Peters Winston: Questions for Oral Answer — Questions to Ministers 
Peters Winston: Questions for Oral Answer — Questions to Ministers 
[Volume:625;Page:19879] 
7.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Finance 
: What was the percentage of the net average wage used to calculate superannuation payments for married couples in April 2000 and April 2001 and why was it set at this percentage? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 In 2000 the rate was around 67.8 percent of the net average wage delivering an increase of $21.42 a week for a married couple. That reflected the anticipated increase based on raising the floor back to 65 percent before the Government Statistician rebased the net average ordinary-time weekly wage index which could have been used of course to justify a lesser increase. Following the normal annual adjustment the married couple rate rose to 68.3 percent of the average wage in April 2001. 
Rt Hon Winston Peters 
: I ask the Minister of Finance this curiosity: if the rate of New Zealand superannuation was set at 67.8 percent and then 68.5 percent respectively in April 2000 and April 2001 to compensate for the drop in net average wages which Grey Power estimated at the time to cost superannuitants $21 per week why did he then allow the rates to drop back to 65 percent and below as evidenced by this chart I have? 
Hon Dr MICHAEL CULLEN 
: On 27 January 2000 I issued a press statement announcing the changed rates and explained the technicality around the change in the index. I said in that press statement that the rate at which the pension drifted to 65 percent of the average wage would depend on the relative movements of wages and prices over the next few years. For as long as it is over 65 percent it will be adjusted for inflation only but it will never be allowed to sink below 65 percent again in terms of the 1 April figure. 
Rt Hon Winston Peters 
: Why is it OK for the Labour Government to have the rate above 68 percent but grossly wrong for New Zealand First to suggest it in 2006 and what does he mean when he says he put out a press statement to set the new rate at a figure not to go below 65 percent when his colleague Rick Barker has released the actual figures for March 2004 at 64.88 percent and for June 2004 at 64.83 percent; and what on earth is he talking about? 
Hon Dr MICHAEL CULLEN 
: Facts and law. In this particular case it has been pretty much the same since 1976 when New Zealand superannuation was set at 80 percent of the average wage—that was at 1 April before the next adjustment occurred then normally the figure would have drifted below 80 percent and then be restored to 80 percent. That has also been the case with the 65 percent floor. The reason for it being above the floor in the year 2000 I just explained was that we had based the anticipated level of payment on the net average ordinary-time weekly wage index as it was at the time we became the Government. Shortly thereafter the Government Statistician announced a rebasing of the index which could have been used to justify a lower rate of increase. That would have been seen in our view as a betrayal of the promise we gave people at the election only a few short weeks earlier. 
Rt Hon Winston Peters 
: Why is he trying to allow Treasury to be politicised with respect to the figures on these calculations that he released the other day claiming that the total cost would be $1.68 billion 10 years from now; and on what fictional borrowing and drawings figures earnings figures and consumer price index figures was Treasury doing that calculation or what clairvoyant did he use to make that statement to the media? 
Hon Dr MICHAEL CULLEN 
: In this year’s Budget as in every Budget the Government makes certain predictions around the rate of inflation and the rate of wage growth over the coming period—normally set at a 2 percent inflation rate and 3 percent average wage rate over the long term. It is always Treasury practice and I am sure the member may recall from his intimate close detailed involvement in budgetary provisions in 1997 and 1998 that when a major costing item is included in Government spending it is assumed that it will be paid for by additional borrowings so in the long term the cost of additional financing also has to be included. That is the case in the spending proposals in this year’s Budget from the Government. 
Rt Hon Winston Peters 
: Why was 68 percent OK for his Government in 2001 when it was trying to keep its promise but wrong in 2006 when New Zealand First will be back in the administration making sure that the promise is kept? 
Hon Dr MICHAEL CULLEN 
: Because the 68 percent was seen as the level in 2000. As I said in the press statement it was anticipated it would drift back to the floor of 65 percent over time. The member is proposing a new floor of 68 percent rising to a new floor of 72.5 percent. That is over a 10 percent increase in the cost of New Zealand superannuation and throws into question any long-term fiscal forecast. 
Rt Hon Winston Peters 
: I seek leave to table a document setting out the 67 percent and 68 percent rates of 2000 and 2001. 
Document by leave laid on the Table of the House. 
Rt Hon Winston Peters 
: I seek leave to table an answer from Rick Barker in which he sets out that this Government has fallen below 65 percent on a number of occasions. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection.