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Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill

Second Reading

Wednesday 21 October 2009 (advance copy) Hansard source (external site)

CarterHon JOHN CARTER (Minister of Civil Defence) Link to this

I move, That the Social Assistance (Payment of New Zealand Superannuation and Veteran's Pension Overseas) Amendment Bill be now read a second time. The National Government is committed to ensuring that older New Zealanders have more freedom in their retirement, and I understand that this bill is supported right across the House. The purpose of the bill is to make amendments to the New Zealand Superannuation and Retirement Income Act 2001 and the War Pensions Act 1954 to make it easier for superannuitants and veterans pensioners to live or travel overseas.

At the moment there are a variety of ways in which New Zealand superannuation and the veterans pension can be paid overseas, depending on where a superannuitant or a veterans pensioner intends to go, for how long, and for what purpose. Superannuitants and veterans pensioners leaving New Zealand temporarily can receive full payment for up to 26 weeks and are not affected by the amendments in the bill.

There are currently three methods for paying superannuitants and veterans pensioners who wish to leave New Zealand to reside in another country. First, there is a provision for payment under the reciprocal social security agreements with other countries. These allow superannuitants and veterans pensioners to receive up to the full rate of payment, depending on how long they have resided in New Zealand. We have agreements with Australia, Canada, Greece, the Netherlands, Jersey, Guernsey, Denmark, Ireland, and the United Kingdom. Second, there are special provisions for people heading off to live in most Pacific countries that also allow them to receive up to the full rate of payment, depending on how long they too have lived in New Zealand.

Finally, there are provisions for people moving to all other countries. These are known as the general portability provisions. Superannuitants and veterans pensioners who leave New Zealand to live in one of these countries are currently paid a flat rate of 50 percent of the gross rate of the pension that would be payable in New Zealand, except that there is no additional payment for a non-qualified spouse or partner, or a living alone payment. The amendments in the bill relate solely to the general portability provisions and will not affect New Zealand’s social security agreements or the special provisions for Pacific countries.

This bill is necessary because the general portability provisions are preventing many of our superannuitants and veterans pensioners from moving to a country of their choice or travelling overseas. Two main issues will be addressed by this bill. The flat rate of 50 percent provides insufficient income to allow a reasonable standard of living in many countries. Therefore, it is unrealistic for many pensioners to consider retiring to another country. The general portability provisions restrict the ability of superannuitants and veterans pensioners to reside in one country and then move to another country to live, because payment overseas is linked to residence in one particular country. This also means that superannuitants and veterans pensioners who want to head off on the OE of their golden years cannot continue to receive payment.

Consequently, the bill will make two changes—

RobertsonGrant Robertson Link to this

When’s the member going to go?

HipkinsChris Hipkins Link to this

His retirement OE.

CarterHon JOHN CARTER Link to this

Of course, it affects the likes of myself, and I might say that it will not be long before it will affect the members opposite who interject. The key change is a new payment rate. Instead of the current flat 50 percent of the domestic rate, the superannuitant or veterans pensioner will be able to receive up to the full rate of New Zealand superannuation or veterans pension, depending on how long he or she lived in New Zealand between the ages of 20 and 65. There continues to be no entitlement to any additional payment for a non-qualified spouse or partner, or to a living alone payment.

The second change is that the bill will free up the rules restricting the ability of superannuitants and veterans pensioners to move around once they get overseas. The bill will allow payment of New Zealand superannuation and veterans pensions to superannuitants and veterans pensioners who want to live in more than one country with which New Zealand has no social security agreement, whether they remain in the country they first move to reside in, or move to reside in another country. In addition, the bill also allows for the payment of superannuation and veterans pensions to those who leave New Zealand to travel in or between any countries for more than 26 weeks, but to not live outside New Zealand.

The new provisions represent a modernisation of the payment overseas policy that has been in place since 1990. The rate was originally set at 50 percent, partly because the superannuation surcharge was not applied to payment overseas. Now the surcharge has gone and, therefore, it has no relevance to the amount of pension we pay overseas. Forcing older people to remain in one country or preventing their ability to travel serves no particular purpose, and it is not in tune with what today’s retirees want to do. It is not the philosophy of this National Government to do so, either. Actually, I doubt whether it is the philosophy of this Parliament.

The bill had its first reading on 31 May 2009. It was then referred to the Social Services Committee, which reported back to the House on 18 September 2009. The select committee received 99 written submissions on the bill, with the majority in support of it. The committee received many submissions that did not primarily address the subject matter of the bill, but focused on the direct deduction policy set out in section 70 of the Social Security Act 1964. That policy is not within the scope of the bill.

HipkinsChris Hipkins Link to this

The audience is giving up.

CarterHon JOHN CARTER Link to this

Well, it will affect them in due course; it will be a little time before they take a direct interest in it, nevertheless.

The select committee has made some technical changes and one substantive change. This amendment will ensure that if someone is out of the country for a while but is still counted as being present for the purposes of fulfilling the residential qualifications for superannuation, then he or she will be counted as residing in New Zealand for the purpose of the proportional payment formula. Examples of this would include those who are outside New Zealand for special medical treatment or medical training, those who are serving on a New Zealand - registered ship or serving in the armed forces, those who are undertaking Volunteer Service Abroad work or missionary work, and those who are employed in New Zealand embassies overseas.

Some submitters asked that people be allowed to apply for New Zealand superannuation while residing overseas. The select committee noted that allowing applications from overseas would change the parameters and costs of the bill’s proposal significantly. Therefore, it recommended no change in this regard.

The select committee noted—and this is quite an important point—that the Income Tax Act 2007 does not differentiate between the tax treatment of people living overseas and people who are travelling. As a result, payments made to overseas residents and those who are travelling would be exempt from New Zealand tax under the general portability provisions in the bill. However, although overseas residents are subject to taxation in their country of residence, Kiwis travelling overseas would not be subject to any tax liability. For this reason the committee considered that the Income Tax Act 2007 should be amended in order to remove the tax exemption for people who are travelling. Such an amendment would require a substantive amendment to the Income Tax Act 2007, which has not been amended substantially by this bill as originally introduced. The committee was, therefore, prevented by Standing Order 299 from recommending such an amendment without the leave of the House. It instead suggested that the Government give consideration to this issue in depth if a review of the relevant legislation is undertaken.

I agree with the committee’s view that the New Zealand superannuation and veterans pension paid to travellers should not be exempt from income tax. The Government will, therefore, be seeking to make amendments to the Income Tax Act 2007 to ensure that New Zealand superannuation and veterans pensions paid to travellers is subject to income tax in the same way that those payments are taxed while they reside in New Zealand.

Another theme raised by submitters was the concern that current recipients of New Zealand superannuation and veterans pensions paid overseas under the general portability provisions would be disadvantaged by the proposed savings provisions. I can assure the House that no superannuitants or veterans pensioners will receive less under the proposals in the bill than they are receiving currently. In fact, many will receive more.

The introduction of the bill to this House is very timely. Our society is becoming increasingly diverse, and Kiwis are travelling and living in other countries more often. It should also be noted that the attitude towards older people in this country is changing and needs to continue to change, because the contribution of us baby boomers will be far greater than has previously been anticipated.

In conclusion, I reiterate that this bill is part of the Government’s commitment to ensuring that older New Zealanders are free to decide how they spend their retirement. I commend this bill to the House.

KingHon ANNETTE KING (Deputy Leader—Labour) Link to this

I commend the Minister for Senior Citizens, John Carter, for reading that speech so beautifully. It came straight from the Social Services Committee’s report back to this House, but I think it is important that we get that on the record of the House, so I thank the Minister for that.

There does not need to be an extended debate on this bill. The reason is that the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill was a Labour bill, introduced to this House in September 2008 by the Hon Ruth Dyson. The only thing that has changed in respect of this bill, with the change of Government, is the name of the Minister on the cover of the bill. It is one of those moments when we can say that there is general agreement across this Parliament on the changes that have been made to this bill. I commend the Minister for not trying to put a lot of flannel around his speech and take credit for a bill that started under one Government and will be finished under another. Unfortunately, the speech from the Minister for Social Development and Employment, when she last spoke on the bill, was all about the wonderful achievements of National in this respect. I found that to be just a little dishonest, in that this bill was started under Labour, as I said, and will be finished by National.

Is it not good that in this Parliament we have agreement on a bill that will benefit those who are retiring? You know, I look at Mr Carter, and he is obviously looking into the horizon—many years ahead—and thinking that maybe one day he would like to take his pension and head off to the Caribbean or wherever he wishes to go. For many people this is an important bill and an important change that is being made. We agree on this bill, and, hopefully, we will stick to the key issues. I think the key issues have been set out pretty clearly by the Minister.

Those issues go to the fact that under the legislation that has been in place since 1990 there was the provision of a flat rate of 50 percent of the domestic rate of the pension, where a person left New Zealand with the intention to reside in a country with which New Zealand had no agreement relating to the reciprocity of social security monetary benefits. That was the formula that was used. That flat rate led older New Zealanders to defer retiring overseas, because obviously that would be insufficient income to allow them a reasonable standard of living in retirement in another country. The payment is also currently linked to residents in one particular overseas country, which means that superannuitants or veterans pensioners cannot travel to or between multiple countries and continue to receive their pension.

From the passage of this bill, which I assume will be around November this year, qualifying superannuitants and veterans pensioners who wish to travel between any overseas country and retain their entitlements will be allowed to do so. As the Minister set out, this bill allows people to make decisions about where they wish to reside. We can look at the formula and see that it is very fair. The formula that is being put in place is not the 50 percent flat rate any more; people will receive New Zealand superannuation or a veterans pension overseas, based on a formula of 1/540th of the full rate of each month of residence in New Zealand, between the ages of 20 and 65. It might sound rather complicated, but it is able to be worked out relatively easily. People will know what they are then able to take if they retire in another country.

Submissions were made to the select committee that we did not consider, because they really were outside the scope of the bill. Some submitted that when they arrived in New Zealand and became a citizen of New Zealand, they should be able to receive the full pension as soon as they retired. That was, as I said, outside the scope of the bill. There are issues around fairness when it comes to people who have paid for superannuation through their taxes over many, many years, and would receive a particular formula if they went overseas, and then a person who arrived in New Zealand and had been here only a short time would retire and get the full pension, having the same rights. That was not something that the select committee dwelled on.

The bill was sent to the Social Services Committee on 31 March this year. It received 99 submissions, and we heard 13 of them. We did not hear more, because many of the submissions did not relate to the bill itself, at all. They raised an issue in respect of section 70 of the Social Security Act 1964, and that relates to the direct deduction of an overseas pension from New Zealand superannuation. This has been a longstanding issue, and I see the Minister John Carter nodding: he has no doubt had representation, particularly from people of Dutch descent who have come to New Zealand with a Dutch pension and wanted to retain that pension alongside their New Zealand superannuation. We as a Government saw that as unfinished business, and in fact the previous Minister for Social Development and Employment, Ruth Dyson, had done a considerable amount of work on that. I think the challenge now for the new Government is to look at that issue and to proceed with it. It will not go away, because many New Zealanders feel that this is unfairness and a disincentive. When they have saved in another country in a private pension scheme, for example, or in a pension scheme that they could have in New Zealand, it is a disincentive and they are not able to have it, or that they can have it but it affects their New Zealand superannuation. I say to the Minister and his colleagues that the challenge is to look at that issue.

We made very few changes to the bill itself, and I think the Minister has set out pretty clearly what they are. In fact, one of the changes we made was, as he said, for people who are outside New Zealand for special purposes—those who have gone to get medical treatment, are serving on a New Zealand - registered ship, are in the armed forces, are working for Volunteer Service Abroad or doing missionary work, or, perhaps, are employed in embassies overseas—their time outside New Zealand would be counted as residence for the purpose of the formula that I have just set out.

Some people are engaged in charity work overseas but are not part of Volunteer Service Abroad; there may be some other organisations that are not covered here. We did not put them in the legislation, but we said that, should the opportunity arise, it would be valuable for the Government to consider this issue further in the future. That was one of the changes that we made.

One submission that I think was pretty important was from the New Zealand Returned and Services’ Association around the veterans pension. I know that there is a lot of concern by veterans that they have been counted with New Zealand superannuation in terms of this formula and in terms of the portability of their pension overseas. The case they put to the select committee is that they receive a veterans pension based not on their age but on the disability they received in their service for New Zealand. They may receive their veterans pension at 45, not 65, and, in their view, if they wish to travel and live overseas in another country, they ought to be able to take their veterans pension with them, and it should not be linked to New Zealand superannuation, but based on the fact that they are entitled to it because of their disability.

We could not address that issue at select committee, but I believe it needs to be addressed, and I know that the previous Minister of Veterans’ Affairs, Rick Barker, has been responsible for the rewrite of the Veterans’ Affairs Act. He first of all started the work with the Law Commission, which hopefully will lead to a rewrite of the Act itself, and I hope that this issue is addressed in relation to that. The Returned and Services’ Association, obviously a very significant group, made a very compelling case, but we could not address it at the select committee itself. A number of other issues were raised, and I think that they were really unable to be addressed by the committee, either because it was an income tax issue, or it was an issue that would have made the bill unfair for other New Zealanders. We looked very carefully at the non-qualifying spouse—how he or she could be included—but we did not want to make this bill unfair for other New Zealanders. I commend this bill to the House.

WoodhouseMICHAEL WOODHOUSE (National) Link to this

I am pleased to rise in support of the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill. As the previous speaker, Annette King, said, this bill will have support across the House. Although she started by saying she did not want to get political, she had a crack at the Minister for Social Development and Employment for taking more credit for the bill than she should. But putting that aside, I think we need to acknowledge the previous Minister—

RobertsonGrant Robertson Link to this

You agree, then. Do you agree that she did?

WoodhouseMICHAEL WOODHOUSE Link to this

I will get to that. We should acknowledge the previous Minister, Ruth Dyson, for her work, but the bill, having been introduced, languished for several months. I think the fact that this bill has been brought before the House for its second reading, in amongst the plethora of legislation that this hard-working Government is putting through, is a testament to the very hard-working Minister for Senior Citizens and the high priority that this Government places on that very important section of our community.

I was not a member of the Social Services Committee, but I thank those members for their work, and I also thank the officials for their work on what is such sensible legislation. It also, I think, reflects the fact that our society is changing. We are much more mobile, we are fluid, and thanks to the baby boomers we are increasingly getting older on average, but we are fitter and more mobile.

As some members know, my mother passed away about 3 weeks ago, and I take this opportunity to thank members of the House for their messages of condolence through that time. In the last few years of her life she was very active, and she travelled. Had my father still been alive, I am quite sure they would have taken advantage of the opportunity to spend quite some time away in the countries they discovered in their later years. Their friends are still doing that. I expect that this legislation will come as a real boost to them in being able to travel more fluidly through other countries, whereas previously they were not able to, and also to earn a more generous rate of superannuation, up from the current flat rate of 50 percent. So I congratulate both the previous and present Ministers and the select committee, and I commend the bill to the House.

DouglasHon Sir ROGER DOUGLAS (ACT) Link to this

Although I could support the principles that lie behind the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill, one can describe the bill as having a number of faulty details. In fact, I would go so far as to say I have grave doubts about the fairness and equity of this bill and the way it treats different New Zealanders.

It treats different New Zealanders in a number of ways. The bill creates a number of secondary effects that have not been taken into account, and, in large part, aspects of the bill have been driven by the Ministry of Foreign Affairs and Trade as a de facto form of foreign aid. That, I think, is to be regretted.

Maybe I can illustrate the point that I want to make with a graph. Members may not be able to see it, but there are three different areas—

HipkinsChris Hipkins Link to this

Well, we can’t see it if you don’t hold it up.

DouglasHon Sir ROGER DOUGLAS Link to this

I will hold it up in a moment when I get to the point I am illustrating.

Firstly, there are New Zealanders who wish to retire to places with which we already have an international agreement. Up to today, this group of people theoretically have actually been advantaged. This bill does nothing for that group. They remain where they are. In fact, many New Zealanders who go to Australia, for example—because that is where their children have gone to live and work—having worked here for 47 years, might find themselves in the position of actually getting zero, because they have to comply with the Australian rules, and the Australian rules mean that they are means-tested.

This graph plots the number of years worked against the percentage of New Zealand superannuation one would receive. If I look at the graph, I see that if I go to Australia or any of the countries that we currently have an agreement with, I could get zero, or I could be anywhere between zero and this red line, which represents superannuation in non-Pacific countries. If I go to any other country, apart from the 22 Pacific Island countries, I will be on the red line. On the other hand, if I go to live in one of the 22 Pacific Island countries—it does not matter whether I am a Pacific Islander; I could be an American who has been here for 10 or 20 years—I will be on the blue line, which beyond the 10-year mark is higher than the red line. The gap between the red line and the blue line is the advantage—the extra I would get. So if I am an American who has come here to live for 10 or 20 years, as long as I say that I will retire in one of the Pacific Islands, I can go on to that top line of the graph.

I will tell members about one of the unintended consequences of the bill. Pacific Island people who can come to New Zealand for 10 or 20 years would be absolutely mad not to do just that. The return for the 10 or 20 years is huge. One of the unintended consequences of this bill is that we are saying to Pacific Island people that in their best working years they should come to New Zealand. It will get Pacific Island people and others to come here for 10 or 20 years in order to get the benefits of this pension. In their best working years they will not be contributing in the Islands; they will be contributing elsewhere. To me that is preferential treatment.

The fact is that it was driven, as I understand it, by the Ministry of Foreign Affairs and Trade as a de facto form of foreign aid. It seems odd to use a policy instrument as blunt as superannuation as a mechanism to deliver aid to the Pacific Islands. Cash handouts to particular demographic groups of society could hardly be considered to be an effective aid programme. It may be that that is what we intend to do. It may be that we are happy for someone to come from a foreign country, let us say America, spend 10 or 20 years here and then be able to retire on, in some cases, a 100 percent pension, provided the place of residence is in one of the 22 Pacific Islands. It seems to me to be odd that New Zealanders who have lived here for 65 years, worked for 47 of those years, and gone to live in Australia get nothing because they have an income beyond $39,000, but others who come here and spend as little as 10 years here can get 50 percent of the pension.

I do not think this bill has been carefully thought out. It will create anomalies. More particularly, I believe it will have some secondary effects that will not be helpful to the Pacific Islands. I know the intention was that it would be helpful, so that Pacific Islanders in particular could return, so that the Islands would benefit. But the fact is that this bill will say to people that if they come here for 10 years, they will get a substantial pension, and that if they stay for 20 years, they will get an even bigger pension. We are saying to Pacific Islanders that if they come here, they will get a pension of 5 percent per year, provided they do the minimum 10 years. As for New Zealanders, they can work for 47 or 45 years and get 2.25 percent per year, but if they go to Australia or one of those countries that we have an arrangement with, it may well be that they get nothing. Personally, I do not think there is much fairness in that.

DysonHon RUTH DYSON (Labour—Port Hills) Link to this

That was an extraordinary speech from the Hon Sir Roger Douglas, who criticised both the Government and the Labour Party, and described the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill as being preferential and as some sort of back-door deal to allow people from Pacific countries to come to New Zealand in order to get a pension. That speech came from a member of Parliament who not only earns $100,000-plus in his job—and I am sure he earns that money—but also is one of the few members of this House who are still entitled to receive the gold-plated parliamentary superannuation scheme as well as his national superannuation entitlement. He comes to this House to criticise what is quite a small amendment, but one that will allow people who have earned their entitlement to New Zealand superannuation to then retire in countries of their choice, without being disadvantaged. I think the country will be gobsmacked by the cheek of that speech.

DouglasHon Sir Roger Douglas Link to this

I raise a point of order, Mr Speaker. I do not really want to interrupt the member, but she should not make the sorts of accusations that she is making. In fact, since I came back into Parliament I have no longer drawn parliamentary superannuation. I think the member knows that, but for her to say that is incorrect.

BarkerThe ASSISTANT SPEAKER (Hon Rick Barker) Link to this

That is not strictly a point of order.

DysonHon RUTH DYSON Link to this

The Minister John Carter, who spoke earlier in the debate, talked about his support and National’s support for this legislation, and about how he was looking forward to his retirement time and to being able, perhaps, to take advantage of this amendment to the superannuation legislation, as we all will be able to do when we retire. The Hon John Carter, who will be entitled to receive New Zealand superannuation in just under 6 years’ time, may well have spoken with confidence about that, but I personally do not share that confidence. The reason why I do not share that confidence is that even though in this particular instance the Government is supporting legislation that will benefit hard-working New Zealanders who have earned superannuation, it has also, in this very same year, gutted the fund that gives New Zealanders confidence in their future entitlement to New Zealand superannuation at all.

This Government has committed New Zealand to a decade of deferred payment to the New Zealand Superannuation Fund. That fund gave all of us who were in our 30s, 40s, or 50s confidence that we could look forward to a retirement age of 65 and know that we would be able to receive superannuation at its current level. The gutting of that fund means that New Zealanders like the Hon John Carter, when he retires at the age of 65 on 8 May 2015, will no longer be able to have the confidence that he will receive that superannuation.

Not only was that a very bad move for superannuitants but also it was very bad in terms of basic financial management. I am not sure how the Hon Bill English managed to convince the entire National caucus to support the gutting of the scheme. When Treasury did its analysis, it said that by 2031, when the withdrawals from the Superannuation Fund will be completed, the fund will be short by $35 billion. That is how much money Bill English has taken out of the fund, and that is how much money we will be short of when we try to ensure that superannuitants in the future will be able to receive superannuation at the current level. Treasury also said—again, I say this is Treasury information—that Bill English’s plan gutted the Superannuation Fund by 50 percent, and that we will never be able to catch up that money. If we have the decade of deferrals of payments into the New Zealand Superannuation Fund, we will never catch up.

I am not even sure whether National wants to catch up on those payments. John Key has said publicly to the media that as soon as New Zealand is in surplus again the Government will start to contribute to the Superannuation Fund, but, at the very same time his deputy, Bill English, said on the public record that there would have to be trade-offs in the future, if we were to return to investing in our future superannuation, which is what the Superannuation Fund is about. He said there would have to be trade-offs between a resumption of contributions to the Superannuation Fund, tax cuts, and spending. We all know where Bill English’s choice lies. He has always gone for tax cuts now, particularly for those who are very high-income earners, at the expense of investing in future superannuation payments. People who are now in their 40s and 50s, and even in their early 60s, hard-working New Zealanders who are paying their taxes and paying their way in our society, have not received a tax cut from Bill English or the National Government, because the tax cuts programme went as soon as the Government could get away with it. All the tax cuts went to the highest-income earners. Now people know that they will not have the confidence to look forward, at 65 years of age, to receiving superannuation in the future.

Although the National members come to this House and say they support this bill, which was introduced under the previous Labour Government, those words have very little meaning to people who know that New Zealanders might be able to retire overseas and be better off under this legislation, but that we will not actually receive superannuation at the level that it is currently paid at. So this Government gives with one hand and takes away much more with the other.

That is not the only area where National has taken something away from older people. Day after day we have heard concerns being raised by my colleague Maryan Street, and a total denial from the Minister for Tertiary Education, Anne Tolley, about the damage that is being done in our communities by the 80 percent gutting of the Adult and Community Education fund. A lot of older New Zealanders will be very badly affected by that. People who are at home on their own, who have worked hard all their lives, and who get to 65, now have some time. They might be able to learn something they have always wanted to learn. They might be very lonely, so they might want to go to a night class or a class during the day to develop some friendships. Or they might just want to get out of their house. Anne Tolley said they can just pay for adult and community education themselves. Unfortunately, our schools throughout the country and our community centres, which have been running these night classes and other classes during the day, have said they cannot afford to run them any more, because Anne Tolley has gutted the fund that has made those services available to thousands and thousands of, particularly, older New Zealanders for many years. Again, I say the Government is supporting this legislation but taking away the opportunity for older New Zealanders to go to night classes.

The Minister for ACC, who, I hope, will be in the House later on this afternoon to try to explain yet again his position on accident compensation, has made one of the most savage cuts to older people that any of us can imagine. It is to take away the funding for a programme that is not only good but also highly regarded internationally, a programme that has been well researched and proven to be successful. That is the falls prevention programme. Up and down the country older people have been learning how to strengthen their muscles and how to have better balance, so that they can reduce the risk of falling, injuring themselves, breaking hips, and putting huge costs on to not just our health system but also themselves and their families personally. That programme is designed specifically to help older people to reduce the risk of falling and being injured. It has been gutted; it is gone. There is no more money. Once again, I say that although the National Government says it supports this legislation, introduced by a Labour-led Government, it is taking away yet another thing from older people.

Of course we have also heard, particularly from my Canterbury colleagues Jim Anderton, Lianne Dalziel, Clayton Cosgrove, and Brendon Burns, about the savage cuts in home support for older people. For many people a couple of hours of home support, at very low rates of pay and at very low cost to the taxpayer, is the difference between that person being able to stay safely and well in his or her own home, and having to move into a rest home. It provides people with a genuine choice about where they want to live, and it provides them with the opportunity to stay in their home, often right up until the time that they die. Now we are seeing further cuts in the health system and front-line services being cut for some of the most vulnerable people in our community: older New Zealanders, who have worked hard and contributed by raising their families or by being in a paid job. They are people who deserve to be respected and valued, rather than to be at the cutting edge of health cuts.

I support this bill and urge its progress.

BradfordSUE BRADFORD (Green) Link to this

The Green Party will continue to support the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill through all stages in the House today. We agree with the previous Labour Government, which introduced this legislation in the first place, and with National, which followed through with it, that people on superannuation and the veterans pension should be able to continue to receive their entitlements while travelling or living overseas, even in countries with which we have no reciprocal social security arrangements. Up until now, people could not receive their full pension in that situation, and that has had an ongoing negative impact on many older New Zealanders.

During the consideration of the bill by the Social Services Committee, members heard a number of submissions supporting the bill from the perspective of the yachting fraternity. Clearly a considerable number of our older citizens use retirement as an opportunity to take to the ocean wave. For those people the current law and regulations make such cruising highly problematic, as they have to return home every 6 months to retain any eligibility at all for the pension. Those citizens are delighted with the freedom to travel that this new law will provide. Of course, it is not just those roaming the high seas who will benefit from this bill, but all our older people who want the freedom to choose the country they live in, while still receiving full entitlement to superannuation. In an age when so many people here are still migrants themselves and would like the chance to spend time in their country of origin, and also at a time when many of us have children living overseas, the ability to spend considerable periods with family elsewhere is particularly precious.

One improvement we made at the select committee that was endorsed by the Green Party was to make it clear that people who are outside of New Zealand for special medical treatment or training, who serve in the armed forces or our embassy service abroad, who work on a New Zealand - owned ship, or who are undertaking VSA work or missionary work should have that time counted as New Zealand residence when it comes to working out the formula to calculate the proportion of superannuation they are paid while overseas once they turn 65. However, I continue to have a concern that Kiwis who have worked overseas in either a paid or a volunteer capacity for non-governmental organisations other than Volunteer Service Abroad or religious bodies will not be covered by the same provision. I think it is a glaring inequity, as working for Oxfam or Save the Children should not be seen in a different light from working for a religious mission or VSA. We were told that to extend the provision to other not-for-profit organisations would create inconsistencies that would be beyond the scope of the bill to deal with, but I hope the Government will look at how to address the anomaly as soon as is practicable.

On a rather more significant issue, a number of submitters raised the same matter that I talked about in my first reading speech on this bill: the vexed question of the impact of the dollar-for-dollar deduction against New Zealand superannuation payments imposed in regard to private contributions made to Government-administered overseas pension schemes. The matter has come before the Social Services Committee over and over again in the 10 years that I have been a member of Parliament. People are deeply upset by the fundamental inequity of missing out on the benefits of private pension funds in other countries—such as the United Kingdom, Canada, and others—that they contributed to, often for a major part of their working lives. Although it is true that this issue is outside the scope of this bill, heartfelt opposition to the direct deduction policy of section 70 of the Social Security Act 1964 will not go away in a hurry.

I am aware that, when in Opposition, some National members spoke encouragingly to superannuitants in that situation about changes that they might make should they be part of a Government. I urge National to have the strength and foresight to grasp this admittedly thorny issue and make a determined effort to deal with it in a fair and equitable way, rather than leaving it to one side as being too difficult or problematic, as has happened up until now. It is good to see one group of superannuitants and people on the veterans pension being treated with more fairness by the bill before us today, but I am very sure that a section 70 problem will linger until and unless a Government of whatever hue is willing to address this underpinning injustice that impacts on so many of our citizens.

BlueDr JACKIE BLUE (National) Link to this

I am very pleased to take a short call on the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill. I acknowledge the work the former Government did in preparing this bill so that it could be in the House today. The bill amends the New Zealand Superannuation and Retirement Income Act 2001 and the War Pensions Act 1954 to make it easier for older New Zealanders to travel or live overseas. It updates the payment overseas policy that has been in place since 1990.

We live in a mobile world. New Zealanders are living longer and in generally better health. With over half a million predominantly younger New Zealanders living overseas, and with air travel being so affordable, it is only understandable and expected that older New Zealanders will want to travel to visit family and relatives, or to participate in tourist activities. This Government is committed to ensuring that older New Zealanders, whatever country they live in, are able to live in dignity and have the freedom to move around. Older New Zealanders have contributed to our country and they have invested in this country. We need to make it easier for older New Zealanders to travel and move between countries. This bill does exactly that. Instead of the current flat rate of payment, older New Zealanders will be able to receive up to 100 percent, depending on the number of years they have resided in New Zealand. I commend this bill to the House.

PillayLYNNE PILLAY (Labour) Link to this

It is a pleasure to stand and speak in support of the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill. In doing so, I acknowledge the previous Labour Government, which put this bill on the Order Paper, and I acknowledge that the Government is moving forward with this bill. That is a very good thing. I note that I would have been delighted to see this bill progress in the first 100 days of action, rather than some other bills—for example, the bill pertaining to the cutting of KiwiSaver and those sorts of things. Nevertheless it is before the House now, and that is really good.

We know that this bill will work in the interest of superannuitants—and veterans, whom I will talk about later—who have contributed all their working life to New Zealand, and then in their retirement years want to take advantage of those years and travel. Under the old scheme, they were disadvantaged and, in fact, penalised for taking up that opportunity. This bill is very good for supporting superannuitants and enabling them—certainly not in their twilight years; in what some would call a very exciting time of their life—to be in the position, having worked, to travel, to take advantage of the savings they may have been able to make, and to have other opportunities. I think that security in receiving and being able to receive superannuation at that time will make a tremendous difference to the quality of their life, and, indeed, provide for them exactly what they are entitled to, and that is New Zealand superannuation.

The bill is also important—and the Hon Annette King and the Hon Ruth Dyson spoke on this matter—in terms of our veterans, who have given so much in service to this country. It has been acknowledged that they may not be 65 years old; they may be at a stage of their lives where a whole lot of opportunities open up overseas. It is great that they are able to receive their pension—indeed, it is vital that they do—when they are in a position to take advantage of the opportunities to travel or to work overseas.

I am very pleased to stand in support of this bill. I think it will have wide-ranging support, and so it should. I cannot go past mentioning that, along with this bill, we see advantages for superannuitants in terms of the travel policy that was introduced under Labour. I hope that that policy is available to all New Zealanders. It perhaps does not enhance the ability to travel overseas, but it enhances the ability to travel within communities and within cities, which is absolutely vital to the quality of life of superannuitants in New Zealand.

I have tremendous pride in commending this bill to the House. I also cannot go past talking about superannuation and the New Zealand Superannuation Fund. Part of making superannuation available to superannuitants when they travel is ensuring that we have a superannuation fund. The deferral of payments to the New Zealand Superannuation Fund in the last Budget is of great concern to me. On one hand, we are saying it is absolutely essential—and we all agree with this—that superannuation is available, is extended, and is another investment in our hard-working superannuitants and veterans who have contributed so much. We are saying that we are enhancing their payments, yet we are deferring the payments into the Superannuation Fund, which will jeopardise the ability to provide that superannuation.

PillayLYNNE PILLAY Link to this

It is, indeed, ridiculous. The whole fund is not at risk, but certainly the ability to continue providing superannuation at those levels for superannuitants and veterans travelling will be much harder. We know that that was a very silly move of the Government.

We see that New Zealanders are worried and concerned about the security of their pensions, and we see that this legislation will put more pressure on that security. It gives even more reason why the Government should accept that it made a mistake. There is nothing wrong with admitting that it made a mistake. Indeed, there are so many instances—whether it is about the adult and community education funding cuts, whether it is about the cuts to young people with disabilities; there is a myriad of things—where we see that if the Government fronted up and said that it got something wrong and asked how it could fix it, then we would be more than willing to work with the Government on it. I urge the Government in supporting and putting forward this bill—it was not in the 100 days of action, but it is, none the less, happening now—to look at the funding for superannuation. I urge the Government to look at those payments to the Superannuation Fund and say that it did not get it right, so it should look at it. It should not defer those payments; it should keep the Superannuation Fund healthy so that it can provide for all of its commitments for our superannuitants and our veterans, not just now, but for decades and for generations to come.

I could not take a call on this bill without mentioning this matter and urging the Government in this respect. A number of members opposite look quite interested in what I am saying and look quite positive. I ask my colleague the Hon Annette King whether she thinks that. I acknowledge that they are, and I think I see some heads nodding. There have been some very valid and very constructive arguments from this side of the House; there always are. I think the member is right that very careful consideration is being given.

In summary, I say again that Labour is right behind the bill—in fact, we were at the forefront of it—and we support it. We would love the Government to put an amendment up—

Hon Member

You had 9 years to do this—9 years!

KingHon Annette King Link to this

It doesn’t matter how long we had; we did it. You had 9 years to do it when you were in Government last time, but you didn’t do it!

PillayLYNNE PILLAY Link to this

Exactly. To ensure that this happens and this security is provided for superannuitants and veterans, now and for decades and generations to come, I urge the Government to take another look at the Superannuation Fund and to reinstate those payments, because then we have security for people in retirement for the future. I think that is very important. Thank you very much.

ArdernSHANE ARDERN (National—Taranaki - King Country) Link to this

I rise in support of the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill. There are a number of reasons why I do so. One that has been stated is that we have become a nation in an international world, not a parochial island nation at the bottom of the South Pacific. New Zealand now has people with family members right across the world. In fact, the Deputy Speaker, I know, and I both currently have family overseas. Although both he and I are a long way—many, many years—away from being eligible for superannuation, the time may come where we may want to be part of Government superannuation payments and visit our family overseas, and we should be able to do that.

As I understand it, the bill fixes up a number of issues in regard to that. Three main issues are probably worth mentioning here. The current flat rate of a 50 percent payment provides insufficient income for people to function sensibly or have a reasonable standard of living if they are visiting family overseas for a prolonged period of time. Other people travel from country to country because they have more than one family member and those family members are in different places. The current rules restrict them to being able to receive that 50 percent payment only if they have a place of residence in one nation. Obviously, that is very restrictive to some people, and they have to keep returning to a certain destination to be eligible for that. This bill fixes up that problem.

I know a constituent of mine who has family overseas. She herself comes from a very humble background, but her family have travelled overseas and prospered. They are happy for mum to come and live with them for prolonged periods. One family member is in the United States and the other is in the UK. Members can clearly see how this legislation would have an impact on her, and how the proposed amendments will help her in that regard. Payments overseas are presently linked to residence overseas, but this bill fixes that. Those are two things that I personally know of that this bill will help.

I thank the officials and those who were involved in the process of getting the bill to this point. It is good when we have a Parliament that is as united as this one appears to be on this particular legislation, and I know that a lot of senior citizens out there at the moment are very pleased to see this path that the House is going down today.

The third issue of concern is that the rules currently restrict the ability of an older person to be on the go all the time. Some people go overseas, and they get into a permanent state of travel, as it were; they travel from country to country. A member mentioned the late taking-up of travel by yacht—childhood dreams being realised in people’s 60s and 70s. Of course, such people do not have any permanent place of residence. They are of no fixed abode, as it were. They are restricted by the current rules, but this legislation will allow them to have access to superannuation payments, as well.

National supports the bill; we think it is a good idea. I look forward to its passage through the House.

HawkinsHon GEORGE HAWKINS (Labour—Manurewa) Link to this

I will take a short call; there are some points I want to make. This Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill was tabled by a Labour Government, and it was good to hear the Hon Ruth Dyson speaking earlier. This bill will give some certainty, and it is interesting that we are using urgency to pass it through all its stages. That is a really good use of urgency, because it will give some certainty to a lot of elderly New Zealanders. I congratulate Paula Bennett, the sole member of the executive here in the Chamber. I think it would have been good if she had led the debate, but John Carter did a very good job as the Minister for Senior Citizens. He got up quite enthusiastically.

This bill will give a lot of certainty to some people, mainly to those who draw superannuation but also to veterans. Of course, many other New Zealanders may not have the same certainty. What will happen to New Zealand superannuation? I heard a rumour this morning that in the long term the Government—if it ever gets re-elected; I do not suppose it will be, so we should not worry about it—will raise the age of superannuation to 67, or even 68. If I were a young person in my 50s, I would be really worried because that could happen. I think that people need to be aware that today we are giving certainty to one group, but we are not giving complete certainty. What will happen to New Zealand superannuation in the future? That is the real question that will be bothering people who have their ears close to their transistor radio, or, as John Banks used to say, to their crystal set. They will be wondering what is happening, long term, to their superannuation. We have seen National not support the Cullen fund, and that must be a warning sign.

HawkinsHon GEORGE HAWKINS Link to this

Absolutely no vision! If National does not support the Cullen fund and money is not going into it, what will happen to those people relative to others? Of course, relative to others, for those on superannuation, whether they get it in one of the 22 Pacific Island countries or in New Zealand, things will not be too rosy in the future. When Ruth Dyson introduced this bill, there was not the uncertainty there is now. What will happen for those people? Yes, it will be great for those who want to live in a Pacific Island country in their retirement. In my electorate, Manurewa, we have a large Pacific Island community, and they will welcome this bill being passed because it will give them choices. It will give them the opportunity to go back home to one of the Islands, if they want, and enjoy their retirement there. I imagine that that is probably true of people who live in colder parts of New Zealand rather than in the warmer parts that I represent.

But in the end, people ought to be very, very suspicious of what will happen with the superannuation scheme in total. I think people will get worried about that when they start to get mixed messages from the Government. John Key said that if anything happened to the scheme, he would resign. Bill English might like that. He might think that is quite a good idea. Maybe that is why they have differing opinions on it; I do not know. In the end, I think this bill will put current superannuation entitlements into an area that people will not be sure about.

I am very pleased that Parliament is joining together to pass this bill. It is a small step, but it is a very good use of urgency to get the bill through all stages today. I think that is something people will welcome.

Bill read a second time.

Speeches

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