Cullen gets support for his big fund

Finance Minister Michael Cullen is taking heart from an International Monetary Fund (IMF) report on New Zealand which is supportive of the New Zealand Superannuation fund.

"I...welcome the IMF's support for the partial pre-funding of New Zealand Superannuation," he says.

Currently the Government is putting $23 million a fortnight aside for the fund. This money is in a cash account run by the Debt Management Office.

Cullen said yesterday he hopes to be able to appoint Guardians to run the fund by the end of this month. This group of five to seven people will be responsible for developing the investment mandate and selecting managers.

Cullen hopes the fund will be up and running by the middle of the year.

Cullen has also challenged National to "come clean" on its intentions for superannuation.

He says National wants to cut the rate of the state pension, NZ Super, for people who are either in or near retirement. National has yet to publicly declare that as its policy, consequently it hasn't given any numbers.

However, National's superannuation spokesman, Gerry Brownlee, has said that cutting the pension is highly likely.

His personal view is that people some way out from retirement, say 20 years, should be told that NZ Super is going to be cut so they better start saving now.

"Quite clearly (NZ Super) is going to fall over a long period of time," he said at a conference recently.

"We should be signaling now to (younger) New Zealanders...that things are not going to be the same in the future."

Brownlee also says the age of eligibility is "inevitably" going to increase.

Brownlee gets some support here from the IMF which promotes what Cullen calls the "policy mantra" of time limited benefits, pension cuts, a tax on home ownership.

Cullen says nothing could persuade the Labour-Alliance coalition that these policies were desirable or would contribute to the improvement of living standards.

"The IMF's credibility is not assisted by the fact that it tends to apply the same policy template regardless of the country circumstances," he says.

Cullen's Speech

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