Act to vote against super levels

By VERNON SMALL deputy political reporter

The Act Party has struck a discordant note over superannuation levels, vowing to vote against locking in the present state-funded entitlements.

Leader Richard Prebble said Act would vote against part one of the Government's superannuation bill, which guarantees the present payment level for a couple: 65 per cent of the average wage, paid at age 65.

Act would also reject part two, which sets up the scheme to partly pre-fund the cost of future pension payments.

All other parties in Parliament support the present entitlement clauses. But the Government has only a 65-55 majority - with the help of New Zealand First and United Future - for the section setting up the pre-funding scheme.

Mr Prebble said Act was being upfront with voters.

"The present super scheme is not sustainable into the future.

"They should save for their own retirement and Parliament should be looking for sensible ways to help people do that."

Act finance spokesman Rodney Hide said it was not an issue about the appropriate level of pension, but what the Government could afford to pay when the number of retired people was set to double over the next 30 years.

"It's like a king sitting there on the beach saying, 'Stop the tide coming up.'

"While National and Labour might agree now, no one's in a position to fund it in the year 2020 on the current plans."

The big parties would break their promises again, he said.

Act would protect the position of the elderly and provide tax cuts for the young so they could save.

"If you did it now you could protect the existing retired with some transitions going down."

Act's policy would still provide a state safety net.

Mr Hide said the present situation was the same as in 1975 when Prime Minister Sir Robert Muldoon promised a universal pension set at 89 per cent of the average wage and paid at age 60.

"Muldoon said it was going to last forever, no worries." But later Governments were forced to drop the payment and raise the age of entitlement.

Mr Hide said that even under Dr Cullen's partial pre-funding scheme, the top tax rate would have to rise to 59 per cent if all the present policies were retained.