Superannuation Labour's Black Hole

Labour's superannuation policy is a black hole, Finance Minister Rt Hon Sir William Birch said today.

"There is no detail, no costing, just hugely expensive words." "Dr Cullen thinks he's so clever, that by changing the name of NZ Superannuation he can solve the issue of super not just now, but for the future as well.

"But superannuation is about real payments to real people and requires real money - a very large amount of real money.

"Dr Cullen says that Labour will introduce a dedicated superannuation fund, funded from current personal income tax. Only last week, Helen Clark said that this would be funded by 8 cents in every dollar of income tax.

"8% of current personal income taxes would yield about $1.3 billion a year. This is only about a quarter of the current cost of New Zealand Superannuation, which is $5 billion. Even 8% of total tax revenue, if that's what Helen Clark means, is only around $2.7 billion.

"Unless Dr Cullen is planning to slash NZ Super, or cut other spending like health and education, he will have to raise taxes to pay for his scheme to even cover day-to-day super costs, let alone provide for the future," Sir William said.

"Either Dr Cullen can't do his sums, or he has something up his sleeve he doesn't want New Zealand voters to know. Either way, he has some explaining to do.

"New Zealanders have had enough of opposition parties promising the earth on super.

"They know it is a serious problem the nation faces as the country's population ages.

"Labour's name change policy doesn't make sense. A separate fund that pays super costs now and in the future would have to have more money going into it than current payments alone.

"That fits Labour's programme of higher taxes. Helen Clark and Dr Cullen should be honest about this."