16 Jul 2009

Doubt expressed over flows of superannuation funds

9:15 am on 16 July 2009

Economist Gareth Morgan questions suggestions that billions of superannuation dollars could flood into the New Zealand economy as a result of a deal with Canberra.

Finance Minister Bill English and Australian Treasurer Wayne Swan are expected to reach agreement on Thursday on portability of retirement savings between New Zealand and Australia.

Australia's Tax Office estimated last year there were about $A13 billion ($NZ16.6 billion) in 'lost accounts' in the Australian superannuation system.

It said a great deal of this money will belong to New Zealanders who have returned home.

If an agreement was reached, New Zealanders who've worked in Australia could eventually repatriate their superannuation contributions into Kiwisaver.

But Dr Morgan says if people shift their money from Australia, they will have to pay more tax, so he does not think they will do it.