Labour plan secures Savings and Super

Press Release – New Zealand Labour Party

Labour’s Universal KiwiSaver and Superannuation plan will guarantee Kiwis the certainty they need in planning for retirement, and will provide a pool of savings that will pay down debt and grow our economy, says Labour’s Finance spokesperson David Cunliffe.David CUNLIFFE Finance Spokesperson

Thursday 27 October, 2011 MEDIA STATEMENT

Labour plan secures Savings and Super

Labour’s Universal KiwiSaver and Superannuation plan will guarantee Kiwis the certainty they need in planning for retirement, and will provide a pool of savings that will pay down debt and grow our economy, says Labour’s Finance spokesperson David Cunliffe.

“New Zealand is at a crossroads,” David Cunliffe said. “We need to act decisively to provide New Zealanders with security in the future.

“The package announced by Labour Leader Phil Goff today will do just that.

“Labour has always taken the lead in savings and superannuation, and this plan is the most far-reaching since Norman Kirk’s super scheme of the 1970s,” David Cunliffe said.

“The Muldoon National Government undermined that scheme, and in the past three years the John Key National Government has put both the Super Fund and the future success of KiwiSaver at needless risk.

“National under John Key is incapable of making tough decisions unless they are at the expense of people who cannot argue back,” David Cunliffe said. “Labour is prepared to make tough decisions that are right for this country, and fair for all Kiwis.

“Labour’s plan will introduce compulsory KiwiSaver for all workers that protects current incentives and investment choices, but will also move the scheme gradually toward an employment-funded system as in Australia.

“Employer contributions will rise from 3 per cent in 2014 to 7 per cent by 2022. Minimum employee contributions will fall to 2 per cent with a voluntary opt-up option for those who want it.

“Universal KiwiSaver will increase the pool of savings to 17 per cent of GDP in 20 years — four times faster than under National’s tentative scheme,” David Cunliffe said.

“The pool will be invaluable in paying off private debt, and in funding the sort of investment and innovation that is needed to grow our economy, exports and jobs in a way that hasn’t happened before, but must happen now.”

David Cunliffe said Labour will also increase the age of eligibility for Super from 65 to 67 over a 22-year period, and restart contributions to the New Zealand Super Fund from 2012.

“The slow and gradual raising of the age will not affect anyone currently over 55. The current entitlement rate of 66 per cent of the average wage will be guaranteed.

“Those not readily able to work for longer will qualify for a transitional Super payment equal to NZ Super until they reach 67. We are determined to protect the vulnerable,” David Cunliffe said.

“NZ Super prefunding will resume in $750 million per annum increments up to the legislated level, around $2.4 billion, by 2015/16.

“Taken together these changes provide the decisive intervention the country needs so that we can all own our own future. Without them NZ Super costs would double from 4 per cent to 8 per cent of GDP by 2050. These changes limit that to 5 per cent.

“National’s short-term approach to grow the economy is to sell our precious state-owned assets overseas,” David Cunliffe said. “Labour’s plan will allow us to keep our assets, and will provide a substantial pool of funding that will make us the envy of much of the world.

“Labour’s plan is far-sighted. It is fair to everyone. It is enduring. It guarantees our future.” ENDS

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