2. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
What impact has Government policy had on recent movements in New Zealand superannuation rates?
Hon BILL ENGLISH (Minister of Finance) Link to this
Since 1 October 2008 a combination of tax cuts and other adjustments has seen superannuation payments increase significantly. In that time, the single rate for a person living alone went from $571 a fortnight to $636 a fortnight, which is up by nearly $65 in the hand per fortnight. The rate for a married couple went from $879 a fortnight for each person in October 2008 to $974 a fortnight, which is up about $100 in the hand or more than 11 percent. The adjustments are a combination of the effect of tax cuts and inflation adjustments.
They will benefit in the same way that the previous Labour Government argued superannuitants benefited from the tax cut it introduced on 1 October 2008, which Mr Goff appears to have forgotten about. As a result of the tax cut given by the Labour Government in 1 October 2008, superannuitants paid less tax on their national superannuation, and the increase in the after-tax average wage lifted the 66 percent floor. In addition, if the Government were to increase GST, superannuation payments would be increased up front by just over 2 percent, to reflect a one-off general rise in prices.
Is it possible that retired people whose income is from New Zealand superannuation could be directly worse off, compared with today, as a result of measures being considered in the Budget?
Superannuitants will know that because of their experience of the benefit of tax cuts on national superannuation, it is not possible for them to be worse off as a result of the kinds of measures the Government is proposing.