Govt still studying super, proposal

Press, 2 September 1986, Page 17

Govt still studying super, proposal

By

OLIVER RIDDELL

in Wellington

A considered Government response on the Opposition’s altered superannuation policy is still some weeks away.

The Minister of Finance, Mr Douglas, has already criticised it for discrepancies in costings. The Prime Minister, Mr Lange, said the Government was still considering the National Party’s policy.

The issue had to be thought through very carefully and a proper examination would take some time, he said. Officials had not had time to give the Government more than an initial assessment of the proposal. It was apparent, however, that National was overstating the savings that were likely from the

proposal. Mr Douglas said savings would be far less than the 513.350 M during the next 30 years. Some of the assumptions in the proposal were incorrect and others highly questionable, but at least the new policy showed that National now accepted that the costs of the scheme it had introduced in 1976 were unsustainable. National’s calculations assumed that savings were first achieved in .1986, Mr Douglas said. In fact, if implemented in 1987, the first savings would not accrue until 1989. The Minister of Social Welfare, Mrs Hercus, said the numbers who would qualify for a means-tested benefit would be significantly greater than National had allowed for.

Reduced expenditure on support for those aged 60 to 64 years would have to be offset by increased spending on support for other people, she said. Mr Douglas said the proposal to remove the surtax on national superannuation would mean greater expenditure in the short term.

The time period before net savings were achieved was likely to be substantially greater than National had allowed because the proposed phasein would work very slowly whereas the loss of the surcharge would be immediate.

The Opposition’s spokesman on social welfare, Mr Venn Young (Nat., Waitotara), said the Government’s reaction showed it was clearly committed to the surtax as a cost-saving measure.