Australia’s compulsory superannuation scheme is often held up as an example we should follow.
However, this exchange during Question Time yesterday threw up a little-known fact:
Hon David Parker: Does he accept that Australia’s successful universal workplace savings scheme, introduced a decade after National axed ours, is why Australia owns its banks and ours, and why Australians have higher wages?
Hon BILL ENGLISH: No, but I do know that two of the effects of it in Australia are that Australians have less money invested in businesses than New Zealanders—
Grant Robertson: Rubbish.
Hon BILL ENGLISH: —no, it is true—and its rise in household debt directly parallels its rise in nominal household savings. But if the member believes he wants the Australian system, he should be open with the New Zealand public that he is going to strictly means test national superannuation. There is nowhere in the world that has compulsory superannuation and universal national superannuation.
How many people who urge compulsory superannuation know that nowhere that has it also has a universal scheme?
If superannuation savings can be either compulsory or universal how popular would compulsion be?
Hon David Parker: Will the Minister now admit that National was wrong to vote against KiwiSaver, which it now supports, and to call the Cullen fund, which it now supports, a dog?
Hon BILL ENGLISH: No, but if the member is going to advocate what he calls universal but is actually compulsory superannuation, he needs to explain what impact that will have on New Zealand superannuation. I think those who have been in this Parliament for a while will recognise that we have spent—what—20 years in vigorous discussion over the nature of national superannuation. It ended up universal because that is what the public wanted, and Labour is now advocating the Australian scheme, which involves strict income testing of national superannuation. I invite the member to announce that at the next Grey Power meeting he goes to.
. . . Hon David Parker: Is the Minister able to table any document that he has received that proves the assertion he made in his last answer, which was that the Labour Party is moving to a meansbased superannuation when that, in fact, is not our policy?
Mr SPEAKER: Order! It is quite a different question, but carry on.
Hon BILL ENGLISH: If I could find a coherent, rational, sensible Labour Party document on this matter, I would table it. But I cannot, so I will table the results of the 1975 and 2008 elections, where these issues were litigated.
What we do know is that Labour plans to increase the age of eligibility for superannuation.
It also plans to tax more and spend more which will aggravate inflation which will erode the real value of wages making it more difficult to save and erode the real value of any savings, be they voluntary or compulsory.