Media Release 23/10/08

Good News, Bad News And Worse News!

The bad news is that New Zealand's CPI increase to the end of the September 2008 quarter is 5.1 percent, the highest increase since the June 1990 quarter. The main drivers are the cost of petrol up 29.3%, grocery food up 12.0% and electricity up 6.9%.

The good news is that these dramatic increases are expected to have corrected by the end of the year. For most New Zealanders that is good news.

For Superannuitants that might not be such good news. Why?

The worse news is that Superannuation is adjusted by the CPI increase at the end of the December quarter. If there is a dramatic correction in the December quarter, say to 3.1%, then that is the amount of increase Superannuitants could expect in April 2009. (Assuming no change in the Average Wage factor)

The problem is that older New Zealanders will have struggled to exist throughout the year and then get to "enjoy" only a minor increase in Superannuation next April!

This is why Grey Power is calling for a review of the way the CPI is used to determine the superannuation entitlement and to have superannuation set by an independent commission.

Ian S Anderson

Grey Power NZ Federation Inc

Chair, Superannuation & Taxation Committee

ENDS

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