<&>Wellington Corpus of Spoken New Zealand English Version One <&>Copyright 1998 School of Linguistics & Applied Language Studies <&>Victoria University of Wellington <&>side one <&>13:26 jenny shipley what was the rush what was the rush to have such rapid change in this HUGE area of people's lives it got to the point where it was quite clear for two reasons er the government could not defer these decisions <,> er the first one was that there is clearly a fiscal problem in new zealand that unless it is dealt with er with good speed the new zealand economy as we know it cannot be guaranteed any certainty and so the government took the view that ALL government expenditure including the the social welfare area had to do ITS part in addressing <&>14:00 those problems <.>the the second issue is <.>that that the sustainability of a retirement income is now well documented it's been well documented in the early seventies er the royal commission on social policy did an EXTENSIVE amount of work and predicted very accurately what they believed would occur and also suggested some recommendations given the country's circumstances the prime minister on the nineteenth of december in THAT THAT announcement foreshadowed that it was quite obvious there WOULD need to be changes and he said that the government would come out with a fair affordable and sustainable policy that's what the country saw in the budget why couldn't something be built into it to prepare those fifty plus who know <.>h now have a really difficult time preparing for their old age well there are guarantees er kathryn that it's important to remember that er everybody is caught in this thing those people who are <&>15:00 currently there we are asking something of them certainly those in their fifties will feel that er the rules have been changed quite dramatically and <.>i but remember that there will always be benefit systems as the age graduates from sixty to sixty five so that nobody will be left with nothing the safety net is there but you ARE correct to say that their <.>life their working life and their ability to save substantial amounts of money er is now limited but i think perhaps <.>the the real answer to that question is that we have for a long long time pretended that we could guarantee those folk something er that was unrealistic you make the point that it's a benefit system it's not a pension system any more shouldn't we be thinking more about pension schemes that people can contribute to and have some control over well i i think there is a distinct difference between what new zealand has got and pension schemes new zealanders have not bought their <&>16:00 superannuation system while i know <.>m a great number of people feel that they have paid their taxes and their superannuation payments are theirs as of right new zealand's system has always been a pay as you go and the fact is that the one in six in the pound which was supposed to cover retirement income AND social services that is health services and other services has NEVER achieved covering that amount of money er and i think it's important that we do accept that but there <.>i <.>th a a proper contributory scheme in terms of pensions where you conTRACT to purchase something is quite different from what new zealand's currently got we currently have a benefit system well we've called it a retirement income and voc on a point of semantics i think we've always argued <,> that it is not a benefit and it's important again to remember that er <.>th even the base benefits are still FAR more generous than the than normal benefits that a <&>17:00 person who is unemployed gets paid right now so <.>i <.>i it <.>is a it is a pension with a a different level of payment and greater degrees of certainty but it is going to have to be treated more as a safety net issue rather than a universal right if you were going to change the superannuation system so much why didn't you think about for example bringing in a private superannuation maybe compulsory scheme i think that that is still a matter that's on the table er the the prime minister will be discussing this issue more in the next two or three weeks and i think that there are one or two matters of unfinished business now the issue of how do we encourage those who are not yet retired <.>t <.>t <.>t to make their savings is a very important matter and folk often <,> focus on the issues of incentives but i think that the discussion that needs to be held is a wider discussion than just whether the government puts up an incentive payment to entice people into saving and i think the issue of er voc <&>18:00 what types of savings programs whether the government is involved should they be contractual <&>pronounced as contractrual and <.>contrib <.>contr contributory er are all matters that are worthy of discussion it would be great to have an incentive system but we don't even have a NEUTRAL system at the moment we actually have ACTIVE DISincentives for people to save and prepare <.>th for their future right now well i er i'm not sure that that is true <.>i any abatement rate is a disincentive if you're caught in the abatement period if you discuss that with any person on a an a benefit as THEIR income goes up the government's contribution goes down and if there is a major shift er that the government has introduced in this thinking in relation to retirement income it is i mean you could call it a disincentive quite frankly it is simply a restatement of what is fair given the country's circumstances and <.>the the principle that's being worked upon is that we say that up to a certain <.>of level of payment er we will guarantee you the full pension <&>19:00 and even if you have four thousand one hundred and sixty dollars in addition to that we won't touch the pension level but we believe that if you have income that exCEEDS that for every dollar that your income exceeds that point we will reduce the government's share of its payments by ninety cents you've WIPED out the VALUE of people's HARD earned savings over YEARS well <.>i again i think that there are a number of things that have wiped out the value of their savings inflation has probably killed the value of savings for this group of retirees more than anything else and doctor cullen made the very important point that a stable economy with low inflation and good growth is by far the most conducive environment in which people will be willing to save and where the <.>r the value of their savings can be retained much of what has happened in this budget is this country's best chance at getting to that point and while you can say that there ARE some <&>20:00 effects on those people who are currently retired the government HAD to take the wider view and LOOK this country can't defer decisions that are obvious and essential if we are to in fact guarantee anything in the future there's going to be a committee now to examine savings incentives as part of this what sort of thing are you going to be looking at as i said to you i think that <.>th when you say savings incentives people's minds will immediately spring to the fact of of how much money will WE offer per year for every dollar that someone makes a commitment to i think that you should view the committee's work as beginning from a wider set of parameters than that it may well include that er type of matter for consideration but there ARE members in our caucus that i know wish to discuss a wide range of issues such as contributory <.>scream schemes er i think the second matter is how do we treat different types of investments once <.>they they come out at the other end currently we have a <&>21:00 bias toward what we call private registered superannuation schemes but already this week we have had a number of individuals and people in the industry who believe that it's time that we discussed what sorts of investments er were suitable for treatment voc that we could encourage people to get into so that they knew it would be to their benefit later in life and the committee will be be <.>l focusing on that as well what type of products er should be viewed as registered schemes in the future what problems do you have with private superannuation schemes being part of this whole equation oh i have no problem at all in fact er it is a critical part of people's future planning er young people who are just going into the workforce it is JUST CRITICAL that we convince them that it is in THEIR own best interests to try and start saving right now they are part of the the baby boomers that will hit the wall at two thousand and thirty two thousand and thirty five and there will be double the number of <&>22:00 people er almost who are retired compared with those in the workforce now and it's just essential that they have made some selfprovision because the government knows that there WILL still be a scheme there but it may be of less value than those who are currently retired have got used to the press reports on on your scheme calls it option p five showing that voc you considered a <.>num a range of options what were some of the others oh kathryn no i have quite literally heaps and heaps of paper superannuation is like a jigsaw there <.>are <.>there there were five critical elements as far as i could see there was the issue of the levels of payment in relation to the average weekly wage there was the issue of the age of retirement there was the matter of whether a universal payment should be made at any stage er as an encouragement to save and as a recognition of the fact that costs DO rise in people's later years er and then there was the issue of where <&>23:00 does the government back off as individual's savings increase <.>the <.>they they are the FOUR obvious ones that are part of the the regime and the fifth is the incentive issue of how DO we encourage people to take personal responsibility we juggled those around <.>the the caucus had very strong views on at least two of those <.>they they were quite adamant that they did not want the levels of payment cut er <.>a as we had done with some of the other benefits in april one and so that issue was basically put to one side <.>the the the trade off there was that we would freeze the levels of payment er until nineteen ninety three and then c p i index them equally the surtax issue was an important issue to the the government and the caucus and they believed that having made a promise and also because of the evidence that as people go past their seventieth year their <&>24:00 medical costs and their other costs transportation do increase but it was appropriate er as the royal commission on social policy had recommended that we consider a universal element and so that piece was put in place michael cullen points out that the surcharge problem might have been an EASIER one for you to have done a u turn on than what you've currently done and and more acceptable given that you've broken lots of other promises oh laughs as <.>it <.>i <.>this this piece can never be picked off one by one as i said it is like a jigsaw it HAS to fit together the numbers HAVE to work and you have to <.>be be able to decide what are the messages <,> given that we HAD to make some changes we decided that the changes HAD to take into account not only the present but the longterm people have nibbled at this issue for a little too long and given that we were going to have to make promises the government was of the view that they should get on and try and make decisions that COULD be sustainable in terms of the <&>25:00 fiscal problem but that also that they were robust in terms of the political pressure that they will come under er and the sort of the messages that they send there are DOUBTS about the sustainability raised by <,> this current thing about <,> the gestapo thing er er pensioners now will think of investing in art and real estate in in those sorts of things inland revenue will check up on them and you'll have <.>a the costs of enforcing <,> voc um investigations <.>in into what are people are doing now that doesn't sound like a very sustainable scheme not a very elegantly simple scheme does it well <.>i'm i'm very interested that words like gestapo are suddenly coming into this business of administering government programmes remember that twenty five percent of people were affected by the surtax who are retired thirty five percent of people will be affected by the new programme of course there <.>were there <.>problem there <.>were there er were issues and problems of compliance with the surtax equally <&>26:00 there will be matters of compliance er that will need to be dealt with the new abatement rate there are provisions both within <.>in inland revenue and within the social security act that give the officials that have to administer this er directions as to how they should treat er income and what they should watch for i'm absolutely confident that they can do that without us getting into gestapo tactics <&>26:25