29 May 2009 Media Statement
National’s decade of deferrals creates $35B Super hole

National’s decision for a decade of deferrals to the “Cullen” Super Fund will leave a super-sized hole in the New Zealand Superannuation Fund when it comes time for entitlements to be paid from it, Labour Leader Phil Goff says.

“Closer analysis of Treasury’s figures by Labour has revealed that in 2031, when withdrawals from the fund commence, the fund will be short by $35 billion dollars,” Phil Goff says.

“It shows that on top of the shortfall of $19.5 billion of contributions to the fund, earnings and interest of around $15 billion will also be lost.

“This decision has effectively killed the Fund which many New Zealanders are relying on for their retirement.

“There was a political consensus around Superannuation in order to provide New Zealanders with certainty so that they could plan for retirement. This has now been broken.

“By the time the baby-boomer generation retires, 1 in 5 New Zealanders will be reliant on Superannuation.

“The ‘Cullen’ Fund was to prefund that cost so that Super would remain affordable. National’s decision means this will no longer be the case.

“This will put future Superannuation entitlements at current levels in jeopardy and may mean the people who have paid taxes towards Super will no longer get what they paid for.

“Just who do John Key and Bill English think is going to plug that $35 billion hole in 20 years time?

“Instead of addressing the problem now, John Key and Bill English are transferring the problem to the future. But every year it will get increasingly harder for future governments to make up the shortfall.

“That is the legacy of Bill English’s Budget,” Phil Goff said.

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ENDS

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