Earlier in the year John Key sent a letter to every senior citizen in my electorate reiterating his promise to resign if the National-led government cut the rate of superannuation or raised the retirement age. It was a hollow promise. Key knows it’s a promise he will never need to keep because he will be long gone by the time the crunch comes. It will be at least 10-15 years before the real pinch starts, and about 25 years before we feel the full effects of the “baby boomer” retirement. Key’s promise is all the more hollow because he, along with Bill English and the rest of the Cabinet, have cut savings to pay for future superannuation entitlements.
Under Labour, Michael Cullen set up the New Zealand Superannuation Fund and set aside some of the money that we’ll need in the future to pay for Super. Cutting contributions to the fund was one of Bill English’s first moves as Finance Minister. It was a stupid decision. Latest Treasury figures show the fund with higher than forecast returns of the $1.3 billion for the four months to 31 October. That return would have no doubt been higher if more money had been paid into the fund. National argued the cut was necessary due to the recession, ignoring that the best time to invest is when prices are low.
National’s scaremongering over ACC has a similar hollow ring to it. John Key and Nick Smith used the lower returns from the ACC investment funds to justify huge levy hikes and cutting of entitlements. But ACC’s investment funds had returns of $600 million in the four months to 31 October, which like the NZ Super Fund were higher than expected. Week by week, the National Party’s economic track record is looking all the more superficial and lightweight.
They are cutting things that don’t need to be cut and now we’ll all have to pay.
How much will the Super Fund pay for by 2030? By 2050? Will the Super Fund rid us of the need to fund Superannuation from General Taxation? If so, I’m in – if not, then it is pointless to borrow money, only to invest it somewhere else. So how much of NZ’s forecast Superannuation will the fund pay for by 2050? 100%? 90%? 50%? Can’t be less than 30%, can it?
It is very riduculous, who knows what it will be cut by in the ‘10 budget. The report coming out on the 15th will be interesting tho.
Why dont people point out that people over 65 pay billions in tax allready as they often have other income. As the % of the population over 65 increases and lives longer the amount will increase.
It would be interesting to look at the % cost of Nat Sup to the tax paid by 65+.
And that doesnt include GST.
We could put in one side the gross and net cost of National Super and then compare to the cost of education from preschool to University.
I know which will be the highest- education, yet that isnt seen as a funding problem
“people over 65 pay billions in tax allready”…. that’s a bit of a stretch isn’t it?…. Most people over 65 retire or begin to reduce their hours of work (except maybe Brash) so the amount of tax they pay is pretty low… Also if you discount GST and the income tax paid on receiving Super then they wouldn’t be paying much… Maybe just the withholding tax on their savings…. Billions is more than a bit of a stretch…. Also investing in super can’t be seen as a liability because paying super is the liability!!! The money borrowed for it could be paid for in other ways i.e. Capital gains tax, land tax, not lowering personal tax when the govt. can’t afford it etc….
noexit , I dont have the more recent figures but when I last looked the tax paid by 65+ was in the order of 20% of the cost of the super payments. It definitely is in the billions.
People over 65 have businesses, farms , investments, may still work for wages ( the compulsory retirement age is gone).
My last comment dissapeared but it seems that about 20% or more of the super payments is covered by income tax. With GST it would be more
Can’t see why you were diverted to spam gww Trevor
Chris Please answer these questions
1. Why did Cullen make provision in the act to suspend payments if the books were in deficit?
2. Can you put your hand on your heart and say Labour (if they were still the Government) and faced with the deficits of $250m per week would 100% not have suspended payments?