Brash confirms National will keep superannuation fund

The superannuation policy is a U-turn on National's position at the last election when it campaigned against the fund.

National leader Don Brash today confirmed four-day-old news that his party would keep the Cullen superannuation fund if elected to government.

It was reported late last week that National would support the New Zealand Superannuation Fund -- which Finance Minister Michael Cullen set up to put money aside for future pensions -- but Dr Brash would not confirm it and dismissed the reports as media speculation.

He had planned to make the announcement today, and delivered it in a speech to a meeting of North Shore Rotary Clubs in Auckland.

Dr Brash said the next National government would "retain" the fund.

The policy is a U-turn on National's position at the last election when it campaigned against the fund.

Dr Brash said he would send Dr Cullen a letter tomorrow -- outlining National's support for keeping New Zealand Superannuation at 65 per cent of the average wage at age 65 for a married couple, and committing to the New Zealand Superannuation Fund.

Dr Cullen today welcomed Dr Brash's policy "flip-flop", saying it would help secure the long-term viability of New Zealand Superannuation.

He suggested the lack of discipline by National caucus members in leaking the policy shift to the media put in question Dr Brash's ability to enforce any agreement the National Party might enter into.

"But it took a huge U-turn for Dr Brash to embrace the fund as he has been scathing of it in the past."

In July 2002, while then a candidate, Dr Brash described the super fund as a "serious mistake" that could lead to substantial borrowing.

He said at the time that the fund would absorb large amounts of cash, for several years, at a time when the Government was also undertaking a substantial investment programme.

Dr Brash explained today in his prepared speech notes that National was always committed to running a fiscal surplus at this stage -- a time when there were a relatively small number of New Zealanders eligible for super.

At the last election, National had favoured reducing debt.

"The New Zealand Superannuation Fund represents the alternative course, leaving debt levels roughly stable and building up an investment fund."

The net worth to the Government was much the same whichever course was taken but it seemed many people were reassured by a fund they could "see".

Dr Brash said he wanted to assure all New Zealanders who were currently receiving super that a National government "would not change the way their pensions are calculated".

"Those within a decade or two of retirement should be absolutely assured they will still get New Zealand Superannuation on the present basis -- from age 65, at 65 per cent of the average wage for a married couple, with no income test or asset test."

Those under the age of 30 could be confident New Zealand Superannuation would be available at retirement, its value would be a good deal more than now, and their incomes during their working lives, wealth at retirement and life expectancy were likely to be significantly higher than for their parents' generation, Dr Brash said.

"For younger New Zealanders, the demographic pressures are manageable. Even if, in 20 or 30 years time, there is a need for some adjustment to the scheme, there is little doubt that, because of rising incomes, the value of your superannuation will still be much more generous than it is today."

ACT leader Rodney Hide today described National's U-turn as "solely political".

"National wants to cuddle up to Labour policy to minimise political differences. National's concession to the Cullen fund sells out hard-working Kiwis who are already squeezed by high taxes."

He claimed in a statement the fund was taking $1400 a year out of each household.

The fund would be only a drop in the bucket of what was required over coming decades and gave people a false sense of security, meaning fewer people saved for their retirement, Mr Hide said. 

Progressive Party leader Jim Anderton said National should be congratulated for its "sensible decision" to support the super fund, saying it was good news for future retirees.

- NZPA