THE NEW Zealand Government’s plans to establish a multi-billion dollar superannuation fund to help pay for some of the future costs on the state pension have been supported by the International Monetary Fund (IMF).
In a recent report on the New Zealand economy, the IMF said the idea of pre-funding was good.
But despite that international endorsement, three of New Zealand’s major political parties — National, Act and the Greens — oppose the scheme.
The Government finance minister Michael Cullen has welcomed the IMF’s support, however, he is less than enthusiastic about the group’s calls to time limited benefits, cutting the pension and tax home ownership.
Cullen says nothing could persuade the Labour-Alliance coalition that these policies were desirable or would contribute to the improvement of living standards.
“The IMF’s credibility is not assisted by the fact that it tends to apply the same policy template regardless of the country circumstances,” he says.
Currently, the Government is putting NZ$23 million a fortnight aside for the fund. This money is in a cash account run by Treasury’s Debt Management Office.
Cullen is aiming to appoint guardians to run the fund by the end of this month. This group of five to seven people will be responsible for developing the investment mandate and selecting fund managers to manage the scheme.
Cullen hopes the fund will be up and running by the middle of the year.
