16 Dec 2015

Govt kicks tough super decisions down the road - Robertson

6:23 am on 16 December 2015

The government has pushed out contributions to the New Zealand Superannuation Fund a further three years, prompting accusations of economic irresponsibility.

Caucus run 21/07/15

Grant Robertson is critical of government decisions on super. Photo: RNZ / Alexander Robertson

In the May Budget it said payments to the fund which will help cover the cost of baby boomer retirements would resume in 2020, but now that will not happen until 2023.

Superannuation has been a political hot potato, but neither of the major parties are willing to commit to changing superannuation entitlements.

National stopped payments to the Superannuation Fund in its first term and has made various promises about restarting them, including when the government's books reached surplus or when debt to GDP hit a certain point.

Treasury modelling now shows the government will make a $2.7 billion payment in 2023.

Labour's Grant Robertson said that was just irresponsible.

"Well National's just continuing to kick the super fund can down the road."

He said restarting contributions in 2022/23 meant that the fund would not be able pay for superannuation as was planned from 2030.

Mr Robertson said that just puts pressure on future governments.

"I think that'll end up being the legacy of the National government, that they have kicked the tough decisions further down the road."

The National government may not be contributing to the Super Fund for another eight years, but it is keeping open the option of tax cuts in time for the next election.

There will be $1 billion of new spending for next year's Budget, $2.5bn in 2017, and $1.5bn the year after, but Mr English said that money can be moved around.

"We're not going to go outside the envelope."

"But there are options there - there's a bit of spending pressure in the system."

However at the Council of Trade Unions economist Bill Rosenberg said the government had more pressing demands - the housing situation being one.

"We should be thinking about how we can spend more rather than worrying about fiddling around deficits."

He said it was irresponsible of the government to even be thinking about tax cuts under the circumstances.

Stephen Toplis, head of research for the BNZ, disagreed, saying tax cuts were affordable.

"Oh I think we can certainly afford to go there and I think what you're seeing in this and other fiscal statements is a really strong desire to reduce taxes."

Meanwhile, Mr English has dismissed the Treasury's latest prediction the books will once again be in deficit next year, despite the surplus forecast contained in May budget.

He said it was "just another Treasury forecast" and he believed the books would be back in the black next year.

Regardless, the government will no longer distinguish between deficits and surpluses, unless big numbers were involved he said.