Peters Winston: Questions for Oral Answer — Questions to Ministers 
Peters Winston: Questions for Oral Answer — Questions to Ministers 
[Volume:625;Page:19736] 
3.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Finance 
: What reports if any has he received regarding the level of superannuation payments and does he agree with them? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 At present New Zealand superannuation payments are $393.56 per week for a married couple who both qualify $236.14 for a single person and $255.81 for a single person living alone. I agree with those reports. 
Rt Hon Winston Peters 
: If that is the case why did the Minister put out a statement yesterday on the question of the affordability of New Zealand First’s proposal knowing full well that the equation was calculated on a 68 percent figure not 72.5 and get Treasury again to start lying to the public of this country? 
Hon Dr MICHAEL CULLEN 
: Treasury had already costed for me the proposal that the member actually outlined to the Grey Power annual general meeting—of an aim of arriving at 72.5 percent. But even the more modest attempt to move to 68 percent would have costs of many hundreds of millions of dollars per year including of course the increased contributions that would be required to be made to the New Zealand Superannuation Fund. I think it is absolutely disastrous that in this area the consensus around the level of payment of New Zealand superannuation is now being broken and that we are re-entering some kind of bidding war that New Zealand cannot afford in the long term. 
Hon Peter Dunne 
: Has the Minister seen any reports suggesting that superannuitants are currently being underpaid by as much as $30 per week; if so can he comment on the veracity of those reports? 
Hon Dr MICHAEL CULLEN 
: Those reports I have seen and they are completely untrue. The method of fixing New Zealand superannuation in terms of a wage band was first introduced in 1990 and was reintroduced in a number of different forms in the 1990s although the base was lowered in the National Government’s last year in office. The percentage set has always been set as at 1 April based on the previous annual numbers. That has been the case since 1976 when it was set on an 80 percent gross-gross basis as opposed to now the 65 to 72.5 percent set on a net-net basis. 
Luamanuvao Winnie Laban 
: Has the Minister received any other reports from Treasury on the cost of increasing the level of New Zealand superannuation to 72.5 percent of the net average wage? 
Hon Dr MICHAEL CULLEN 
: Yes. The cost of increasing New Zealand superannuation to 72.5 percent is estimated to be $630 million in the first year rising to $1.68 million a year after 10 years taking account of financing costs. That does not include the cost of additional payments into the New Zealand Superannuation Fund which adds something over another 10 percent to the $2.1 billion at present going in. 
Rt Hon Winston Peters 
: Is the Minister of Finance prepared to admit that New Zealand First proposals talk about a 68 percent regime as at April next year and then for a long-range incremental rise to 72.5 percent; and was not 72.5 percent the figure that he and his colleagues signed up to in September of 1993 under the superannuation accord which we in New Zealand First did not sign up to? Why was it good enough then but not now? 
Hon Dr MICHAEL CULLEN 
: No. What was signed up to in September 1993—as a number of members on both sides of the House will remember—was a wage band of 65 to 72.5 percent. Of course as long as real wages are increasing then the tendency will be to drift to the bottom of that wage band. When real wages decline over an extended period then the movement will be towards the top of the wage band which is why next year we anticipate that New Zealand superannuation will increase by the movement in wages which is higher than the movement in the consumer price index. 
Hon Peter Dunne 
: Notwithstanding the Minister’s answer to my earlier supplementary question will he not concede that the way in which the formula is applied at the moment means that by the end of each financial year superannuitants are approximately $10 per week worse off simply because of the way in which movements have occurred during the year and is he prepared to consider ways in which that loss of income might be alleviated? 
Hon Dr MICHAEL CULLEN 
: The formula in this sense has actually remained basically unchanged since 1976 when it was first introduced—that is the wage reference is based at 1 April. Clearly changes may occur over the subsequent year. These changes are very small now compared with the situation in the late 1970s and early to mid-1980s with inflation rates in excess of 10 percent and even over a 6-month period therefore movements of more than 5 percent in real terms could occur in a downwards direction. These days of course the movement annually is more like in the range of 2 to 2.5 percent. 
Rt Hon Winston Peters 
: Can I ask the Minister of Finance whether he can confirm—yes or no—that he could survive on $255 a week as many of our senior citizens are forced to do; if so can he explain to the thousands of senior citizens living on that amount just how they should pay for the exorbitant power petrol and rate prices which have risen astronomically under this Labour Government and are rising much faster that any consumer price index adjustment this Government has increased superannuation by? How would he do it? 
Hon Dr MICHAEL CULLEN 
: I find it difficult to imagine living on my own without my wife but I can certainly confirm that my 90-year-old mother has been surviving on the single rate of New Zealand superannuation very adequately since my father died in September 1987. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. It will occur to you that we are not aware of the circumstances of the Minister’s mother but we would like to be appraised of his circumstances—as to whether he could live on $255 per week. That was the question and that was the one I want an answer to. 
Hon Dr MICHAEL CULLEN 
: I am happy to confirm that I am sure my 90-year-old mother would be ashamed of me if I said I could not manage on the income that she has been managing on adequately for many many years.