…Grey Power has a point…
The Sunday Star-Times journalist who wrote the story on superannuation at the weekend should have looked up the New Zealand Superannuation Act before writing her article. She could have then avoided making the mistakes she made.
Superannuation payments are adjusted in the first quarter of each year for inflation. Under the NZ Superannuation Act the results are then moderated to ensure that, for a married couple both entitled to NZ Super, the inflation adjustment falls between 65 and 72.5% of the net average weekly wage (after tax and ACC premiums). The wage figures are derived from Statistics New Zealand’s Average Ordinary Time Weekly Earnings data series.
The rate for a superannuitant living alone is then set at 65% (not 50% as stated by the Sunday Star-Times) of the amount paid to a couple. A single superannuitant not living alone receives 60% of the couples’ amount.
But we agree with Grey Power that for many superannuitants this is simply not enough. Fuel, electricity and basic food costs have been rising faster than average inflation.
During the 1990s NZ Super for a couple fell from 76.8% to 60% of the net average weekly wage – a poor indictment of the National government during those years. The NZ Superannuation Act came into effect in 2001 and set the lowest possible limit for NZ Super at 65% as explained above. When NZ First agreed to support the current Government, we negotiated the bottom limit to be moved up to 66%.
It’s still not enough. The band allows for NZ Super payments to be set at 72.5% of the net average weekly wage, and this is our eventual target.
This election, one of NZ First’s pledges is to have the lower limit lifted to 68%. And over time, our policy is to see that increase to 72.5% of the net average weekly wage. Combined with the effects of tax cuts, lower GST, rate rebates and significant discounts available through the Super Gold Card we believe this will help make for better times for our country’s seniors.
August 25th, 2008 at 4:05 pm
Good on you Winston,76.8%! seems just a dream that it ever happened.
We should remember that a leopard never changes it’s spots, remember Jim Bolger’s “watch my lips, no ifs no buts, I will remove the extra tax on Super” We all know what happened. I would put money on National having a special no alternative problem to take care of after the election (if they happen to get the most votes)
We trust you to take care of that Winston.
August 25th, 2008 at 7:09 pm
I wish to be corrected on this if I am wrong, but for gaining confidence of the elecorate, I do believe it is urgent to articulate the wealth creative economic growth policy to make higher NZ Super + welfare benefits sustainable at reduced taxation rates.
Is not allocation of the NZ Super Fund - accumulated at present at approximately 2% of GNP (Gross National Product) - to Personal Accounts, the most directly personal wealth creative tax rebate possible, more so than if the same amount as a freely consumable tax reduction?
(And don’t forget the taxation revenue expenditure released for other purposes through that, making more goodies increasingly available on a sustainable basis, in direct proportion to Persoanl Accounts growth)