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"Impoverished Future" For Retired Kiwis

22 July 2002


Labour/National Policies Promise An "Impoverished Future" For Retired Kiwis

"Superannuation polices of both major parties will insure that the 'well-earned Kiwi retirement' becomes a poorly-deserved impoverished future," says Grey Power's superannuation spokesperson Frank Moloney.

"Thousands of elderly New Zealanders can expect a poverty existence from the recent Labour government legislation that effectively lowered married couples' superannuation entitlements to 65% of the net after-tax average weekly wage."

"In the mid-1970's, the Muldoon National government dismantled the compulsory, individual income-related superannuation scheme then replaced it with the genesis of the present New Zealand superannuation tax-funded scheme, setting the payment at about 80 per cent of average wages," Mr Moloney says.

"New Zealanders were promised that their lifetime contribution to the building of the nation guaranteed them a stress-free, enjoyable life beyond working years. They were not told that further personal income would be necessary to bring them up to a mere subsistence level.

"From Ruth Richardson’s ‘Mother of all Budgets,’ each successive government has deliberately engineered the lowering of New Zealand superannuation.

"Richardson withheld yearly Consumer Price Index adjustments for two years. Soon after, selective tax cuts for those earning above the base tax-rate of $9500 badly disadvantaged superannuitants," Mr Moloney says.

"In 1998, the National government's Todd Task Force Report on Superannuation recommended changes that recognised new weighting of statistical data which lowered the 'acceptable' average wage. This was seized upon and from that point, paper boys, teenagers in supermarkets and every other ‘Clayton' wage, artificially lowered the average wage benchmark by $18 per week. The effect on superannuitants was devastating!

"National legislated further reductions in 1999 to a ridiculous 60% of average wages. This politically inspired Labour to make their last election ‘restoration pledge'. But now Labour has reduced the restorative 67% back to 65% and apparently intends to also consign superannuitant’s to continued impoverishment and social isolation."

Mr Moloney says "the living allowance of retired citizens in a decent society must have adequate and stable relativity with the national average income. The 42 per cent of the net (after tax) paid to single retirees and the 65% shared by retired married couples seldom provides bare essentials.

"Regular living costs above the annually fixed Consumer Price Index means many thousands of older New Zealanders will be unable to participate in the normal activities of their communities. They will miss meals, be unable to visit their doctor and live a life of poverty not seen in New Zealand for many decades."

Mr Moloney says that "Grey Power recently sought assurances from the Prime Minister Helen Clark and Finance Minister Michael Cullen that the 67.73 per cent level paid in April, 2000 when honouring their pledge be maintained during the full term of a Labour led coalition government. No assurance has been received."

Grey Power has a paid membership of 76,000 and several more thousand members registered as married couples. It is the country's largest single group of voters.

Ends.

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