Cullen accepts superannuation bill scrutiny

Finance Minister Michael Cullen says he is happy for any further "substantial" changes to his Superannuation Fund Bill to be given more scrutiny.

Dr Cullen and New Zealand First Leader Winston Peters are to meet today to discuss changes NZ First wants to the proposed law in exchange for its votes to pass it into law.

The Government wants to set aside part of its surpluses to partly fund future superannuation demands. NZ First wants the proposed bill to allow future governments to convert the general fund into individual accounts.

Mr Peters has said the present proposal allowing for a review of this matter is inadequate, but he expects no problem in reaching some agreement.

Even if Dr Cullen fails to get enough votes in Parliament, he still intends to set aside the money and campaign on the fund at the next election.

Dr Cullen said yesterday that he was hopeful of a resolution with Mr Peters after the Government's usual ally, the Green Party, rejected the fund and the use of surpluses to fill it up.

"Mr Peters has a legitimate point of view. It's one that I will try to accommodate and we will take matters from there."

Dr Cullen also said he did not "have a problem" with any "substantial" changes agreed going back to the select committee for scrutiny.

The committee had made such a request after some Opposition MPs accused Dr Cullen of turning the select committee process into a sideshow. National finance spokesman Bill English said last week that consensus and stability would not be gained by "back-room deals" with Mr Peters.

National have yet to formally reject the proposal. But Mr English has been harsh in his criticism, calling it an unnecessary straitjacket on this and future governments.

Mr English has also raised concerns about the size of the Government's borrowing programme, which he argues could be reduced if the fund did not go ahead.

The Green Party has ruled out supporting the fund concept for similar reasons to those outlined by Mr English.

The committee looking at the Superannuation Bill made its recommendations yesterday. These were mainly technical in nature, although the committee did try to enhance the independence of the fund management.

It also recommended changes relating to how the fund is "ethically invested" and how the Government must consult if it wishes to make changes to the law if passed.

Dr Cullen said he was comfortable with the changes recommended.

A majority of MPs on the committee voted in favour of the bill, saying "it is not a solution to all retirement income policy issues and we do not consider this bill will end debate on the issue."

Government officials confirmed yesterday that the select committee report and amendments did not include any of the proposals to meet Mr Peters' concerns.

The bill is in two parts. The first sets in law the entitlement of people over 65 to paid superannuation at 60 per cent of the average wage for single people and 65 per cent for couples. The second part sets up the fund itself and a governance structure.

The majority report says the proposal "increases certainty for New Zealanders" by restating the Government's obligations and provides a means for meeting those obligations.

The minority report says the fund is "undesirable" as it would "lock New Zealand into a high-tax economy and could, as a result, adversely affect economic growth."

- NZPA