GSF could be in line for a top up

Finance Minister Michael Cullen has raised the possibility of using the continued run of record surpluses to put more money into not only the New Zealand Superannuation Fund but also the Government Superannuation Fund.

Wednesday, December 15th 2004, 6:15AM

by Rob Hosking

Diverting more of the surplus into those areas is preferable, Cullen argues, to more spending or tax cuts, both of which would be inflationary.

The two options were part of a list Cullen reeled off in a briefing to journalists on the government’s latest Economic and Fiscal Update.

More payments into Cullen’s cherished pre-funded scheme was always on the cards: a longer shot is moving to fully fund the Government Superannuation Fund.

The GSF – which is made up of defined benefit schemes - has more than 70,000 members, and the Government tops up the annual shortfall.

Treasury earlier this year suggested a gradual move to fully funding the scheme, but the idea appeared to have died.

Cullen’s office yesterday confirmed it is being looked at but that the issue is at a very formative stage.

GSF chief executive Alan Langford told SuperTalk in August that at that stage nothing had been formally raised with the board, and also that any move to fully fund the scheme would cost in the region of $10 billion.

Cullen’s comments yesterday were the only new material on superannuation.

The rest simply repeated earlier rhetoric about next year’s Budget including measures to remove impediments to savings and to responding to last month’s report by Craig Stobo on the taxation of collective investments.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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