, and the (follow on) huge impact that would have on our agricultural exports; and the long term social and economic impact of the drift of Maori from the country to the cities.
We could yet see that kind of neglect in the superannuation area. If even the more moderate demographic forecasters are right, then National could be doing that again.
Labour
Labour’s superannuation policy is similarly a throwback to earlier thinking. The last real Labour government was ignominiously thrown out in 1975, and in policy terms the 1980s and 1990s should not really have happened, according to the party’s leading lights.
For historians, Labour is trying to meld the approach of two of its lost leaders into a combination that will work – the idealism of the Norman Kirk years in 1972-74, allied with the fiscal rectitude of, Arnold Nordmeyer (who is, incidentally, one of Cullen’s political heroes).
The Kirk government saw the highly controversial compulsory superannuation scheme, a government-run fund which would have taken savings and invested them in New Zealand’s businesses.
If the Helen Clark-led government has an overarching theme, it is that we are going back to the 1970s, and we’re going to get it right this time. The Kirk government, followed by Muldoon, discredited government action in all sorts of spheres, but this government wants to bring it back – but in suitably restrained fashion.
So, this time around the super scheme is being run by the government, but at arms length. It will be paid for out of surpluses (even if some of those surpluses are a bit dubious) and it will only cover some of the entitlement. It will though - like the moves to put workplace ACC back into a state run monopoly, the regional development programme, Industry New Zealand, and the proposal to extend health and safety law to cover stress in the workplace – put the state back into a central role, which is the central aim of this government.
The Act party's position was outlined in an earlier article,
Act at sixes and sevens on superRob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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