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Superannuation report misses a few key points

Media release 19 December 2003

Superannuation report misses a few key points

The 2003 report of the Periodic Report Group (PRG) is generally on target, though misses a few key points, says Business NZ.

Chief Executive Simon Carlaw says it's good news that the report does not favour either tax incentives or compulsory superannuation. "As the report notes, the focus should be on education and information, removing existing tax distortions and reducing compliance costs. We also agree that there is potential for more opportunities for people to save for retirement through deductions from wages at source, into flexible, portable superannuation schemes."

Mr Carlaw says the report fails to address the impact of decisions that are making people think that they don't need to save for their retirement, particularly the establishment of the NZ Superannuation Fund.

"The existence of that scheme, that can never fund more than a fraction of the future costs, is making people too complacent," Mr Carlaw said.

"We have concerns about the sustainability of NZ Superannuation, particularly at current levels and eligibility. Economic growth is the only way to ensure that future retired generations have the standard of living of their parents and grandparents. The Government must get serious about returning New Zealand to the top half of the OECD and use the breathing space we currently have to ensure the economy can deliver into the future.

"And employers will be concerned at the report's recommendation that 'pay equity' should be encouraged to address women's savings. The gender earnings gap is already closing without the Government needing to impose pay equity on employers through the guise of retirement saving."

ENDS

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