Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


NZ Superannuation Bill – 1st Reading Prebble

New Zealand Superannuation Bill – 1st Reading Hon Richard Prebble Speech

Thursday 14th Dec 2000 Richard Prebble Speech -- Economy

I rise on behalf of the ACT party to discuss and debate the introduction of the New Zealand Superannuation Bill. It is a bill to establish a fund to be administered by an independent board of trustees in order to provide an amount of money to assist in the payment of State pensions.

The ACT party intends voting for the introduction of this bill. Let me make clear the basis on which we are doing so. The first is this: is the present superannuation scheme sustainable? Can we pay out of taxation an adequate pension to future retirees? The fact of the matter is that when the baby boomers retire, and they will start retiring in a decade's time, the number of people who are retired compared with those who are working will change dramatically.

It will be very difficult for the State to be able to pay a pension that is the equivalent of the present pension. That is a fact that is widely known. It is an issue that has been facing this Parliament. We have known about it all of my adult life. For that reason, the ACT party is prepared to support this measure, because at least this Government is acknowledging that this is a problem and it is putting up what it thinks may well be a solution. That is constructive.

In fact, for more than 20 years the electorate has been asking this Parliament to try to get some bipartisan agreement on superannuation, because people understand that if this is a matter of party politics and keeps changing every few years there is no security in anybody's retirement. I am pleased to say that the party I lead has consistently said that we are prepared to sit around the table with other political parties to try to get as much consensus as we can.

The only way we can do that with this Government is from this bill, because it has said: “Yes, we'll talk to you, but only on our terms. Here is our bill. You come to the select committee and we will talk there. No, we are not prepared to meet without preconditions to all parties.'' I say to the Government that that is a shame, because it ought to have. We should have sat around the table.

I also say to the Labour Party that its record on superannuation is not one that it can be proud of. It has played the superannuation card when it has suited it. The Labour Party was quite happy to rip up the accord, to use it last election, and say to superannuitants: “Here's another $20.'' without having come up with any plan on how that could be sustainable.

Having said that about the Labour Party, of course, the National Party's record on superannuation is a matter of shame. Sir Robert Muldoon's scheme was the biggest political bribe of all time, unsustainable, and we are still paying the debts that we accumulated at that time to pay for that unsustainable scheme.

After Jim Bolger used superannuation in order to get power, he then did try to get an accord. The difficulty was that the accord was not one that had involved the public. Having said that, the ACT party says: “Yes, let's do it.'' We have a duty to examine the proposals that are being put in front of us. I have some real concerns about the way in which this scheme is put together and the statements made by Dr Cullen about it.

First, the scheme is not a savings-based scheme. It is just a scheme where we will tax extra for 20 years to help lower tax for the next 20 years. It is extra tax. When the Government says that it is taking the money from surpluses, that sort of implies that this is a free lunch. We have a duty to say to voters that it is not a free lunch. Surpluses are taxes that could be spent on hospitals, schools, or given back to New Zealanders whose money it is, but instead they will go into a fund.

Indeed, Dr Cullen is committing not just this Parliament but future Parliaments to extra taxation. That is the first point.

The second point is the size of the fund. If $2 billion a year goes into that fund, in today's dollars, it will grow to $50 billion. That is half of the total size of New Zealand's economy. That is enough money to buy every single share in every public company in New Zealand and still have some change left over. That fund will be controlled by politicians.

Members can say that it will have an independent board of trustees. We have seen what has happened to independent companies in New Zealand. Timberlands was an independent company. Its director, Kit Richards, wrote a letter, which the Prime Minister did not like, he was fired. It was completely against the law. That shows how much independence there is.

Timberlands had statutory independence, but that was overturned. We have already heard from the Greens and the Alliance that they will insist on the way the fund is invested. We as politicians know that politicians will not be able to keep their hands off that fund; certainly, not a fund the size of $50 billion.

I put it to members that in an election year when the New Zealand dollar is not doing well and we can remember that happening then the smart thing to do for the fund and for the benefit of the fundholders would be to transfer money out of New Zealand prior to an election. Who believes that any politician would allow that to happen? Of course, they will not. In fact, they would decide in an election year that it would be a good idea to invest it in certain marginal electorates. Of course, we will see that, and that is what I fear.

Another matter no one looks at is that people talk about the distortions of building up such a fund, and it will be enormous. Then we should think of the distortions of running it down. Running down a fund equal to half the economy over 20 years could cause a recession for 20 years.

I then ask members this question. Twenty-year-olds contributing to this fund will have to pay extra taxes for 40 years only to discover that when they need the money, the fund is exhausted. The fund will run down to nothing. I cannot see how a 20-year-old can say that the fund is a good idea. I tell Dr Cullen that that is a fatal weakness in his proposal. If a person is under 30, there is nothing in the fund for him or her.

What should we do? To show how bipartisan I wish to be, I tell members that my friend the Rt Hon. Winston Peters has made some very useful suggestions on superannuation. The House knows that Mr Peters and I do not agree about a lot of things. So when we do agree about something, members ought to listen. Mr Peters points out that real security in savings comes when the money is in a person's own name, when that person owns it, and not some politician, and when that person is making the choices as to where it should be invested, and not some politician.

I say to the Government that ACT is prepared to endorse the scheme now. Rather, if it is not prepared to listen to the public of New Zealand who might want the money in their own names, in funds of their own choice, then this will be another scheme where we, as a Parliament, have failed the nation. I do not want to see that happen.

I would like to think that the Government can reach out and go for a scheme that the vast majority of New Zealanders can support. The vast majority of New Zealanders want to see their fellow citizens have a secure retirement.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Whether Spotify Can Save Itself; Plus A Playlist

Spotify has to be one of the most interestingly futile mouse-wheels of 21st century capitalism. Run, run, run goes the Spotify mouse but it never, ever makes a profit. For reasons set out below, it maybe never will. But it won’t be for wont of trying. Reportedly, Spotify’s music library contains 70 million tracks and it adds 60,000 more each day. By some estimates it adds on average, one new track every 1.4 seconds. (No wonder it's so hard to keep up with new music.) Spotify has 345 million active users, and 155 million of them have been willing to pay a subscription in order to enjoy their music ad-free. Ads are not a major driver of company revenue...

Alastair Thompson: Are There TPLF Ethiopia Insurgency Training & Support Operations in Uganda?

Mystery Document Alleges:
Covert Operation has US/Egypt Support
Operations Coordinated between South Sudan, TPLF and Uganda
Planning began December 2021...



Government: Action To Tackle Delays In Family Court
New legislation aimed at tackling delays in the family justice system, will help improve the wellbeing of thousands of children caught up in Family Court disputes every year, Justice Minister Kiri Allan says... More>>

Prime Minister: Chatham House Speech
What an honour it is to be back in London, and to be here at Chatham house. This visit represents much for me. The reopening of borders and resumption of travel after a difficult few years... More>>

Government: New Zealand Secures Major Free Trade Deal With European Union
New Zealand and the European Union have concluded negotiations on a major free trade agreement (FTA), which unlocks access to one of the world’s biggest and most lucrative markets... More>>


Economy: Financial Statements Of The Government Of New Zealand
Please note the next Financial Statements of the Government of New Zealand to be released will be for the full year ended 30 June 2022. It is anticipated that these will be released in early October 2022... More>>

Government: New Era For Better Health In Aotearoa New Zealand

The Government has today delivered a nationwide health system that will ensure better outcomes for all New Zealanders with the establishment of Te Whatu Ora - Health New Zealand... More>>

Greens: Alcohol Harm Minimisation Bill Pulled From Biscuit Tin

After years of research and advocacy, Parliament will finally consider legislation to take meaningful action on alcohol harm, says the Greens... More>>




InfoPages News Channels