Party rules out means testing

NO TESTING: Kieran McAnulty said, despite concerns, Andrew Little and the Labour Party have no plans to introduce means testing of the universal pension scheme.

Labour says National wrong on pensions

The Government's refusal to contribute to the "Cullen Fund" and the cutting of the KiwiSaver kickstart could be costly for Wairarapa, says Labour's Kieran McAnulty - but the party is not likely to income test pensioners.

Labour leader Andrew Little came under fire following the 2015 Budget announcement when he told media Labour would, if elected in 2017, consider means testing the universal pension scheme.

Mr Little was also quoted as saying the rising cost of New Zealand superannuation, forecast to rise to $30 billion by 2030, scared "the beejesus out of him".

Mr McAnulty, spokesman for Wairarapa Labour and member of the Labour Party policy council, said means testing was not on the agenda for the Party.

"Andrew's comments were a reflection on the situation as we see it, but they were certainly not a policy decision," he said.

"As a member of the policy council, I can say with authority no decisions have been made."

Mr McAnulty said Labour's biggest concern was keeping the pension universal in the face of rising costs and the current Government's axing of "top-up" schemes to assist people saving for retirement.

He mentioned the John Key-led Government had suspended contributions to the New Zealand Superannuation Fund - otherwise known as "the Cullen Fund" - which was set up to pre-fund the future cost of the pension scheme.

Without contributions from the fund to offset rising costs, Mr McAnulty feared it may not be sustainable to keep the scheme all-inclusive.

"With superannuation predicated to cost $30 billion by 2030, the Government would need to contribute $2.2 billion a year into the Cullen Fund to pay for it," Mr McAnulty said.

"Obviously, we want to keep the pension universal.

"But without top-ups from the Cullen Fund, future governments may be forced to consider rash measures - like income testing.

"The National Government has left a mess for successive governments to clean up - it's irresponsible."

Mr McAnulty said he was also troubled by the Government's move to scrap the $1000 government start-up package for KiwiSaver - and predicted it would impact on Wairarapa's ageing population on low or fixed incomes.

"For a person on the minimum wage, that $1000 kick start would be worth tens of thousands," he said.

KiwiSaver was supposed to be "a nest egg to give people something to supplement their retirement savings".

As a result Wairarapa's economy could suffer in the long term, he added. "If people don't have the disposable income, they won't be spending it locally.

"It was disappointing to see, in this Budget, the Government has set aside nothing to invest in the business development and attractions in regional areas."