Hon Roger Sowry
Minister of Social Services, Work and Income
Super changes will protect finances and increase sustainability
Changes to New Zealand Superannuation announced today will ensure future generations of elderly people will be able to receive state support without reducing payments to today's retired people.
Minister of Social Services, Work and Income Roger Sowry said the Government plans to change the linkage between superannuation and the average wage, while ensuring that retired New Zealanders maintain the same spending power.
These changes are part of the Policies for Progress announced today by Prime Minister Jenny Shipley.
"Once passed this legislation will move the floor below which superannuation cannot fall from 65 percent of the average wage to a minimum level of 60 percent of the average wage. This will not mean any immediate change but will help to ensure the affordability and sustainability of the current scheme over time. No pension or benefit will be cut and the usual inflation-related adjustment will occur each April," Mr Sowry said.
"Superannuitants' purchasing power would remain linked to the CPI which will protect superannuitants' standard of living. It's important to emphasise that these changes will not effect the spending power of superannuitants, who will be able to maintain exactly the same standard of living that they have at the moment."
Mr Sowry said the new 60 percent wage floor is still above the level used by the Australian Government to calculate their superannuation payments.
"In the first year this change will save taxpayers $22 million, but by the year 2008 it will mean savings of $500 million every financial year. These savings will strengthen the economy for future generations," said Mr Sowry.
ENDS
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