New Zealand Superannuation Amendment Bill — Second Reading Instruction to Committee In Committee 
New Zealand Superannuation Amendment Bill — Second Reading Instruction to Committee In Committee 
[Volume:625;Page:20076] 
New Zealand Superannuation Amendment Bill 
Second Reading 
Hon TAITO PHILLIP FIELD (Associate Minister for Social Development and Employment) 
 on behalf of the 
 Minister for Social Development and Employment 
: I move  
That the New Zealand Superannuation Amendment Bill be now read a second time 
. The Social Services Committee has examined the bill and I am pleased that it has recommended that it be passed with a small number of amendments. This bill repeals the Retirement Income Act which was passed in 1993 to give effect to certain provisions in the accord on retirement income policies. The accord also proposed and the Retirement Income Act established the role of a Retirement Commissioner and a requirement for 6-yearly periodic reports on retirement and income policy. 
In recent years several developments have called into question the appropriateness of the Retirement Income Act. The first of these relates to the non-observance of the accord. The accord has fallen into disuse since 1998. Many of the processes established by the accord are no longer followed. In the past accord parties would meet on an irregular basis when there were issues to discuss. There have been no such meetings since early 1998. The accord’s falling into disuse has created some practical issues in terms of the responsible Minister meeting his or her obligations under the Retirement Income Act. For example when appointing the Retirement Commissioner the Minister must have regard to the accord and consult other parties to the accord. 
The second change relates to the enactment of the New Zealand Superannuation Act which provides for the current entitlements to New Zealand superannuation and creates the New Zealand Superannuation Fund. Schedule 4 of the Act allows political parties to indicate support for either or both parts of the Act. That provides a new opportunity for political parties to indicate their support for retirement income policies and supersedes the need for the accord. I note that the select committee considers that those provisions are satisfactory. 
The third change relates to the questioning of the continued need for 6-yearly periodic reviews. The most recent periodic report was completed by the Periodic Report Group 2003. It recommended the establishment of an ongoing work programme to replace the 6-yearly periodic reviews. The group considered that 6-yearly periodic reviews were too infrequent to inform retirement income policy adequately. The group also recommended that the Retirement Commissioner undertake a review in 2007. Submitters expressed some concerns about the removal of 6-yearly reviews of retirement income although there was agreement that 6-yearly reviews are too infrequent. 
In response to the Periodic Report Group 2003 the Government acknowledged the value of retaining independent reviews in addition to an ongoing work programme and agreed that the Retirement Commissioner be required to undertake a review of retirement income policies by the end of 2007 and thereafter at 3-yearly intervals. 
I am pleased the Social Services Committee supports those 3-yearly reviews by the Retirement Commissioner and recommends the necessary changes to the bill. Those changes address the concerns raised by some submitters about the earlier omissions in the bill concerning the requirement for regular independent reviews. As a consequence of the changes that I have outlined the bill repeals the Retirement Income Act. The provisions relating to the Retirement Commissioner are transferred to the New Zealand Superannuation Act. Any reference to the accord will not be transferred. 
The committee also recommended that the name of the bill be changed to the New Zealand Superannuation and Retirement Income Amendment Bill. The committee considered that that name better reflects the overall purpose of the bill with the inclusion of the Retirement Commissioner’s functions. The Retirement Commissioner supports that change. The Government also supports the Act being renamed the New Zealand Superannuation and Retirement Income Act as a reflection of the broadened overall purpose of the Act and has circulated a Supplementary Order Paper—to rename the Act—for consideration in the Committee of the whole House. 
The bill as introduced and reported back contains a number of provisions relating to the Government’s Crown entities framework that were similar to those included in the Public Finance (State Sector Management) Bill subsequently passed as the Crown Entities Bill. That was because it was unclear which bill would be passed first. Now that the Crown Entities Act has come into force it is necessary to amend the bill by omitting those provisions relating to the functions powers and appointment of the Retirement Commissioner that are unnecessary because they are covered by the standard provisions in the Crown Entities Act. Provisions currently in the bill—such as those covering appointments the Minister’s role the powers immunities and privileges enjoyed by the Retirement Commissioner—are now all provided for in the Crown Entities Act and would be duplicated if they remained in the bill. The amendments needed as a consequence of the passing of the Crown Entities Act are also included in the Supplementary Order Paper. 
The amendments in the bill will ensure that the retirement income policy framework more closely reflects the current environment. It will allow for a more flexible and responsible environment for retirement income policies. The bill will also consolidate key retirement income policies under the one Act—namely the newly named New Zealand Superannuation and Retirement Act. I commend this bill to the House. 
KATHERINE RICH (National) 
: 
 As I rise on behalf of the National Party to speak to this bill I can report that the National Party will be supporting it. This bill repeals the Retirement Income Act and transfers the provisions covering the functions and the powers of the Retirement Commissioner to the New Zealand Superannuation Act. The bill is generally a non-controversial bill. In my view it was handled well by the Social Services Committee. We did not have very many submissions on the bill but the ones we did have were very detailed and provided very important advice for our committee as we considered the bill. 
Superannuation is a very important issue to discuss. Every member of this House knows that the ageing population is a growing issue for New Zealand. We need to prepare our country and to make sure that we provide for those elderly New Zealanders who are living for longer and longer periods. 
This bill is in fact part of the framework for preparing for the retirement of each and every member of this House. That is why superannuation is a very important issue for all of us. 
This bill in terms of what it is trying to achieve has some pretty straightforward goals such as moving the functions and the powers of the Retirement Commissioner to another Act. If there is a controversial part to the bill it would be that it gets rid of the accord on retirement income policies which was part of the Retirement Income Act. Getting rid of that accord represents a sad day for Parliament because it was an attempt to bring cross-party support to the superannuation issue and it was a starting point for all parties to have some agreement on superannuation. 
If we have seen a change in the way in which the superannuation debate has run over the last few years I would say the reason is that the present Minister of Finance has decided that cross-party support is not important to superannuation. He is just going to bowl on and put in place his particular agenda and take no account of what the rest of New Zealand thinks. One of the most important things in this bill is that the reviews of retirement income policy shift from being a 6-year time frame to being a 3-year time frame and I think that is quite important as long as the inquiry and evaluation of superannuation policies remain independent. 
One of the National Party’s further reservations about this bill is that the Minister has greater control to set the terms of reference of that inquiry. If a Minister does not want to have a fully independent inquiry into retirement policy then there is an opportunity to start to meddle with those terms of reference. So I hope Government members can confirm that that is not their intention that that will not be the case and that the Minister in charge will make sure that the independence for that particular inquiry remains unquestionable. It is a shame that we could not keep part of the accord—or at least the intention to work together in a cross-party way—within this bill but it is probably for political reasons that the Government has decided to move the accord or any discussion of an accord off the statute altogether. 
One issue that we did discuss at the Social Services Committee was the status of the Retirement Commissioner and whether he or she should be an Officer of Parliament. There was robust debate about this but the advice we received and the information we collected during our consideration indicated that being an Officer of Parliament was not the correct status for a Retirement Commissioner. In fact we asked the Retirement Commissioner some questions on this point and there was some agreement there as well. We totally understand that not only does a Retirement Commissioner have to be independent the public has to perceive the role as being independent as well. However being an Officer of Parliament is not the only way of doing that or creating that perception. So I think we can work towards greater independence—and the perception of that independence—without having to change the status. We should reserve the role or the status of being an Officer of Parliament for very specific situations only and this is not one of those. 
As I mentioned we are also looking at the number of reviews that will be done. It is good that we are increasing the regularity of reviews of retirement income policy. It is important to have an outsider—or someone who has a mountain top view of the superannuation issue—to be able to have a look at a Government’s retirement policy and to be able to make statements about it. But I hope that the Retirement Commissioner will always give full and frank advice and give full and frank commentary about a particular Government’s superannuation and retirement policy because if he or she does not the role will be pretty pointless. 
If there is no independent view of the way a Government is preparing for the ageing population then all we have is a political puppet who is there just to say what the Government would like him or her to say. 
There was also a bit of debate about changing the name of the bill. I did not think that that was a particular issue. I think the bill is well named. It does concern superannuation and most New Zealanders would understand that any discussion of superannuation is about retirement and about preparing our country to make sure that we provide for New Zealanders as we get older. The bill is quite straightforward. It is not a bill about which there is huge controversy although I have raised some reservations on behalf of the National Party. It will have our support through all stages. 
BILL GUDGEON (NZ First) 
: 
 To be in Opposition also means to act responsibly. New Zealand First is here for the future and all facets of governing and if New Zealand First’s contribution by policy making can enhance a more positive lifestyle for all citizens we stand to be heard. New Zealand First supports the bill. 
One could say that one of the reasons New Zealand First was born was the deception dealt to elderly New Zealanders in the late 1980s and in the 1990s. We are referring of course to the superannuation surtax and the actual level of superannuation payments. In 1984 Labour’s election manifesto promised no change to superannuation but 1 year later in April 1985 Labour imposed its superannuation surtax which affected three-quarters of all superannuitants. In 1989 Labour announced that the retirement age would be put up to 65 and in 1991 National sped up that process. That was the same party whose leader at the time Mr Bolger had campaigned on a promise to scrap the surcharge—“no ifs no buts no maybes”—then National’s “mother of all Budgets” in 1991 increased the surtax. 
In April 1998 New Zealand First abolished the surtax. During that brief time in Government New Zealand First also fought off Mrs Shipley’s determined bid to slash superannuation introduced the compulsory superannuation debate provided an extra $252 million for elective surgery funded 32000 more operations provided free influenza vaccines for the elderly and budgeted for the removal of income and asset testing for elderly care. 
The whole issue comes down to whether we value our senior citizens or whether we see them as a group set apart from the rest of the community. New Zealand First’s stance towards the elderly is straightforward. The elderly are us—an integral part of us. They are the soul of the country. One crucial point needs to be borne in mind. The real impact of an ageing population has yet to set in. 
When we look at where Government policy is in relation to the elderly the omens are not good. The Government is already penny-pinching in areas that affect some of the most vulnerable elderly. In the elderly care sector right now the talk is of crisis. Over the past 6 months the closure of some 17 residential care facilities for the elderly has been announced. A few years ago the consulting firm Price Waterhouse did a major study of Government funding for elderly care and found a fundamental shortfall of funding levels of around 20 percent. That chronic underfunding is still to be addressed. However at some point in many lives independent living ceases to be a feasible option. People then need quality residential or hospital care. That is the real test of how we value the elderly. And what do we see? The infrastructure to provide care for the elderly is collapsing. 
New Zealand First however is committed to providing a better future for senior citizens. Governments cannot protect citizens from all the circumstances and vicissitudes of life. Illness accidents and misfortunes happen. But there are some things that the State can provide such as a basic income to allow people to live in dignity and comfort. With these words New Zealand First supports this bill. Hopefully we will look to take care of our elderly with more care and love. 
When we look at the people who have attended the political rallies that have been held recently we see that they are concerned and a big number of people in that area will be voting because of their maturity and their understanding of politics and because of what they have done for the nation. Many of them have not forgotten the hard times they were brought up in regarding the farms they had to break in their concerns about how they would take care of their children and their education and also their defence of our country. So we really need to take care of our people. If there is a time when we really need to do that it is now. 
I understand that the election will be held shortly. As far as New Zealand First is concerned we will be doing our very very best to cater for and take care of the needs of our elderly. 
DEBORAH CODDINGTON (ACT) 
: 
 I rise on behalf of the ACT party for the second reading debate of the New Zealand Superannuation Amendment Bill. I agree with the other speakers who said we have to have informed debate and take care of the retired people in our community. It is interesting that the last speaker Bill Gudgeon said that his party intends to act in a responsible manner as far as this issue is concerned because in the last week or so the leader of New Zealand First has made outrageous and extravagant promises to increase retirement income that have been shown by Treasury not to be sustainable. 
One of the biggest problems we have with superannuation in this country is that for 20 years or probably more now big-spending Governments have at election time come out with vote-buying promises—Sir Robert Muldoon did it—for retired people. It is very easy to stand up in front of a Grey Power audience—they pack halls they are very demanding; they are a big voting public—and make promises that are impossible to keep or if they are kept drive the country further down the road to bankruptcy. I hope that the member for New Zealand First was correct when he said that his party will act in a responsible manner. 
I am pleased that the Social Services Committee has agreed to keep the reviews every 3 years—it was 6-yearly; it is now down to 3-yearly. Those reviews are very important because they give people the chance to have their say. If we are going to continue to have informed debate on superannuation in this country—the sustainability of it how much people are saving the need for more saving and whether people are saving—then we have to have those reviews so that we can have input from all sectors of the community. When we talk about retirement income it is very easy if one is trying to buy votes from the public to think about it just in relation to those people who are already retired. We have to remember that the people who are currently working are paying for those people and trying to save for their own retirement as well. This is where we have a huge problem in New Zealand. It is all very well to say that retirement income is 65 percent of the average wage but what use is that if the average wage drops and drops? Sixty-five percent of the average US wage is pretty good whereas 65 percent of the average Fijian wage is probably not very good and does not give retired people a good standard of living. 
The only way we can ensure that retired people continue to have a good income if we stick to 65 percent of the average wage is to make sure that we have a strong economy. One way we can do that is to stop taxing people especially middle-income earners so much. Research that just came out this week from Sinclair Davidson of the Royal Melbourne Institute of Technology shows that New Zealand is indeed a highly taxed country. It is a myth that we are not highly taxed compared with other OECD countries. All the comparisons done to date that have given rise to that myth average it all out and do not take into account things like age population GDP etc. If we take all those issues into account we find that we are highly taxed. 
There are some damning features of that research. One is that in New Zealand 40 to 60 percent of households currently get more in Government benefits than they pay in tax. That is a very high number. That means that there is a huge amount of middle-income churning. People are paying in tax for things that they get back from the Government. Those people both in terms of financial sanity and also in terms of treating them like adults not children should be allowed to keep their money so that they can do with it what they choose. 
At the moment it is easy for very high income earners to save for their retirement. In respect of very low income earners no one would disagree that we need to provide for people at the bottom end of the heap who cannot provide for themselves. But in the middle we have that huge churning of people who are so highly taxed that they cannot save for their retirement. They are sending their children to tertiary education trying to pay off their mortgage or paying for petrol for their cars—all things that the Government is making harder and harder for them. Despite what the Government says the more it spends—and this is a big-spending Government—the more interest rates go up and the harder it is for people to get by. 
During this election year we will see superannuation get booted around again like a political football. New Zealand First has promised a $500 rebate on rates for retired people. United Future has said that GST on rates should be removed because it is a tax on a tax. It is not a tax on a tax. If we remove GST on rates that will allow local authorities to do away with more and more services—the very reason why authorities are there and why people pay their rates. People pay their rates so they can have a library footpaths lighting parks sewerage and all those sorts of things. They do not pay rates so that local authorities can build palaces and monuments to themselves or so that monuments can be named after a mayor when he or she is replaced. We should not remove GST. It is a goods and services tax. It is a tax we pay on goods and services and local authorities should be providing goods and services not just taxing. Taking GST off rates would give licence to all those local authorities to slip further and further away from their responsibility to provide services. 
 The other interesting thing I would like to point out is that I agree with the Greens’ minority report. In their report the Greens stated that the Retirement Commissioner should be entirely independent and should not be appointed by the Minister. The commissioner should not be an extension of the executive. I presume the Greens will be introducing an amendment to cover that; they have not said. The Greens stated in their minority report that the Retirement Commissioner should be an independent Crown entity in order to give the public the confidence it needs in the level of independence—for the very reason that superannuation should not be a political football. 
When the Retirement Commissioner is appointed by the Minister and is an extension of the executive we will have the Retirement Commissioner reporting back saying what the Government likes to hear. A good example is the recent report from the New Zealand Institute which was set up by David Skilling. We saw in the John Tamihere interview in  
Investigate 
 that the Government set up as a counter to the Business Roundtable the Business Council for Sustainable Development. We do not know for sure but it has been said that the New Zealand Institute was a similar exercise by the Government. What was the first report that came out from the New Zealand Institute? It came out with a Roger Douglas policy—a complicated compulsory savings scheme where every child would get something like $1500 and interest would be added. It is interesting that the Government has gone very silent on this. The report has been—[ 
Interruption 
] No it is the New Zealand Institute and David Skilling who is ex-Treasury. The Government has gone very silent on that and the report has sunk without a trace. 
Gordon Copeland 
: Good guy. 
DEBORAH CODDINGTON 
: Gordon Copeland says that he is a good guy. This is the same party that is bringing in property rights but then they do not believe in property rights when it comes to other people’s money. Go figure! 
ROD DONALD (Co-Leader—Green) 
: 
 I would like to confirm the Green Party’s support for the New Zealand Superannuation Amendment Bill. I thank my colleague Deborah Coddington for highlighting the Greens’ minority report that has been included in the commentary on the bill. Although we support this bill in a general sense we still have some specific concerns about its contents and we still have major concerns about the legislation that it will be incorporated into. 
I will address the minority report first. It is our contention that the Retirement Commissioner should be an independent Crown entity rather than an autonomous Crown entity. Our reason is simply that retirement income as Deborah Coddington said and I acknowledge the point she made should not be a political football and that therefore the commissioner needs to have as much independence as possible in carrying out his or her functions. Making the commissioner an autonomous Crown entity may sound nice but it still means that the commissioner must have regard to Government policy. That constrains the commissioner in his or her broader functions. I wish that the Government had accepted our proposal on that matter and indeed had listened to the commissioner herself. She was very clear during the hearings that it would be her preference to be an independent Crown entity rather than an autonomous Crown entity. 
Unfortunately it is outside the scope of the bill to make that change because section 82(3) in new Part 4 inserted by clause 6 states that the commissioner is a Crown entity for the purposes of the Public Finance Act. That means that it is not within the scope of this bill to determine what type of Crown entity the commissioner should be. But we make the point and we hope that it will be noted in the future. 
We also make the point that the name of the principal Act is now inappropriate and should be changed. We are pleased to see that although the Government has not gone as far as the unanimous select committee recommendation the principal Act will be renamed the New Zealand Superannuation and Retirement Income Act. It is pleasing to see that the Minister has introduced a Supplementary Order Paper to acknowledge that retirement income should now become part of the principal Act. 
The other major concession of course is that having taken out the periodic reviews from the bill for reasons that are unfathomable given that the periodic review group recommended that the reviews should be more frequent than 6-yearly not abolished altogether it is pleasing to see that the bill as reported back now provides for a 3-yearly reporting process. That is important. The reason for that importance was highlighted by the Retirement Commissioner herself in her submission. She highlighted the fact that a lot of things can change over a 6-year period. A 3-year period would be a much more appropriate time frame in which to carry out the sorts of reviews that are needed and there needs to be a college of experts representatives of employers’ unions and the finance industry and officials who contribute to retirement income policies by monitoring the effect of the existing policies and recommending changes to them. It is good to see that there is now an explicit requirement for the commissioner to do that and that it is at a level of frequency that I think is appropriate to the changing times. 
Speaking of changing times it is clearly election season because New Zealand First is again exploiting the vulnerability of elderly voters with Winston Peters making promises to the elderly that he would not be able to keep if he did become a member of the next Government. The Green Party position on retirement income is clear. We signed up to Part 1 of the principal Act which is the commitment to superannuation being set at 65 percent of the average ordinary-time net wage for a couple and 60 percent for a single person. We recognise that that level of income is not a feast but neither is it a famine. It is adequate certainly if someone has a freehold home at the point of retirement or is living in State housing or public sector housing. I acknowledge that there are real problems for people who are still renting at that age and that is a challenge we face but it is not one that I think can be solved by increasing the level of superannuation. 
I have to say without wishing to offend any retired people or those who are approaching retirement that a responsible Government has to weigh up many demands on the fiscal purse. One that I want to give high priority to and that the Green Party is strongly committed to is the addressing of child poverty in this country. Without wanting pensioners to go without I certainly do not want to see any young person growing up in poverty. Too many do right now notwithstanding the recently announced Working for Families package which will at best cut child poverty in half. That still leaves us with a very sad indictment hanging over our heads. 
The Green Party is also committed to an overall tax cut on the first $5000 of income. That income would be tax-free as part of a package of introducing a suite of eco-taxes. That would certainly help to increase the amount of money in the pockets of all elderly people—by approximately $15 per week. We are also committed to reducing the cost of living for elderly people through policies such as more public transport that is fast affordable and efficient support for people to install solar water heaters in their homes and to insulate their homes better so that they are more healthy and other environmental initiatives that have good social equity outcomes. 
That is why the Green Party does not support and continues to oppose the New Zealand Superannuation Fund. We believe that the capital the Government is currently investing on the overseas share market through that fund is desperately needed in New Zealand. The fund may now be making a profit and it has recovered some of its early losses but that is still not an excuse for putting our taxes on the foreign sharemarket. That money should be going to the New Zealand economy and society in order to future-proof our economy and invest in productivity in the sorts of projects I was talking about: public transport solar water heating insulation and wind power. 
We also need to be investing more in public health because if we do not tackle that issue now it will be a time bomb we will have to face. Costs will balloon if we do not address issues such as lack of exercise and poor diet. We can already see that with the levels of obesity type 2 diabetes and so forth. 
We also need to invest a lot more in our young people. If we want to be looked after in our old age then our generation of parliamentarians needs to make sure that the young people who will be earning the wealth when we retire are as productive as they can be. That means investing in them while they are studying providing them with a taxpayer-funded tertiary education and not burdening them with massive student loans when they leave university so that they are in a position to raise the money for a deposit on their first home and are not themselves faced with still renting a property when they retire whilst also saying that the level of superannuation is inadequate. 
So the policies of the Greens are very much focused on preventing problems rather than seeking cures for them which is why we did not support Part 2 of the New Zealand Superannuation Act and continue to oppose it. We believe that there is a better way to future-proof our economy and to give the stable future that all New Zealanders deserve in their retirement. 
GORDON COPELAND (United Future) 
: 
 It is perhaps providential that we are discussing the New Zealand Superannuation Amendment Bill in a week when the subject of superannuation is very much on people’s minds and very much within the scope of the media because of the national Grey Power conference in Rotorua. It is a very important subject because currently more than 480000 New Zealanders are recipients of New Zealand superannuation. We also know of course that the demographics of our nation are such that over the next 30 years or so the number of people on superannuation in New Zealand will approximately double to more than 1 million. So by any standards superannuation is a matter of very very serious concern for this Parliament and one that all parties in the House need to continue to bend their minds and their wits to in order to ensure that we have the best possible superannuation arrangements for our elderly people as we move forward—always reminding ourselves that some of us are also approaching the age when we will become recipients of New Zealand superannuation. 
United Future will support the second reading of this bill and its passage through all remaining stages. But I do regret that it marks the formal end of the superannuation accord that was hammered out during the 1990s. Yet it need not be the end because under the New Zealand Superannuation Act there is an ability for each party in this House to sign up formally to a new accord on superannuation. The Minister of Finance Dr Cullen formally reported to the House in 2003 what the positions of the various parties were in relation to signing up formally to Part 1 and Part 2 of that Act. 
I need to explain what “signing up formally” means. The process is that the party actually writes a formal letter to the Minister of Finance in which it states that it supports Part 1 and/or Part 2. When the Minister reported to the House he said that the Labour Party its coalition partner the Progressive Party and the United Future party had signed up to both Part 1 and Part 2. So at that stage we were far from having a new accord supported by all parties in this House which I believe is the goal we should all strive towards. 
In my first reading speech on this bill I challenged the National Party in particular to sign up formally to the new superannuation accord. I really challenged National to put something positive forward to the New Zealand community because at that stage the only slight hint of its policy was from National leader Dr Don Brash. He basically said that National disagreed with the New Zealand Superannuation Fund as defined in Part 2 of the Act and that as far as Part 1 was concerned he was not sure about the fund and had doubts about whether it would be sustainable for people at 65 years of age. So the message from him was that people might have to wait until they were older than 65 before they got New Zealand superannuation. 
I am actually quite pleased that in the months since then the National Party seems to have moved its position—I think very sensibly. John Key has certainly come out now and said quite openly that National does now support the New Zealand Superannuation Fund commonly nicknamed the “Cullen fund”. But I have yet to establish whether National has formally said that to Dr Cullen. I doubt whether it has. I am not and nor are the people of New Zealand aware of whether National has formally signed up to Part 1 in relation to 65 percent of the average weekly wage for married couples at 65 years of age. I note from press reports that Don Brash seems to be signalling that National will go with that so I say that he should take the next step and get National formally signed up. 
As far as New Zealand First is concerned—and its members can speak for themselves—my memory is that it has signed up to Part 1 but not to Part 2. I say to those members during this debate: “How about signing up to the new accord so that we take superannuation off the political football field and give New Zealanders the kind of certainty they need in terms of planning for their retirement?” 
The point we need to emphasise is that until we create some certainty around this issue for people entering retirement in the next 25 years then it is difficult for them to make sensible decisions about their own savings. I for one want to encourage New Zealanders to make private provision for superannuation because let us face it one cannot live very well on New Zealand superannuation. 
The Green Party has just made its position clear. It supports Part 1 of the New Zealand Superannuation Act but not Part 2 namely the “Cullen fund”. The Greens do not support that fund. It is therefore incumbent on them in particular to explain to New Zealanders exactly how they intend to fund future superannuation liabilities. The fact is that superannuation liabilities will increase from about $5 billion a year to in today’s dollar terms more than $10 billion over the next 25 years and any credible political party really has to say how it intends to fund those if it does not support the New Zealand Superannuation Fund. 
I was staggered to hear the remarks from the ACT party member Deborah Coddington in her speech. She said that she also thought that superannuation should stop being a political football. Yet alone amongst all the parties in the House it is the ACT party that has refused to sign up to either Part 1 or Part 2. I want to say to ACT members tonight that it is time to start walking the talk. There is no point in them coming along here participating in a debate and saying they believe that superannuation should no longer be a political football if in their back pocket they not only have the ball but are also intent on running in a different direction from all the other parties in this Parliament. 
United Future has a very positive outlook in terms of New Zealand superannuation. It is our policy that we would change Part 1 of the superannuation accord so that we improved its terms. At the moment when the superannuation rates are struck on 1 April every year they are based on movements in the cost of living and in wages up until the preceding 31 December. So they are always retrospective. Our policy is to make those rates prospective by forecasting them for the applicable year moving forward which would put an extra $10 per week into the pockets of a person on the married couple superannuation rate—that is $10 for each married person which is $20 a week for a married couple—and it would give a single person living alone an extra $13 a week. I am able to say in this debate that that is United Future’s policy and we aim to amend Part 1 to bring about that improvement. It is a technical amendment if you like but it has a significant pay-off for New Zealand superannuitants. 
We also strongly support the idea of savings from the cradle to the grave. It is our policy for people to open a bank account for a baby when it is born and to keep contributions going into that account right through that individual’s life so that he or she can save for tertiary education maybe for a home then finally for superannuation. Deborah Coddington said that David Skilling of the New Zealand Institute picked up that idea from Roger Douglas. I am very surprised to hear that because as far as I am concerned the author of the idea was Bernie Ogilvy my colleague who is sitting right next to me in the House today. It was Bernie Ogilvy who did some creative thinking in our party about that and who came up with that idea. 
We will adopt that as policy so that we add in every way we can to the prospect of as many New Zealanders as possible having the security of a reasonable income in their old age thus allowing them to meet the health costs involved in that stage of life and generally to see out their remaining days in this world with a reasonable degree of comfort. That is my vision for all elderly New Zealanders. 
DAIL JONES (NZ First) 
: 
 I thought I would take just a short call to correct one or two inaccuracies that have come from some members in regard to the New Zealand Superannuation Fund and New Zealand First’s attitude towards it. Deborah Coddington quite correctly made the point that we have to be very careful as to how much we spend in this area and that we do not get to the stage whereby as when I was in the House last time national superannuation was 80 percent of the gross average wage which is a lot more than it is currently. It can be between 65 percent and 72.5 percent of the net average wage. 
What we are talking about today in relation to retirement income is quite different from the situation that existed in the race we had in the 1975 election when both parties Labour and National tried to outdo the other in that area. New Zealand First has said that we would increase it to 68 percent of the net average wage in the adjustment period in April next year. I think Deborah Coddington has been talking about the 72.5 percent figure which is the figure Dr Cullen mentioned when he gave his inaccurate assessment of New Zealand First’s policy. 
Of course when we say 68 percent we are taking the figure that Dr Cullen confirmed in the House in answer to questions from the Rt Hon Winston Peters as being the figure that Labour had in either 2000 or 2001 when retirement income was 68 percent. It has been 68 percent in the last few years. Labour has let it run down to 65 percent. We are suggesting that it be put back up to 68 percent again. We are talking about the 2000-01 figure when Dr Cullen made the point in the House that that is what Labour had it at when it readjusted everything. Of course under Labour the figure has dropped below 65 percent because that is what can happen when we look at things retrospectively rather than prospectively and we understand that that is how that has happened. 
All that New Zealand First is saying is that we want to put it back to the stage it was at in about 2001 when it worked. Of course the rate is anywhere between 65 and 72.5 percent. We do not have to change the law to do it. It is a question of the will of the Government. Clearly the will is there from New Zealand First to do it but nobody else in the House has the will to achieve that end. The amount involved would increase the married couple’s rate by $20 a week and the single rate by $10 a week. 
I touched briefly also on the point raised by someone in this debate on the question of what New Zealand First intends to do for rates. A figure of $500 was mentioned by one of the speakers. Our policy—and I refer to the gold card that New Zealand First will introduce—as far as rates is concerned is that for those whose sole source of income is superannuation they would pay only 65 percent of their rates bill. That is our policy. So $500 might be an extravagant figure it just depends on what the rates are in any particular area. 
Of course people can ask how that will be paid for. First we say that it has been done already and paid for out of funds when the surplus was less in the years 2000 and 2001. We now have a massive surplus but we do not intend to touch the surplus to do this because we recognise as has been indicated in the House that our bureaucracy has exploded since Labour came to office. We have had so much political claptrap forced upon us and so many politically correct claptrap agencies forced upon us as we hear from time to time in the House. Eliminating that claptrap and looking more closely at the bureaucracy will enable us to trim Labour’s fat and redirect some of that spending to our elderly people who deserve a better life in their retirement. Of course as far as we are concerned with regard to the surplus that Labour has we want to see it spent on the police force and on separating traffic officers from the police force but that is another issue. 
I thought I would take a moment to clarify those points in so far as New Zealand First’s superannuation and retirement policy is concerned. We have other things to do with our gold card which will be a smart card. It will cover health areas transport concessions and fire gas and telephone concessions which are all built into our budgeting of $700 million which I have indicated how we will fund. 
Bill read a second time. 
Instruction to Committee 
Hon TAITO PHILLIP FIELD (Associate Minister for Social Development and Employment) 
 on behalf of the  
Minister for Social Development and Employment 
: I move  
That it be an instruction to the Committee of the whole House on the New Zealand Superannuation Amendment Bill that it take the bill part by part. 
Motion agreed to. 
In Committee 
Part 1 Preliminary provisions 
The question was put that the amendments set out on Supplementary Order Paper 350 in the name of the Hon Steve Maharey to Part 1 be agreed to. 
Amendments agreed to and Part 1 as amended agreed to. 
Part 2 Amendments to principal Act 
The question was put that the amendments set out on Supplementary Order Paper 350 in the name of the Hon Steve Maharey to Part 2 be agreed to. 
Amendments agreed to and Part 2 as amended agreed to.