The New Zealand Government looks likely to get its proposal to pre-fund the state pension through Parliament, but with support from an unexpected quarter.
Currently the two parties in the governing coalition, Labour and the Alliance, will back the bill, plus they have secured the one vote wield by the United Future party.
However, the Green Party, which supports the Government on supply and demand issues has said it won’t back the part of the bill which enables the Government to establish its multi-billion super fund.
This situation leaves the government one vote short of a majority. The New Zealand First Party, which is led by Winston Peters, is indicating that it will back the bill.
Although there appears to be sufficient support of the pre-funding legislation, not all the backers are happy.
NZ First wants a mechanism in the scheme to enable it to be converted into individual accounts at a later stage.
“Despite misgivings on the Government’s policy we have decided to help the Government set up the fund as soon as possible,” Peters says. “We are confident that the Bill can proceed.”
United First leader Peter Dunne says his party’s “support for the New Zealand Superannuation Bill does not imply satisfaction with all of the Bill’s provisions.”
While support for the pre-funding part of the bill is on a knife edge, there is widespread support for the other part of the legislation which cements the state pension as a universal entitlement set at 65% of the average weekly wage for people aged 65 and over.
The Greens and National support this arrangement. The Greens decided not to support pre-funding as it felt the current ‘pay as you go’ system was sustainable, and there is no need for urgent or radical changes to the current system.
Also they are “extremely concerned that the requirement to pre-fund super would be a straight-jacket on all future Government spending decisions.”
