Media Statement For immediate release Friday, 7 November, 2003

United Future welcomes Government super move

United Future is backing the Government's initiative to develop retirement savings for state sector employees.

"Employer-based superannuation schemes should, ideally, be available to all employees whether in the state or public sectors," Gordon Copeland, United Future spokesman on superannuation, said today.

"It's great to see the Government giving a lead in that regard. I hope that private sector employers, who have tended to veer away from superannuation funds during the last 15 years or so, will now think again about the benefits such schemes can deliver to their staff.

"Employer subsidies should provide a powerful incentive for long term superannuation savings. In essence they are akin to a gratuitous salary increase with the difference that the benefit will arise only during retirement years.

"Many retired people will tell you how grateful they are that their employer provided a superannuation subsidy during their working life. That fact, combined with compounding interest rates, can make a fantastic difference to financial security and enjoyment of life in retirement."

However the Government needs to do more, Mr Copeland said.

At the moment, super fund earnings are taxed at a flat rate of 33 cents in the dollar. This represents an over-taxation for the 76.5 percent of New Zealand taxpayer who are taxed at an average rate of just 19.5 cents in the dollar.

Ends.

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