Peters wants option to divide super fund

By VERNON SMALL deputy political editor

The future of the Government's superannuation plan now hinges on the wording of a single clause in the law setting up the fund.

Talks between Finance Minister Michael Cullen and New Zealand First leader Winston Peters will focus on clause 73, dealing with a transition from a single fund to individual accounts.

Dr Cullen said yesterday that the odds still favoured the Government getting the numbers to pass the law this session, although the Greens have rejected the fund.

He said the Government wanted a single fund, not individual accounts as favoured by Mr Peters.

"On the other hand, I accept Mr Peters' position that it's legitimate to preserve, if you like, democratic options for the future. The question is whether we can do that in a way which satisfies Mr Peters and preserves the integrity of the system."

Opposition and Green MPs on the finance and expenditure committee yesterday failed to delay the reporting of the bill back to the House.

As a compromise, the committee is expected to call on the Government to refer any significant changes, including the result of the talks with Mr Peters, back to the committee.

Mr Peters told the Herald he wanted to see a genuine attempt to address the "convertibility issue" because his support had been based on an acceptable provision.

He wants a future Government to have the option of switching to individual accounts.

As drafted, the bill states only that the fund's guardians must report within 24 months if Parliament "resolves that consideration should be given to converting the balance in the fund into retirement accounts for eligible individuals."

Mr Peters has said he intends negotiating positively when he meets Dr Cullen next Thursday, two days after the NZ First caucus meets.

National deputy leader Bill English accused the Government of shutting down debate.

"It now looks as if the chat with Winston Peters will be done behind closed doors with no public scrutiny. This is hardly a recipe for the 100 years of political stability the legislation needs for the fund to work."

Green co-leader Rod Donald said there was ample time for more considerations in the committee because it would be more than a month before the House resumed debating the bill.

Dr Cullen has set aside $600 million in the coming year for the fund and will continue to earmark money even if Parliament does not approve the scheme.

Yesterday, Prime Minister Helen Clark told a crowd of more than 600 at a Grey Power meeting in Mr Peters' Tauranga electorate that the Government would make superannuation "a central issue" in the 2002 election campaign.

The public wanted a long-term plan and certainty, she said.

But Mr Peters said the public did not want an agreement delayed or an election campaign dominated by an issue that could be resolved now.

"Whilst the Alliance and Labour parties may be happy to campaign on this issue if agreement is not reached, New Zealand First believes that agreement between the parties is still preferable to the majority of New Zealanders."

Superannuation was not something most people wanted to see debated all over again, said Mr Peters.

The select committee yesterday also reported back with amendments a bill allowing the Government Superannuation Fund - which pays state pensions - to invest in a diverse international portfolio, removing the requirement to focus on local bonds.