5 April 2002

Finance Minister Michael Cullen today confirmed that the Labour-Alliance government would retain 65 as the age of entitlement for New Zealand superannuation.

He was commenting on the release of a Treasury working paper arguing that a lifting of the age over time would reduce the fiscal burden of an aging population.

Dr Cullen took issue with claims from National MP Gerry Brownlee that the government had commissioned the report. “Either Mr Brownlee is being deliberately mischievous or he is unfamiliar with the purpose of Treasury’s working paper series.

“The papers are generated from within the Treasury, not from the government, and are intended to inform Treasury’s internal policy debate.

“The Labour-Alliance coalition’s position is clear. We will secure the pension at current entitlements into the future by building up a capital fund to help meet future costs.

“The risk to New Zealand Superannuation is not from the centre left but from the centre right. Act is already on record as supporting an increase in the retirement age to 68.

“National is more insidious. If the latest reports are correct and a National government would scrap the 39 cent top tax rate and cut the corporate rate back to 30 cents, it would need to find around $950 million a year to pay for those promises.

“And National has already identified New Zealand Super as a potential area for cost cutting. That is why it has been careful to say that it cannot guarantee existing entitlements except for the currently retired and the soon to retire,” Dr Cullen said.

“There is no such thing as a free tax cut. Someone always has to pay. In this case it will be the people who are in their fifties now and younger, and they will pay through a lower standard of living when they are elderly and vulnerable.”

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