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Superannuitants benefit from tax package

23 August 2005

Superannuitants benefit from tax package

National Party Leader Don Brash says superannuitants will benefit from National's tax package along with all working New Zealanders.

"Our tax cuts are not just about workers. They are about retired New Zealanders as well," he told superannuitants on the Kapiti Coast today.

"They will benefit because the net superannuation payment is related to the after-tax average wage, and when we reduce tax on the average wage the benefits will flow into superannuation.

"But National is going one step further. Under the normal process of adjusting Super, the effects of the tax cuts would be delayed a year, but I am determined that retired New Zealanders get an immediate benefit from this package.

"We will provide for a one-off adjustment to the notional tax rate on the December 2005 average wage, so the impact of lower taxes will apply to superannuitants from April next year. After that the normal adjustment criteria will apply."

National expects the annual net payment for a married couple on New Zealand Super will rise by about $320 from April next year, rising by inflation to around $410 from April 2007, and then a further lagged increase from the tax cuts to around $560 from April 2008.

"Superannuitants will also benefit from our intention to scrap the carbon tax, and by our decision to retain the proposed rates remission policy."

Dr Brash said National will pay for the tax cuts by cutting wasteful bureaucracy, not by cutting essential spending. "We will not cut one nurse or one doctor to pay for our tax cuts."

He also said superannuitants who had grandchildren with student loans should be aware that National's tax cuts, together with deductibility of interest on the loans, mean most will be able to repay their loans faster than under Labour's interest write-off.

Dr Brash repeated his pledge of guaranteeing the continuation of the New Zealand Superannuation Fund, and New Zealand Superannuation at 65% of the average wage from age 65. "The rate will not change and neither will the age of eligibility. Nor will there be any means test or surcharge."

ENDS

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