Labour's about-face on Super Fund

David Shearer. Photo / Mark Mitchell

Labour leader David Shearer has set out a significant policy shift, saying his party would not re-start contributions to the Super Fund until the country could afford to do so.

Mr Shearer laid out the shift to the Wellington Employers' Chamber of Commerce this morning.

While that policy would change, he said he believed Labour's 2011 policy to gradually raise the super age to 67 did still merit discussion.

The change on the Super Fund brings Labour's stance closer to National's which put contributions on hold soon after it went into Government in 2008 because of the economic downturn.

Labour criticised National strongly at the time - it set up the fund when it was in Government to help fund the future costs of superannuation.

Mr Shearer said continuing contributions would not have increased net debt, but New Zealanders had seen it as borrowing to invest "and they didn't like that."

He said before the last election, Labour had not signalled its plans on the Super age well.

However, bold decisions were needed.

He said Labour had gone into the last election with policies that would have meant it had to borrow more in the short term, although the return to surplus would have been similar to National's programme.

"But we didn't win. New Zealanders told us they were uncomfortable about the rate of borrowing. We have listened."

He said until the country was back in surplus, any new spending would have to be paid out of existing money, through new revenue or re-prioritising. Limited borrowing would be allowed rather than selling state assets.