Retirement Income Report 2003
19 December 2003
Retirement Income Report 2003
"The Periodic Report Group has missed an opportunity to make a useful contribution to the debate about long-term retirement income policy", the executive director of the New Zealand Business Roundtable, Roger Kerr, said today.
Mr Kerr said that the PRG report acknowledges at the outset that "there is no room for complacency about the current system's ability to provide for future cohorts [of retirees]". It also says "PRG 2003 would like to see an open and informed discussion about future retirement provision". In this context, it mentions possible changes to the age of entitlement for New Zealand Superannuation, the rates of benefit, and the case for targeting NZS.
Having said all this, however, it shies away from any discussion of these issues, claiming it was "not within our remit to do so". This is a complete cop-out. The PRG's terms of reference required it to make "suggestions for the adjustment of any of the Government's retirement income and savings policies in order to enhance the provision of private retirement income". The shape of NZS has a powerful influence on private savings decisions. The report does note that the universal benefit feature of NZS scores poorly on equity grounds.
The PRG report also fails to engage with criticisms of the Cullen Fund made in submissions.
The report correctly emphasises the paramount importance of economic growth for the living standards of future retirees. Once again, however, it ducks any comment on the government's many anti-growth initiatives, and it provides no advice on better pro-growth policies.
Some comfort can be taken from the PRG's conclusions that tax concessions for savings have more costs than benefits, and that Australia 's compulsory scheme has little to commend it in a New Zealand setting. These policy debates appear to have been settled, which makes the lack of discussion of the parameters of NZS, and of the case for lower overall levels of government spending and taxation to encourage private savings, all the more disappointing.
Mr Kerr said the Business Roundtable had opposed the recommendations of the Hickey working party and the Securities Commission for regulation of prospectuses and investment advisers. It was pleased to see the PRG criticism of mandatory prospectuses for employer superannuation schemes and its proposals for a self-regulatory regime for investment advisers.
"Overall, however, the PRG seems to have done little serious work - many of its recommendations involve further work by others - and it has produced a lightweight report that does little to advance public understanding of future superannuation challenges. The efforts made by submitters have largely been wasted. There is a need for more debate and consensus on retirement income policy, but future bland, politically correct reports of this kind would be hardly worth having", Mr Kerr concluded.