-
Retirement savings - Source: ONE News -
Watch Video
-
Related
The government has no plans to change superannuation entitlements or raise the age of eligibility in the face of a Treasury report's dire warnings of the burden of an ageing population.
Finance Minister Bill English says the government would not go back on its promise to retain entitlements but the next round of tax cuts would not be happening in the short term.
"The only options that are feasible are options of changing taxes around. We will need to collect all the current amount of tax," he told reporters.
"If we can get some better results on the economy then we will get some more tax revenue in. But in the shorter term there isn't an option on giving away a whole lot of revenue."
The Treasury fiscal projections to 2050, warned of ballooning debt, not enough tax to fund government spending and an aging population.
English says the government has no intention of going back on its promises about super and that would be up to future governments to consider.
"Future governments haven't made the undertakings the current government has made. Treasury's given the same advice about super for 20 years, it hasn't changed. We made an undertaking and we are sticking to that undertaking."
More people were choosing to stay on at work longer and English expected that to increase.
"This is a group of people with skills and experience, if we do a good job of lifting growth in the economy they will be needed and they will have a choice of opportunities."
Superannuation was less than 10% of government spending and National was focusing on greater efficiency and restricted growth for the other 90%.
"The government has avoided rip and bust savings. We want to make considered decisions that control the growth of public spending maintain public services."
Government departments knew to expect little or no new money over the next three to five years, English says. That would be most challenging in the education health and justice areas.
"The next budget will be the first year of $1.1 billion of new spending. It does mean the whole public service and the government has to look pretty hard at the money it's already spending."
If the government limited increases to $1.1b for the next 15 to 20 years services would be under pressure.
"We need to do better than that, it will be difficult to maintain public services over that period of time with hardly any new money."
Labour Finance spokesman David Cunliffe says the report showed the government was wrong to suspend payments to the New Zealand Super Fund.
In the May budget the government announced it would pay a reduced amount into the fund this year, and make no further contributions for the next 10 years.
"The first thing that should be done is to restore pre-funding, the Government makes a return on average on the New Zealand superannuation fund which is well in advance of the cost of its capital borrowings, so it is simply not true to say that the solution to the superannuation problem is to refuse to prefund."
Cunliffe says without resuming funding the Government could not afford to pay super in the future.
He says Labour's policy was to maintain the eligibility age for super at 65 years-old.
"Simply putting onto our children the costs of superannuation is not a solution to today's crisis."
He asked English about the fund during question time in Parliament.
English says it did not make sense for the government to borrow money to fund super payments, especially when that could impact on credit ratings.
Cunliffe also said the government's emissions trading scheme failed to make big polluters pay and added to debt. English said his party's scheme was less costly than Labour's had been.
