Thursday, 16 September 2004

United Future on Harris superannuation report

United Future superannuation spokesperson Gordon Copeland welcomes the Harris Report’s recommendation on workplace superannuation but with some reservations.

“Since the saving pattern of Kiwis is poor and we are a highly indebted nation – through the private sector – any and all proposals aimed at increasing the savings of New Zealanders should be strongly encouraged.

“I like the idea of workplace-based savings schemes and the simplicity of the Harris Report proposals are a virtue.

“However, it remains to be seen whether employees will actually begin to save and whether those savings will be accumulated towards retirement provision rather than spent prior to the retirement years.

“The goal is to save specifically for retirement, but to ensure that happens the Government needs to ditch the current 33 cent tax rate which applies to income earned on super savings. That overtaxes the 75% of New Zealanders whose tax rate is 19.5 cents or less; an obvious disincentive.

“In addition, my own view is that capital gains earned through super schemes should be tax-free, so that we create a level playing field with that other great love of Kiwi savers, residential property investment.

“In my view these two important tax changes could make the difference between the success and failure of the proposal.”

ENDS

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