MINISTER WARNS AGAINST MISCHIEF-MAKING ON SUPERANNUATION

  • Jenny Shipley
State Owned Enterprises

"Suggestions that tax cuts may not proceed if there is a "no" vote, but are available if there is a "yes" vote to fund the contributions towards compulsory saving is nothing short of political mischief-making", State Services Minister Jenny Shipley said this evening.

Mrs Shipley gave a speech on superannuation at a Banks Peninsula electorate meeting in Christchurch tonight.

"If fiscally sustainable tax cuts are available as claimed to fund contributions to compulsory superannuation, they are also available to repay New Zealanders for their efforts in turning the New Zealand economy around. New Zealanders are entitled to a tax cut on 1 July 1998, as is already guaranteed in law, and consideration of further tax cuts beyond then if they are fiscally and economically sustainable.

"If further tax cuts are not fiscally sustainable then the Government will not be able to deliver them to fund the compulsory superannuation savings scheme either, which brings into serious doubt the viability of the proposed scheme.

"This highlights the debate on who is best positioned to make decisions about how New Zealanders should use the money they have earned themselves. New Zealanders don't need the Government forcing them to save in a particular way.

"For all these reasons I continue to oppose the compulsory scheme.

"It is bad for women and low income people. In fact the white paper clearly states that 1,243,218 New Zealanders will have less disposable income after contributing to the compulsory Retirement Savings Scheme. This is in fact a tax increase. Compulsion is regressive, creating the greatest impact on those least able to manage.

"Secondly, it limits freedom to invest in business, and will cost jobs. Thirdly, it will be inexcusably costly to administer.

"New Zealanders should consider all the arguments for and against compulsory saving and be very wary of those who make claims which are clearly designed to confuse people," Mrs Shipley concluded.