OPTIONS FOR THE FUTURE

  • Jenny Shipley
State Owned Enterprises

"A commitment to reaching accord on superannuation will provide an important step towards building a bright future for New Zealand," State Services Minister Jenny Shipley said today.

"Threatening or frightening people has no place in such a debate."

In a speech to the Wellington Chamber of Commerce Jenny Shipley said the post-referendum period will be an important time for the Coalition Government to regain New Zealanders' confidence.

"The Coalition Government has been making progress in many areas, but it is true that the public perception of that has been clouded by political distractions. We need to demonstrate more clearly that the Coalition Government is committed to an inclusive society based on a healthy economy and continued stable and progressive political leadership by all Ministers and MPs.

"To do that, we need to sharpen the focus on the Government's economic programme. We also need to inspire New Zealanders to discuss how individuals contribute to our society, and talk about their relationships, expectations and obligations.

"An important part of the equation is the impact on our economy of future superannuation arrangements.

"If there is a NO vote in the referendum, then the country needs to debate how we meet future needs in a socially and economically responsible way through next century.

"In fact there are only three ways to fund future superannuation:

to privatise the risk, as proposed under the compulsory retirement savings scheme
to blend private savings and public input, as recommended by the Todd Taskforce
or to use full public funding, paid for through increased taxes.
While current superannuation arrangements are satisfactory in the medium term as the population ages, I favour the middle option of a blend of public and private provision. There are many interesting options for achieving this. These include Labour's option, of starting to build up a Government-run superannuation fund, which is in effect a collective means test, or the option of re-introducing an income test on individuals. We must also consider the possibility of raising the age of eligibility for people aged 45 and under. Some MPs are interested in investigating the possibility of returning to the pre-1972 scheme, with a universal pension for everyone at a lower level than today, with an income-tested top-up available to those in need.

"As part of an accord process, we need to put the details and costs of all those options before the public, possibly in an options paper, and then have an informed debate, so that people can consider the benefits and risks of all options.

"I believe it is within the wit and ability of politicians to be able to involve themselves and others as they consider this important question.

"There is no need for this issue to be rushed. The Periodic Review Group chaired by Jeff Todd made it clear there is no crisis, and that some sensible options are available for the future.

Regardless of whether we have a compulsory scheme or the current New Zealand superannuation, arrangements for retirement income will always be subject to some change as economic and social trends vary, as has been the case in the past.

"Having said that, the current New Zealand Superannuation scheme offers us our best chance to be fair to all New Zealanders in economic and social terms.

"The Coalition Government, as a team, must work to regain New Zealanders' confidence politically, so we can enjoy the benefits of our success socially and economically and go on to build a bright future," Mrs Shipley concluded.