I’ve been looking back through what Labour said when they established the NZ Super Fund in 2000, and it is gold. Their protests about the Government moving to reduce the level of contributions into the fund are hypocrisy of the highest order. Let me quote from Dr Cullen’s Q&A when he launched it:
How will the government pre-fund future New Zealand Superannuation costs if there are insufficient surpluses?
The government will make contributions to the Fund from available surpluses. Where these are insufficient for making the required contribution a reduced contribution would be made.
John Key and Bill English are doing exactly what Michael Cullen said would happen. Not only do we have an insufficient surplus – we have a decade of deficits.
This also shows up those morons who argue the Fund is not funded out of surpluses, but is just like any other competing area of expenditure. In Labour’s own words:
The government will make contributions to the Fund from available surpluses.
What level of surpluses will the government need to run to pre-fund future NZS costs?
The actual contribution will be determined by the size of available surpluses. Future governments may, however, decide to make contributions at the required rate even when surpluses are less than this rate.
Once again a clear statement that the contributions are determined by the size of the surplus. And while they have indicated that yeah if the surplus drops a wee bit, you might have a slightly higher contribution than the surplus – there is absolutely no suggestion that if you are running a $6 billion deficit you’ll put in a $2 billion contribution.
Labour’s hypocrisy on this could almost enter the Guinness Book of Records.
But wait there is more:
What are the benefits of setting up a fund versus paying off debt?
We are balancing two fiscal priorities in paying down debt and pre-funding superannuation. It is important to keep government debt low and we have set out long-term objectives for debt that will ensure that it remains low. However, we believe we can achieve these debt objectives and smooth the costs of superannuation at the same time.
So the fund was linked to keeping debt low. Debt is now projected to increase by around $80 billion or so. It is set to treble in less than a decade.
Debate is now over.