He dismissed Winston Peters’ costings of around $700 million as completely unrealistic saying Treasury had estimated the cost of increasing New Zealand Superannuation to 72.5% of the net average wage at $630 million in the first year, rising to $1.68 billion a year after 10 years.

“Those calculations include the costs of servicing the loans the government would have to take out to meet the increased New Zealand Super bill. They do not include the bigger New Zealand Superannuation Fund contributions a higher pension would require.

“These are estimated at around $3 billion by year 10,” Cullen said.

He said the law currently required that the married rate of super be not less than 65% of the average wage as determined by the last Quarterly Employment Survey of wages published by the Department of Statistics before 1 March in each year.

“The government has honoured that commitment and will continue to honour it. The quarterly adjustments Mr Peters is advocating would not only be costly to administer but would be out of step with wage and salary earners who receive a wage increase only once a year.

“Winston Peters is playing the politics of the small party: promising the moon because he knows he will never be in a position where he can be held to his promises,” Dr Cullen said.

This is a press release from Finance Minister Michael Cullen.