Why Should Savers Pay Twice For Superannuation?

United New Zealand leader, Hon Peter Dunne, is not surprised the Government has had to delay plans to pre-fund superannuation from next April.

He says the Finance Minister's proposed dedicated fund for future New Zealand superannuation is a disincentive to private savings, which is why he will struggle to get political agreement.

"People who are saving now for their retirement will resent having the Government put aside another portion of their taxes to provide future superannuation for those who have not been so prudent."

"Why should today's savers pay twice?" Mr Dunne asks.

Mr Dunne says Dr Cullen's plans amount to the "socialisation" of superannuation, and make the re-introduction of tax breaks for savings contributions virtually inevitable.

"At the moment, all Dr Cullen can do is muse about the possibility of a dedicated fund, and wonder publicly about the sustainability of the current TTE (Tax/Tax/Exempt) regime for superannuation schemes, but he has no concrete plans to deal with the issue."

"What is certain is that he is trading off the prospect of any future tax cuts for the saving generation against pre-funding everyone else's superannuation."

"Unless he protects the position of today's savers, all he will have done is replace the current politically unsustainable superannuation arrangements with a new set of politically unsustainable arrangements."

"Having better off New Zealanders pay for their own superannuation and everyone else's besides might suit Labour's and the Alliance's political agenda, but it will not resolve the problem."

"All Dr Cullen is doing is adding more confusion and uncertainty to an area already rife with both," Mr Dunne says.

ENDS

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