Superannuation

Why is National Superannuation such a sacred cow?

It came into being in the 1970s as the biggest election bribe of all time. Prime minister at the time Rob Muldoon was responsible and threw out the self-contributory Superannuation scheme started by Labour prime minister Norman Kirk.

The National scheme began as 80 per cent of the average weekly wage, including the overtime portion.

It has been altered many times and used often as a political football.

It has been 65 per cent of net after tax ordinary time weekly wage, which took out overtime. Jenny Shipley had it on the way down to 60 per cent and the last amendment was to take it to 66 per cent of the net after tax ordinary time weekly wage.

There is pressure to raise the age of eligibility once more. The scheme has been said to be affordable and then unsustainable.

Why is this system the only one to be considered?

What would be wrong with examining and perhaps tweaking the scheme originated by Norman Kirk?

It would take time but so will any other alteration to the present scheme.

It would ensure that everyone contributed to their retirement in- come by having a percentage of their pay go into an account which would be owned solely by the person concerned.

In addition a contribution would be required from employers and that account would not be accessed until actual retirement. This would ensure that New Zealanders became savers and would eventually do away with much of the consolidated funding of National Superannuation. It would free up funding for investment both in New Zealand and overseas.

An example is the Canadian scheme that has so much money to invest it attempted to buy the Auckland airport some years ago.

Too few workers, you say, then how about the 170,000 jobs promised often by the present Government since 2008 when it came into office.

Some arrangement would need to still be made for those unable to work through unavailability of jobs and disability.

These would require a safety net but the cost would not be anywhere as high as the present National Superannuation scheme.

Let us get rid of this tunnel vision and think outside the square.

An employer’s contribution could be capped at a rate to be decided and workers could put aside a percentage of their pay to be decided by them to have superannuation at a rate they decide, according to their living conditions as workers.

I realise this will be contentious but at least it could settle the debate, as the present scheme has been failing miserably for years. LES HOWARD QSM Timaru