"Either Mr English has completely failed to understand how the proposed New Zealand Superannuation Fund will work or he
is being mischievous," Finance Minister Michael Cullen said today.
Dr Cullen was responding to a statement by Mr English that at its peak, the Fund would contribute only around 14 percent
of NZSuper costs.
"In fact, the contribution will be closer to 25 percent. Mr English is counting only the amount which will be directly
drawn down from the Fund.
"But the Government will receive a further revenue stream from the Fund in the taxes paid on the Fund's earnings.
"It seems an extraordinarily silly mistake to make since obviously the point of establishing a capital investment Fund
is to generate income from the accumulated assets," Dr Cullen said.
"The Government has always been very clear that we are only talking of partial pre-funding. We have never said, or even
implied, that the Fund will be able to fully meet future New Zealand Super costs.
"Rather than trying to score petty political points, Mr English should explain what National's alternative is. What
would it do to make up the 25 percent contribution
the Fund would provide?
"For someone on Mr English's salary, a 25 percent cut to the pension might not look too frightening. But it would tip
many elderly New Zealanders into poverty," Dr Cullen said.
"And is it too much to ask for Mr English to try to be just the tiniest bit consistent? First he criticises the scheme
as a "monster." Now he criticises it because it will not be big enough. If he wants to be taken seriously on this issue,
he will have to do better than that," Dr Cullen said.
Attached: Column One is the draw down from the Fund. Column Two is the projected tax revenue. Column Three is the two
together.
Fund Share of Benefit Tax Total
2002 -13.3% 0.1% -13.2%
2003 -25.7% 0.6% -25.1%
2004 -36.9% 1.3% -35.6%
2005 -52.9% 2.3% -50.6%
2006 -52.2% 3.5% -48.7%
2007 -51.4% 4.6% -46.8%
2008 -51.6% 5.8% -45.8%
2009 -50.7% 6.9% -43.8%
2010 -49.3% 8.0% -41.4%
2011 -47.6% 9.0% -38.6%
2012 -44.2% 9.8% -34.4%
2013 -41.1% 10.6% -30.5%
2014 -38.3% 11.3% -26.9%
2015 -35.4% 12.0% -23.4%
2016 -32.9% 12.6% -20.2%
2017 -30.3% 13.2% -17.1%
2018 -27.8% 13.7% -14.1%
2019 -25.1% 14.1% -11.1%
2020 -22.5% 14.4% -8.1%
2021 -19.8% 14.7% -5.1%
2022 -17.0% 14.9% -2.1%
2023 -14.4% 15.1% 0.7%
2024 -11.5% 15.2% 3.6%
2025 -8.8% 15.2% 6.4%
2026 -6.1% 15.2% 9.1%
2027 -3.4% 15.1% 11.7%
2028 -1.0% 15.0% 13.9%
2029 1.0% 14.8% 15.9%
2030 2.7% 14.7% 17.4%
2031 4.1% 14.6% 18.7%
2032 5.4% 14.5% 19.9%
2033 6.6% 14.3% 21.0%
2034 7.8% 14.2% 22.0%
2035 8.8% 14.0% 22.8%
2036 9.9% 13.8% 23.7%
2037 10.8% 13.6% 24.4%
2038 11.4% 13.4% 24.8%
2039 11.9% 13.2% 25.1%
2040 12.2% 13.0% 25.2%
2041 12.3% 12.9% 25.2%
2042 12.3% 12.8% 25.1%
2043 12.1% 12.7% 24.8%
2044 12.0% 12.6% 24.6%
2045 11.9% 12.5% 24.3%
2046 11.8% 12.4% 24.2%
2047 11.6% 12.3% 23.9%
2048 11.4% 12.2% 23.6%
2049 11.2% 12.2% 23.4%
2050 11.2% 12.1% 23.3%
2051 11.2% 12.0% 23.3%
2052 11.3% 11.9% 23.2%
2053 11.6% 11.8% 23.4%
2054 11.9% 11.7% 23.6%
2055 12.4% 11.6% 24.0%
2056 12.9% 11.4% 24.3%
2057 13.2% 11.3% 24.4%
2058 13.4% 11.1% 24.5%
2059 13.5% 11.0% 24.5%
2060 13.6% 10.8% 24.4%
2061 13.7% 10.7% 24.4%
2062 13.9% 10.5% 24.4%
2063 14.1% 10.4% 24.4%
2064 14.1% 10.2% 24.3%
2065 14.1% 10.0% 24.1%
2066 14.1% 9.9% 24.0%
2067 14.0% 9.7% 23.7%
2068 13.9% 9.6% 23.5%
2069 13.7% 9.4% 23.1%
2070 13.4% 9.3% 22.7%