"The superannuation policy disinterred today by Winston Peters is confused and dishonest," Labour finance spokesperson Michael Cullen said today.

"True to his populist traditions, Mr Peters is promising to spend money without telling us how he plans to raise it.

"It is clear that the level of contribution specified by Mr Peters will not be sufficient to fund the two-tier system he talks about. Labour has estimated that a superannuation tax rate of approximately 8 percent will be required to finance a flat rate New Zealand Superannuation scheme with the wage floor restored to 65 percent of the average, ordinary time, after tax weekly wage.

"Mr Peters is proposing that the 8 percent will not be levied on the first $5000 of income and will be sufficient to pay for a second tier for many retired New Zealanders above the New Zealand Superannuation level and with the additional costs created by the administration of individual accounts.

"The proposal is also confused in that Mr Peters talks about restoring the base level for the married couple to 67.5 percent of the average wage then talks about keeping purchasing power constant which implies dropping the wage relativity over the longer term.

"The policy is the same as New Zealand First took into the 1996 election. In that respect it represents a triumph of pigheadedness over experience.

"When the experts tried to turn the Peters' formula into a workable proposition, they had to twist it beyond recognition - and still the public rejected it by a massive 91.8 percent.

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