Hard thinking now on super. policy

Press, 29 August 1986, Page 5

Hard thinking now on super. policy

By

MARTIN FREETH

in Wellington

National’s new superannuation policy has forced the Government to think hard about what it intends to do on this sensitive issue. The Government has indicated before a preference for leaving an overhaul of national superannuation until after the Royal Commission on Social Policy, in two years. Now it will be reluctant to face the next election without a policy commitment to rival that of National’s.

The Opposition plan to chop immediately the Labour tax surcharge and then lift the entitlement age to 65 only gradually should prove electorally popular.

It combines a sense of realism about what will be sustainable in the cost of State-provided superannuation in the long term with an immediate income boost for today’s superannuitants hit by the surcharge. The Prime Minister, Mr Lange, will respond to National’s policy lead in the next two days after a detailed study of the new policy.

He is expected to attempt to discredit the level of savings National claims it can achieve and on which it bases much of the attractiveness of its policy. However, Mr Lange may also indicate a willingness to pick up the commitment to move the age of entitlement back to 65.

That is an idea widely circulated in recent years as one obvious option for limiting the growth in the cost of superannuation, particularly as those over 60 become a relatively larger population sector after 2000. A recent projection by the Population Studies Centre at Waikato University suggests the ratio of people in that group to those in the workforce will increase from 349 to 1000 in 1986 to 672 to 1000 in 2036. The Government has long indicated its intention to scale back superannuation in the face of that population trend. Mr Lange picked up the theme at the start of this week when he suggested a bipartisan approach between Labour and National because of the scale of the problem and its importance to the lives of individuals planning ahead for retirement. The Opposition’s spokesman on social welfare, Mr Venn Young, yesterday provided more detail on National’s policy by confirming that a means test on people applying for an interim benefit after age 60 before drawing superannuation would not apply to personal assets. Mr Young said the benefit would be set at the same rate as unemployment and sickness benefits.