18 June 2001

Individual super accounts a backward step - Greens

The Green Party says any move towards individualised super accounts would undermine the fair and egalitarian superannuation scheme which Labour and the Alliance claim to stand by.

The Government announced today that they had reached an agreement with Winston Peters which would allow future governments to convert the scheme to individualised accounts.

"I am really disappointed that Dr Cullen is prepared to accommodate Mr Peters' fixation, when any move to split the fund into individual accounts undermines the very heart of our superannuation system," said Green Party co-leader Rod Donald.

"Individualised accounts are deceitful, expensive and discriminatory."

Mr Donald said individual accounts are not only much more expensive to administer, they also deceive taxpayers into thinking that they own the money in their account, when in fact it has come out of the general tax pool.

"In the final analysis, the only practical reason for having individual accounts is so the Government can pay differing amounts to individuals in different circumstances.

"Many people, whether because they are full-time parents, or because they are paid less as a female or unskilled worker, or because they work fewer hours in their lives due to poor health or unemployment, will contribute less during their lives as a taxpayer.

"An individualised super scheme would punish these people for what is no fault of their own, and would reintroduce high levels of poverty for older people."

Analysis of the Peters Retirement Savings Scheme in 1997 showed that under his proposal, only 10-15 percent of women (and one percent of Maori women) would save enough to be assured of a pension at the current level. 92 percent of the public rejected Peters' scheme in 1997.

"Labour and the Alliance are setting the whole superannuation scheme up for a huge fall by agreeing to make it easier to individualise the fund," said Mr Donald. "Trading off future universality for this year's political support for the fund is too big a price to pay."

ENDS

© Scoop Media