1. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Does he stand by all his commitments relating to New Zealand superannuation?
Hon JOHN KEY (Prime Minister) Link to this
Yes. My cast-iron commitment has always been that the Government will maintain payments at a minimum of 66 percent of the after-tax average wage, and that people will continue to be eligible for superannuation when they reach the age of 65. I am happy to say that as part of last Thursday’s Budget, future funding at this level is locked into the Government’s long-term spending path, and is reflected in all of the Budget’s projections.
Is the Prime Minister’s commitment to maintain superannuation entitlements as cast-iron as the personal written guarantee that he gave to New Zealanders just 6 months ago that he would give them specific tax cuts that they could trust and believe in, which he has now reneged upon?
Firstly, I say that obviously there will be a delay in tax cuts. That was announced on Thursday. The overwhelming feedback I have had on Friday, Saturday, Sunday, and Monday has all been from New Zealanders thanking the Government for the economic leadership we are showing. New Zealanders are saying quite clearly how delighted they are that they have elected a National Government that has a good sense of priorities, and can lead New Zealand through these troubled economic times.
Why does the Prime Minister continue to pretend that the Government can go on meeting superannuation entitlements, when he has cut the funding that makes it possible to do that, when there is a $37 billion hole in the Superannuation Fund, and given that to make up that shortfall he will have to either cut entitlements or raise taxes?
That question just shows the level of miscomprehension from the Leader of the Opposition when it comes to superannuation. Let us understand one point: prior to the Budget we thought the fund at its height would pre-fund New Zealand superannuation by 14 percent, but the new number from Treasury is only 12 percent. To put it another way, 88 percent of superannuation comes from the general tax base anyway, and one of the strongest ways to make sure we can ensure that future superannuation is there is to have a strong economy without having an indebted economy. That is exactly what we will be getting under National—not under Labour.
Nathan GuyNew Zealand superannuation entitlements will be secured if in the mid-2020s the Government is in surplus, has a moderate level of debt, and is not burdened with high borrowing costs. That is what Treasury is now forecasting, thanks to the measures we have taken in the Budget, including temporarily suspending Superannuation Fund contributions. Therefore, far from putting anything at risk, the Budget actually secures future superannuation entitlements.
Was it similarly a miscomprehension by Richard Long and by Gareth Morgan in the Dominion Post this morning, when they described the Prime Minister’s pretence that he could maintain entitlements and cut funding as “Canute-like” and “Political cowardice”?
The policies of the Government are written by the Government, not by independent commentators. All I can tell the Leader of the Opposition is that there will be no increase in the age of eligibility under a National Government—I cannot be sure about a Labour one—and there will be no difference in the 66 percent paid of the after-tax average wage. While we are looking at commentary, I suggest—and I would not strongly suggest this—that if members want to look at Phil Goff’s report, they will find that on page 2—
Keith LockeI raise a point of order, Mr Speaker. I cannot hear a word back here, and I suggest, as the noise level rises, that you quieten members down a bit.
Mr SPEAKERThe honourable member makes a valid point. Members will please show just a little courtesy to the members at the back of the House, who struggle to hear.
Hon Trevor MallardSorry, Trevor? What was that, buddy? I go back to Phil Goff’s report. It states that the focus of my first Budget should have been on protecting jobs, and that it failed. The No. 1 way to see New Zealanders down the road from their jobs is if their businesses cannot be funded. That is what happens when we have a credit downgrade, and that is what we would have had under a Labour Government.
Hon Jim AndertonDo the Prime Minister and his Minister of Finance intend to be in Parliament in their present positions in the mid-2020s to honour the commitments they have made today, or will an 11-year moratorium on Government contributions to the New Zealand Superannuation Fund, resulting in a $37 billion shortfall by 2030, not lead to significant changes like tax increases, lowering payment levels, and raising the age of entitlement; and if all of those changes are remotely likely, why does the Prime Minister not do the honourable thing and resign now, in order to meet the commitment he made before the election?
Firstly, it is my intention to be here in 2020, but that, of course, is in the hands of the good people of Helensville and the National caucus. Secondly, that is 11 years away, which will make me by then—on my calculations—about 58 or 59, and I will know that I am 6 years away from getting New Zealand superannuation, which will be paid at the age of 65.
On what basis does the Prime Minister disagree with the Treasury official who sent an email to Television New Zealand describing his announcement on superannuation as a fraud—a $9.2 billion fraud—because that is the amount by which the return on investment and taxes on the superannuation contribution exceeds its cost?
We utterly refute that that is the advice from Treasury. I suggest that the member looks at the official papers, where he will see that Treasury’s advice supported the view taken by this Government.
I seek leave of the House to table an email from a Treasury official to Television New Zealand that says that the New Zealand Government—
To what extent in the first half of this century does the Superannuation Fund actually pre-fund New Zealand superannuation?
The Superannuation Fund is actually a small part of the equation. Even if the Government continued to make full contributions the fund would, at most, pay for 12 percent of the annual cost of New Zealand superannuation, assuming everything went right in the fund’s return. That means, as I said earlier, that 88 percent of superannuation at any point in New Zealand’s future is paid from the general tax base.
Is the Prime Minister, in the interests of transparency and honesty, prepared to immediately release all of the Treasury advice that he and his Government have received on the implications, impact, and consequences of the actions he took in gutting the Superannuation Fund?
I can assure the Leader of the Opposition that we will be releasing all of the Treasury papers—
Very soon. I strongly suggest that the Leader of the Opposition read them, learn something about economics, and then apologise to the New Zealand public for wanting to ensure that their credit rating was downgraded, that they had to pay more for their interest rates, that they could not borrow money, and that their jobs were put at stake. Those members are a credit card Opposition and they are proving it. In fact, their credit card is about to be cut up for a very long time.