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Greens push incentives for employer-funded super

Greens push Govt on incentives for employer-funded super

24 January 2002

Co-leader Rod Donald said the Greens will continue to push the Government to change the tax system to provide incentives for employers to help middle and low income workers to save for their retirement.

Mr Donald said that currently employers have an incentive to provide superannuation for staff earning more than $60,000, as super contributions are taxed at 33 cents; six cents less than the 39 cent income tax rate.

"But employers of workers earning $38,000 or less face a massive disincentive to make similar contributions because hose super contributions are also taxed at 33 cents; between 12 and 18 cents higher than the marginal income tax rates.

Mr Donald said the failure to resolve this issue in today's announcement shows the Labour/Alliance Government is happy to look after high-income earners but doesn't care about the needs of low and middle income workers. "They are discriminating against the very people they claim to represent," he said.

"This is confirmed by callous comments from Treasury this morning that the bottom half of workers have no savings and can't afford to save anyway, so a tax incentive won't help.

"The Green Party believes that there should be the same incentives for employers of well-paid staff to contribute to super schemes. That means employers of middle and low-income workers should get the same six cent incentive as employers of high income workers. Otherwise it's just not fair.

"Figures released today showing that credit card debt is up 21 percent in December, and that New Zealanders owe $3.39 billion on their plastic, demonstrate how urgent it is that the Government adjusts the tax system to encourage people to save rather than spend money they don't have.

"The lack of tax incentives is highlighted by the fact that only 12 percent of workers are members of private employer super schemes. Even worse, it was revealed by Dr Cullen today that the Government only contributes to the retirement savings of only two percent of public servants."

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