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Greens win super change

Greens win super change

The Green Party has persuaded the Government to introduce a lower superannuation tax rate to help low income workers to save for their retirement.

The Finance Minister, Michael Cullen has announced today that he has asked the Finance and Expenditure Committee to amend the Tax Bill to incorporate a new 15 per cent tax rate on employer superannuation contributions for employees earning less than $9,500 a year.

"We are pleased to have persuaded the Government to extend its progressive superannuation tax legislation so that low income, part time and casual workers are no longer penalised for saving for their retirement," said Green MP Rod Donald.

"I hope the new low rate will encourage more employers to offer subsidised superannuation to all staff, not just the well paid," he said.

Until the bill was introduced, employer superannuation contributions were taxed at a flat rate of 33 per cent. This penalised employers who provide subsidised superannuation to staff earning less than $38,000 while providing a 6 per cent tax inventive to employers subsidising staff earning more than $60,000.

"It's good that the Government has taken two steps in the right direction by firstly introducing the 21 per cent tax rate in the bill and now agreeing to add a 15 per cent rate, but it should go further.

"Ever since the Government introduced the 39 per cent income tax rate we have urged them to extend the six per cent tax incentive across the board. It's simply not fair that the already well off benefit from a generous tax incentive while the rest of the work force misses out.

"Giving low and middle income New Zealanders a real incentive to save for their own retirement would only cost $77 million per year, a fraction of the annual cost of the New Zealand Superannuation Fund," Mr Donald said.

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