Tuesday 7th of November 2006

Saving For Our Future – Better Late Than Never New Zealand First leader Rt Hon Winston Peters says he's pleased that business leaders are finally recognising the need for a compulsory superannuation scheme – something that New Zealand First has long campaigned for. "Like many of New Zealand First's policies, it has taken some time for the general public to appreciate the value and importance of our ideas. Having been an advocate of compulsory savings over many years, I find some irony in the belated recognition for the need for a future savings plan," said Mr Peters. "It was New Zealand First policy in 1996 to set up a compulsory, state administered savings and superannuation scheme to provide a guaranteed retirement fund, as well as investment finance for New Zealand projects. We are the only party uniquely placed in advocating for both compulsory superannuation and tax cuts. "Most New Zealanders do not save enough for their longer term goals. Now people are finally coming to realise that rising local body rates, interest rates, health care and insurance costs have meant that the present saving levels will provide only the bare minimum retirement income and will leave nothing for future investment in business. This is a serious issue for small business and exporters in particular. "Long term saving is critical to the economy because it backs investment which is a key driver of growth and prosperity. Eleven years later it is a relief to see the issue generating support from New Zealand business. The challenge is to turn this support into tangible benefits for our future," concluded Mr Peters. .......... Prominent business leaders are calling on the Government to link compulsory superannuation to tax cuts. The call came at a meeting between 100 senior executives and Government ministers in Wellington yesterday. But Finance Minister Michael Cullen said through a spokesman that compulsory superannuation was "not on the agenda". Chief executives at the business summit told the Government compulsory superannuation was one option to boost the amount of savings available for investment in business. "There was a surprisingly high level of support (for the idea)," said Peter Neilson, chief executive of the New Zealand Business Council for Sustainable Development. "The question was, do we have enough New Zealand- owned savings to invest in companies that might go international?" The Government's flagship KiwiSaver scheme is due to be up and running from next July but the Government says the scheme will be voluntary.#paraThe scheme represents a significant turnaround in Government policy, offering tax breaks on employer contributions. But there is no compulsion on employers to make a contribution. The scheme's attractiveness has been boosted in other ways, by offering first home buyers grants of up to $5000 a person after five years, and a $1000 kick-start. The Government would be unlikely to consider a compulsory scheme unless there was support from business for compulsory employer contributions as well. A 1997 referendum on a proposed compulsory superannuation scheme was heavily defeated. Beca Group Ltd group chief executive Richard Aitken said compulsory employer contributions combined with tax cuts would have his support. "I'm for it." The plan would make more money available for investment in New Zealand, and at the same time make a contribution by helping people save for their retirement. His company already operated a superannuation scheme because it believed in the importance of retirement savings. Another option floated at the summit was for tax changes to attract people with a high net worth from overseas. Other countries offered more attractive tax arrangements, Mr Neilson said. "We've lost some of our major business leaders and high net worth people overseas in recent years to take advantage of those arrangements." The summit identified problems of attracting and retaining talent in a global market, along with the absence of local capital to expand New Zealand businesses internationally as among the main issues facing the economy.