Super fund up to Peters after Greens say no

By VERNON SMALL deputy political editor

The fate of the Government's $600 million superannuation fund rests with Winston Peters after the Greens yesterday dealt it a body blow.

The New Zealand First leader will have discussions with Finance Minister Michael Cullen after the Greens decided to vote against the scheme.

In a swipe at the Greens, Dr Cullen accused them of taking "the easy course" by failing to confront the problems of an ageing population needing certainty about retirement.

But Mr Peters threw the scheme a lifeline, saying he would enter proposed talks with Dr Cullen "positively."

"I would not say the scheme is dead in the water. How can any scheme devised to improve our savings not be better than nothing?" Mr Peters told the Herald.



He has asked officials to examine a way to ensure the cash in the scheme can be converted to individual accounts if a future Government decides to "unbundle" the fund.

New Zealanders would be disappointed if politicians chose to continue to play "silly politics" on the issue, Mr Peters said.

The select committee examining the Superannuation Bill is due to vote on Wednesday.

The Budget has already set aside $600 million this year for the fund, and Labour has said it is happy to campaign on the issue at the 2002 election if it cannot get the scheme through this Parliament.

Dr Cullen's plan involved putting aside up to $2.5 billion a year to finance future superannuation payments. With the Greens out of the picture, the Coalition may need NZ First's votes to proceed.

The Greens had unsuccessfully pushed for the fund to have stricter ethical investment rules and invest most of its cash within New Zealand.

Mr Peters said yesterday that while he had sympathy for the Greens' view on domestic investment, their ethical investment requirements were a recipe for the fund's bankruptcy.

"It's based on a Macrame underpants philosophy," he said.

Explaining the Greens' decision to their annual conference in Nelson yesterday, co-leader Rod Donald said prefunding was unnecessary.

"In our view, 'pay as you go' from general taxation is sustainable."

The Greens would back the first part of the Superannuation Bill, which retains universal superannuation for everyone over 65 paid to couples at 65 per cent of the average wage, but not the second part establishing the fund itself.

Mr Donald said the Greens believed the fund would ensure taxes rose more slowly, but without it taxes would still go up.

The Greens would vote for the Budget, despite its $600 million provision for the fund, but the party would prefer to repay debt and invest in other areas, such as health, education and building an "eco-nation."

"All this fund really does is transfer risk and uncertainty to other parts of Government activity."

It offered security for superannuitants but undermined certainty for the young, unemployed, those on low incomes and the sick.

Putting the money into the hands of private fund managers to invest was "privatisation by stealth."

He said most of the fund, which at its peak would be worth half the nation's total output, would be invested overseas, financing businesses which competed with New Zealand's own ventures.

National deputy leader Bill English praised the Greens' stand.

"The Greens have obviously found the weight of evidence to be against the fund, and their decision will be a wake-up call to churches, unions and community groups who have so far had nothing to say."

Act leader Richard Prebble called on all parties to stop the select committee process examining the Superannuation Bill and hold urgent talks with no conditions. He said Act was willing to modify its position to help reach a consensus.