ACT Announces Super Position

Monday 13th Nov 2000
Richard Prebble Media Release -- Economy

The ACT party will support Finance Minister, Dr Michael Cullen’s, superannuation scheme to select committee, said ACT Leader, Hon Richard Prebble.

The ACT Party held a press conference today to publicly state ACT’s position in the superannuation debate.

“ACT believes all New Zealanders must have security in their retirement and agrees with the government that a tax-based super scheme is unsustainable.

“ACT realises that currently the coalition does not have a firm commitment of votes to introduce the legislation. Labour and the Alliance are a minority. The Greens have withheld support. Mr Peters has indicated that New Zealand First may or may not support the legislation’s introduction. National has criticised the plan and have not given any indication.

“As the pro-business party, ACT is the coalition’s strongest critic. Some within the Party have not wanted ACT to give the coalition any support. There are valid criticisms of Dr Cullen’s proposed scheme, but opposing everything the government does is first-past-the post party politics. The ACT Party, in the interests of all New Zealanders, will support the Cullen scheme to Select Committee.

“ACT, from its founding by Sir Roger Douglas, has continually warned of the coming superannuation crisis and urged a comprehensive saving-based superannuation scheme. Cullen’s scheme, as proposed, only smoothes out the problem for baby boomers. It is not a permanent answer.

“A twenty year old will pay into the fund all their working life only to find the fund will ‘dry-up’ during their retirement! ACT is also worried that the scheme is being presented as a ‘free lunch’. It is not. There are only two ways a government can sustain Cullen’s scheme – increase taxes or cut government spending. There are many other valid concerns.

“When addressing caucus the Finance Minister indicated that the government would look at amendments. ACT will move amendments it believes will strengthen Cullen’s proposal, and if unsuccessful, will accept Helen Clark’s challenge to make superannuation an election issue.

“ACT sees superannuation as more than just a plan for retirement. A majority of adults today own no more than their clothes and personal possessions. They have no stake in their country. ACT believes we can only give security through saving. ACT will encourage education and debate on super and put forward the principles we believe a sound superannuation policy must contain,” said Hon Richard Prebble.

Questions and Answers on Superannuation

Is This A Policy Launch?

No. ACT believes all New Zealanders must have security in their retirement. ACT agrees with the government that a tax-based super scheme is unsustainable. Surveys show that over two-thirds of all voters want a savings-based super scheme and more co-operation between political parties. There are valid criticisms of Dr Cullen’s proposed scheme, but opposing everything the government does is first-past-the post party politics. The ACT Party, in the interests of all New Zealanders, will support the Cullen scheme to Select Committee.

Does This Mean ACT Supports Dr Cullen’s Plan?

ACT supports a multi party accord on superannuation. Currently the coalition does not have a firm commitment of votes to introduce legislation. Labour and the Alliance are a minority. The Greens have withheld support, while New Zealand First may or may not support the legislation. National has criticised the plan and has not given an indication either way. ACT believes all New Zealanders will welcome honest debate on superannuation. Select committee examination will guarantee this debate.

What Would ACT Like To See Happen To Super?

ACT, from its founding by Sir Roger Douglas, has continually warned of the coming superannuation crisis and urged a comprehensive saving-based superannuation scheme. However, ACT realises that a multi party accord on super is important to the successful progress of a superannuation scheme. When addressing caucus the Finance Minister indicated that the government would look at amendments. ACT will move amendments it believes will strengthen Cullen’s proposal, and if unsuccessful, will accept Helen Clark’s challenge to make superannuation an election issue.

What Is Wrong With Cullen’s Plan?

A twenty year old will pay into the fund all their working life only to find the fund will ‘dry-up’ during their retirement! The Cullen scheme, as proposed, only smoothes out the problem for baby boomers. It is not a permanent answer. ACT is also worried that the scheme is being presented as a ‘free lunch’. It is not. There are only two ways a government can sustain Cullen’s scheme – increase taxes or cut government spending. There are many other valid concerns.

Where Does ACT Stand?

ACT’s superannuation policy is that people accept personal responsibility for their retirement income through individual private savings accounts with opt out provisions. ACT favours a safety net for those unable to provide for themselves. ACT supports protecting the position of the existing retired and a transition phase of sufficient length to ensure that people who are close to retirement are protected.

Where To From Here?

ACT sees superannuation as more than just a plan for retirement. A majority of adults today own no more than their clothes and personal possessions. They have no stake in their country. ACT believes we can only give security through saving. ACT will encourage education and debate on super and put forward the principles we believe a sound superannuation policy must contain.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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