Super, scheme likely to change again

Press, 21 July 1986, Page 8

Super, scheme likely to change again

PA Wellington Further changes to the national superannuation scheme have been foreshadowed by the Government

Labour came under heavy criticism when it imposed a tax surcharge in April. 1985, and has admitted it had been politically damaging.

The Minister of Internal Affairs, Mr Tapsell, foreshadowed further moves on Saturday when he said: "It is certainly clear to me and I think to most people, that we will not be in a position to continue with national superannuation as it was originally envisaged.”

Last week a Government discussion paper suggested options for changing the scheme, including raising the age and targeting assistance to those in financial need.

Mr Tapsell said the Government was considering the scheme and he hoped it would not be long before the results of a review were announced, along with whatever steps ought to be taken to modify it

The scheme had to be modified at least twice since its introduction and there was wide public feeling the system needed a further review, he said in Mt Maunganui. “I think there is a general realisation that we cannot continue providing a full rate of superannuation from as early an age as 60 years for those who are still working and earning, or those whose assets are such that they really do not need it.” The Ministerial task force on income maintenance is considering reforms and wants to con-

suit the community before putting forward its ideas to the Government to look at inclusion in the 1987 Budget In a discussion paper it said national superannuation cost more than $3300 million a year before tax — a total of 15 per cent of all Government expenditure.

It suggested various options to make sure the scheme could keep going in the future without being a heavy burden to taxpayers. The options included:

• Concentrating on those most in need — for instance by using an income test for those under 65 or using the tax surcharge approach. • Having one rate up to a certain age (for instance 70) and then a higher rate after that.

• Raising the age for getting national superannuation

• Paying a lower rate to everyone, and then having an extra payment for those with little other income.

The paper said the issue was big and the Royal Commission on Social Policy, might have to look at it in more detail.

Late last year the then Acting Prime Minister, Mr Palmer, told reporters the surcharge had been imposed because the Government had believed New Zealand could not afford the level of national superannuation spending. Any review of the surcharge would depend on the state of the economy, he said then.