Debate on Crown Entities, Public Organisations,and State Enterprises — Government Superannuation Fund Authority

I was rather hoping one member of the Opposition would want to debate this extraordinarily large element of the New Zealand Government’s expenditure and programme. As I outlined this afternoon in the House, the two largest long-term fiscal pressures facing any Western Government are provision for superannuation and provision for health care, partly because of the ageing of the population. But the Opposition is far more interested in debating the New Zealand Teachers Council than it is the New Zealand Superannuation Fund.

During 2002-03, the New Zealand Superannuation Fund had not gone to market. It was still being managed within the Debt Management Office in Treasury. Subsequently, arising out of that year, the fund has gone to market. Despite the claims made—for example, in the Listener, in what I regard as National’s weekly column on politics—that the New Zealand Superannuation Fund has lost lots of money on the market, it has done absolutely no such thing. Since it went to market in October last year, it has outperformed its own targets. It has outperformed targets, such as the rate of return on New Zealand Government bonds. That can be compared, for example, with the Government Superannuation Fund, which, when the equity markets were bad, was losing money. Even so, since it went to market, it has averaged a post-tax return of 4.7 percent, which is above the bond rate return in terms of a post-tax rate of return. So it has done better than it would have done had it not gone to market in that period.

We have heard a great deal about the supposed losses that were made, all of which were unrealised losses on paper, but, suddenly, now that the funds are doing well, we hear a total silence from members opposite—except on the question that we want answered. We know about the National Party’s “by lunchtime” promise. It will reform the Resource Management Act within 3 months—so it says—and, of course, it promises that it will have nuclear ships back by lunchtime, given the opportunity. We want to know whether National, if it became the Government, would have the New Zealand Superannuation Fund gone by lunchtime. If the New Zealand Superannuation Fund is to go by lunchtime, what will replace it in terms of security for pensions for the baby-boom generation? There are tens of hundreds of thousands of people in that generation, born between 1946 and 1961 or so, who want to know where their pension is to come from. There is only one answer: a Labour-led Government. There is very little hope it will come from a National-led Government, because National says that the New Zealand Superannuation Fund is not important to the future of New Zealand's superannuation. Well, the latest figures show that, at peak, 36 percent of the funding of New Zealand superannuation will come from the Superannuation Fund. That is equivalent to $138 a week of the current married rate for superannuation. We should go out there now and ask superannuitants—those who are married couples—whether they would notice a cut in their superannuation of $138 a week. No doubt, to people like Mr Key, that is peanuts, but to the great majority of superannuitants, it is a great deal of money indeed.

I raise the point further, because what the Budget documentation will show is that the only real room available for tax cuts to the rich—so beloved of the National Party and the ACT party—will come about only if the Superannuation Fund is abolished. The only real big headroom for major fiscal initiatives over the next few years will occur only if the New Zealand Superannuation Fund is abolished by any future National Government. So the National Party will face some very hard choices and some very hard questions come Thursday afternoon in the House, and subsequently. It will face them particularly from people who are part of the baby-boom generation. Lynda Scott is one of those people, although she does not look as if she is booming very much at the present time, because she is well looked after in other respects. Mr Carter claims to be a baby-boomer, although I think he may be flattering himself slightly in that regard. He is more a sort of pre-boomer, like I am.

We want to know whether superannuation, like all the other State-owned enterprises and State assets, will be gone by lunchtime if the people make a mistake and vote for a National Government. Or will the New Zealand Superannuation Fund remain in the long term as an important part of how to fund New Zealand superannuation so that ordinary New Zealanders can enjoy a decent pension in retirement? That is the question we need an answer to today. It is one of the many questions the Opposition National Party will have to face over the next 15 or 16 months as we run into the election, and it will get a surprise when it understands it has no answers.

I want to follow on from where Dr Cullen left off. Is it not ironic that, as Dr Cullen said, not one speaker from the other side of the Chamber wants to talk about the Superannuation Fund? All the members on that side, cowering behind their desks, like the pack of so-and-sos they are—and I do not think the term “so-and-sos” is unparliamentary—know exactly what they did to national superannuation when they were in office. What we know is that when we got into Government, we put some certainty back into the lives of pensioners. We said we would reverse the cuts that members opposite made. We said we would make the pension no less than 65 percent of the average wage, and we did. We inflation-indexed it and we set up the Superannuation Fund—a fund that Dr Brash and every party of the National Party has run around—

💬 Rt Hon Winston Peters: Where is he?

I cannot respond to that because, as the member knows, I would be breaching the Standing Orders. Those members do not want to debate the matter because, as Dr Cullen said, they want to abolish it. I look forward to going to Mr Heatley’s and Mr Carter’s electorates, and to every electorate around this country, to tell Grey Power and the pensioners what they would get under a National Government. Let us add it up. If a party says it will make tax cuts, then that means less revenue. If a party—the National Party—says it will abolish the Superannuation Fund, then, as Dr Cullen pointed out, how will it guarantee, as the National Party now says it will, the current levels and the current age of eligibility—although on this it now says “maybe”? One of the ways to do that would be to sell public assets, and we know that that is about as popular as some members on that side, in their obscurity. We know that Landcorp, Kiwibank, and all the very profitable, good, going concerns and State-owned enterprises, such as New Zealand Post and others that people iconify and that this country wants to see maintained and held by the Crown, would, under that crew over there, be gone. They would be history—on the block.

If I were a pensioner, or even, maybe, as Dr Brash has pointed out, a person now in my 50s, I would be shaking in my boots, because under Dr Brash there would be no superannuation fund, although there would be a tax cut that would mean less revenue. But then the numbers and the mathematical rationale stop. No one knows how, under a National Government, the pension at the current levels and age of eligibility would be maintained, as we have promised it will be. What we do now know, of course, is that that will not happen under a National Government.

Dr Brash said this about people now aged 50: “I suspect that eventually—if not in five years then almost certainly in 10 or 15 years—we will have to have a look at the age of eligibility again,”. He said that in the New Zealand Herald on 4 March 2004. Prior to making that statement he said—in places all around this country except in this Chamber—that the age of eligibility would have to be raised to age 70. Even Mr Woolerton, in a couple of years, would have to wait. It speaks volumes that no member of the Opposition, after wanting to put the review of The Guardians of New Zealand Superannuation on the list, will get up to speak on it—just as no member on that side will get up to debate the economy, because it is growing; unemployment, because it is decreasing; or employment, because it is increasing. Opposition members cannot handle all that good news, but they go around the country and scratch every little itch that certain members of the community want scratched.

I say again, that if National has an alternative to the Superannuation Fund that will guarantee the age of eligibility and inflation-proof levels at not less than 65 percent of the average wage, then one of those geniuses on that side should get up and tell us. They have 18 months before the elections. Maybe Mr Heatley might get up, or Mr Carter, to explain to his constituents in the far north, what National’s policy is on guaranteeing the age of eligibility and the levels of entitlement. Every pensioner, including Mr Carter’s dear old mum, whom he talks about so often in this place—and I am sure she is a dear old lady who is proud of her son—is now asking how her son and the National Party will guarantee her pension and the age of eligibility. National does not have a policy on superannuation, and every New Zealander knows that.

Reports noted.

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