Labour promises $500m to fund
The ‘‘Cullen’’ superannuation fund will see an immediate $500 million injection if Labour wins power in September.
The pledge by leader Andrew Little opens the prospect of a post-election mini-Budget to approve the extra payment and to put in place its other urgent plans.
The party will release its ‘‘fiscal plan’’ today outlining its tax and spending plans including some already announced. They include $193m extra over three years for early childhood education.
But detailed policy in some areas, including health, will be released later as the campaign heats up.
Little said the quick resumption of payments to the New Zealand Superannuation Fund - four years before National’s current 2020-21 timetable - would mean Labour would have more than $3.5 billion extra in the fund before National resumed payments.
‘‘The first thing a Labour-led Government will do is resume payments to the super fund, so we can secure its future.’’
He said the value of contributions missed by National since it froze payments in 2008 was $14b.
The fund, set up by former Labour finance minister Sir Michael Cullen to partially pre-fund the future cost of the state pension, was now worth $33b.
But it would have been worth $52.6b if contributions had continued under National, Little said.
‘‘More importantly, we can continue to afford to leave the retirement age 65, unlike National, which has promised to lift the age to 67.’’
In March, Prime Minister Bill English said the age for state superannuation would rise to 67 in gradual steps starting in 20 years.
The changes will be phased in from July 2037 and will not affect anyone born before June 1972. The age would lift to 67 in 2040. At the 2014 election, Labour also planned to increase the retirement age but Little dumped the policy when he became the leader.
Yesterday, Little said the argument to lift the age from 65 ‘‘just doesn’t stack up’’.
‘‘I’m absolutely clear there will be no change.’’
Finance spokesman Grant Robertson said Labour’s fiscal plan would show the party would rebuild the social foundations, that had been undermined by National, and invest responsibly for the long term.
‘‘It is a balance, and as a party that wants to lead government, it is our duty to be able to say to people ‘this is what we are planning and this is how we are going to pay for it’. That perhaps isn’t required of all parties but it is of us.’’
The plan would include budgeted extra revenue from previously announced tax changes including $200m a year from a promised crackdown on foreign companies. It has also pledged to extend to five years the ‘‘bright line test’’ under which investment properties are taxed on capital gains and to shut down the negative gearing tax break that allows losses on investment properties to offset tax on other income.
Labour has signalled some other minor revenue changes, such as a border levy, but any other significant changes would be considered by a post-election tax review.
The party has also freed up $600m a year for extra spending by cancelling National’s Budget tax cut plan. It will also have more to spend because it is planning to reduce government debt more slowly than National.
Robertson said Labour would tweak its plan once Treasury opened the books in the pre-election economic and fiscal update on August 23.
‘‘We are all looking at the numbers. The signs are there that there will be more money in the kitty.’’