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SUPERANNUATION
INTRODUCTION:
New Zealand First is determined to deliver a long-term, sustainable superannuation scheme, secure from political tampering. The principles upon which such a scheme will be devised will be fairness, sustainability, that it delivers a secure and dignified living standard, and that it is within the national interest.
The abolition of the surtax was always one of New Zealand First's core policies. We delivered on our promise. We budgeted for and prepared legislation to remove income and asset testing for long-stay geriatric hospital care from 1 October 1998.
We supported the establishment of the New Zealand Superannuation Fund, not because it provides the ultimate solution, but because it was a step in the right direction. Fifty years ago, 9% of New Zealand's population was 'elderly'. In fifty years time 26% of the population will be over 65. Half a million New Zealanders currently receive some form of retirement income, in thirty years time that number will have more than doubled.
The challenge now is to maintain immediate certainty whilst planning for longer term security. An additional contributory scheme in individual accounts is part of this strategy.
PLANS
New Zealand First will:
- ensure the needs of retired New Zealanders are met through a sustainable superannuation scheme. In giving people certainty (and thus security) such a scheme also gives New Zealand an expanded savings base;
- support the development of KiwiSaver and introduce further programmes which promote a savings culture throughout the community;
- continue to incrementally raise the level of New Zealand Superannuation to 68% of the net average wage in the first instance (calculated on married couples with a similar adjustment of rates for single persons), rising to 72.5% over time;
- cement in place the age of entitlement at 65 years;
- ensure that purchasing power remains constant;
- facilitate the transition from the pay-as-we-go scheme through the cost smoothing mechanisms of the newly established fund to a new save-as-we-go scheme, with the ultimate aim of achieving individualised accounts;
- amend the legislation relating to the Superannuation Fund to tag individual entitlements, guaranteed by the State, and to make them untouchable by future generations of politicians;
- work towards a formula for those receiving overseas pensions, based on a pro rata, 1/45 year entitlement for years worked in overseas jurisdictions and New Zealand, while ensuring that anybody who qualifies for New Zealand superannuation receives no less than the base New Zealand rate;
- direct the guardians of the New Zealand Superannuation Fund to prioritise the purchasing of shares in New Zealand infrastructure companies, particularly when they are being sold by overseas investors, with the aim of building a solid base of New Zealand ownership of these assets. This shall be conducted at arms length, with no ministerial interference, and at the discretion of the guardians so as not to distort the market;
- require the New Zealand Superannuation Fund managers to invest in New Zealand infrastructure and growth industries including making funds available at competitive interest rates to the New Zealand Transport Agency, ONTRACK, KiwiRail and local government for capital projects;
- provide that (on a pro rata basis) receipts of superannuation at death will form part of the deceased estate - there will be no requirement to make repayments;
- add to the dedicated fund through tax-incentivised personal savings in the name of the saver and thus ensure that the national interest for enhanced domestic savings is maximised;
- require that the contributory scheme must contain portability provisions over time and between jobs, and that it must be able to be drawn upon if the recipient is outside of New Zealand;
- pass legislation which ensures that any modifications to the scheme can only be made with a 75% majority in the House of Representatives;
- ensure that any new scheme would not affect any person who at the time of introduction was aged 55 years or older and thus maintain certainty for that group currently closest to retirement; and,
- investigate the costs and benefits of a trade-off between tax cuts and the implementation of compulsory superannuation.
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