English confident of agreement on Aussie super funds

Photo / Kenny Rodger

SYDNEY - Finance Minister Bill English is confident of reaching a deal tomorrow that will encourage New Zealanders to bring home their Australian superannuation savings.

Mr English meets his Australian counterpart Wayne Swan for talks in Brisbane, with superannuation portability high on the agenda.

Australia's Tax Office estimates it has A$13 billion ($16.14 billion) in superannuation savings built up by workers who have left the country - most of whom are thought to be New Zealanders.

"We're fairly confident of getting agreement. It's quite an important issue given the large number of Kiwis that come to Australia," Mr English told reporters.

"Over the last 20 years while the compulsory super has been in place, every Kiwi who's worked here has been contributing. Some would like to take theirs home.

"Equally it makes it easier for us to recruit Australians to New Zealand jobs if they can bring their super with them."

Mr English hoped he and Mr Swan could reach a tax rate "where we could all agree", and where people couldn't exploit the differences between the two countries.

While the BNZ's chief economist Tony Alexander said New Zealanders would be better off leaving their money in Australia until they retire because of the weaker dollar, Mr English hoped to encourage them otherwise.

"That's an economist's view. Of course it's entirely voluntary, and we would want to make sure that New Zealanders who bring their money back are going to get at least as good a return, otherwise they're not going to bring it back."

Mr English addressed the Australian Association of Business Economists in Sydney today, where he spoke about New Zealand's road to recovery from the recession.

He said a strong Australian economy was important to that, and he hoped to encourage more investment from across the Tasman.

He and Mr Swan will continue progress on a single economic market, and on raising the threshold for Australian investment in New Zealand which had been under discussion for several years.

"The objective is to have quite a high threshold before Australian investments are screened. We are keen to see a wider open door for Australian investment, than for investment from other countries," Mr English said.

He said the Government would prefer a weaker New Zealand dollar to stimulate exports, but added that may be "wishful thinking".

"We'd prefer a bit more differentiation in the shorter term because we run the risk with an export sector that's been flat for a number of years, a (New Zealand) dollar that's above its long run average is not going to help us get back on our feet."

He told the meeting he was confident New Zealand could emerge from the recession due to the strength of the banking system and the fact that public finances were under control compared to many other developed countries.

There was also resilience in New Zealanders, who had come through recessions in 1991 and 1998, and were benefiting from the country's open economy over the past 20 years.

Mr English flew to Brisbane tonight. As well as the meeting with Mr Swan, he will give a speech to the Trans-Tasman Business Circle and attend a function with New Zealand and Queensland businesses.

- NZPA