<I>

  <&>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</&>
  

  <WSC#DGI070:0005:IK>
      jenny shipley what was the rush what was the rush to have such
      rapid change in this HUGE area of people's lives

  <WSC#DGI070:0010:JS>
      it got to the point where it was quite clear for two reasons er
      the government could not defer these decisions <,>

  <WSC#DGI070:0015:JS>
      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

  <WSC#DGI070:0020:JS>
      <.>the</.> the second issue is <.>that</.> that the
      sustainability of a retirement income is now well documented

  <WSC#DGI070:0025:JS>
      it's been well documented in the early seventies

  <WSC#DGI070:0030:JS>
      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

  <WSC#DGI070:0035:JS>
      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

  <WSC#DGI070:0040:JS>
      that's what the country saw in the budget

  <WSC#DGI070:0045:IK>
      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

  <WSC#DGI070:0050:JS>
      well there are guarantees er kathryn that it's important to
      remember that er everybody is caught in this thing

  <WSC#DGI070:0055:JS>
      those people who are <&>15:00</&> currently there we are asking
      something of them

  <WSC#DGI070:0060:JS>
      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

  <WSC#DGI070:0065:JS>
      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

  <WSC#DGI070:0070:IK>
      you make the point that it's a benefit system

  <WSC#DGI070:0075:IK>
      it's not a pension system any more

  <WSC#DGI070:0080:IK>
      shouldn't we be thinking more about pension schemes that people
      can contribute to and have some control over

  <WSC#DGI070:0085:JS>
      well i i think there is a distinct difference between what new
      zealand has got and pension schemes

  <WSC#DGI070:0090:JS>
      new zealanders have not bought their <&>16:00</&> superannuation
      system

  <WSC#DGI070:0095:JS>
      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

  <WSC#DGI070:0100:IK>
      we currently have a benefit system

  <WSC#DGI070:0105:JS>
      well we've called it a retirement income and <O>voc</O> 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

  <WSC#DGI070:0110:IK>
      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

  <WSC#DGI070:0115:JS>
      i think that that is still a matter that's on the table

  <WSC#DGI070:0120:JS>
      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

  <WSC#DGI070:0125:JS>
      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 <O>voc</O> <&>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

  <WSC#DGI070:0130:IK>
      it would be great to have an incentive system but we don't even
      have a NEUTRAL system at the moment

  <WSC#DGI070:0135:IK>
      we actually have ACTIVE DISincentives for people to save and
      prepare <.>th</.> for their future right now

  <WSC#DGI070:0140:JS>
      well i er i'm not sure that that is true

  <WSC#DGI070:0145:JS>
      <.>i</.> any abatement rate is a disincentive if you're caught
      in the abatement period

  <WSC#DGI070:0150:JS>
      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

  <WSC#DGI070:0155:JS>
      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

  <WSC#DGI070:0160:IK>
      you've WIPED out the VALUE of people's HARD earned savings over
      YEARS

  <WSC#DGI070:0165:JS>
      well <.>i</.> again i think that there are a number of things
      that have wiped out the value of their savings

  <WSC#DGI070:0170:JS>
      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

  <WSC#DGI070:0175:JS>
      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

  <WSC#DGI070:0180:IK>
      there's going to be a committee now to examine savings
      incentives as part of this

  <WSC#DGI070:0185:IK>
      what sort of thing are you going to be looking at

  <WSC#DGI070:0190:JS>
      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

  <WSC#DGI070:0195:JS>
      i think that you should view the committee's work as beginning
      from a wider set of parameters than that

  <WSC#DGI070:0200:JS>
      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

  <WSC#DGI070:0205:JS>
      er i think the second matter is how do we treat different types
      of investments once <.>they</.> they come out at the other end

  <WSC#DGI070:0210:JS>
      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 <O>voc</O> 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

  <WSC#DGI070:0215:JS>
      what type of products er should be viewed as registered schemes
      in the future

  <WSC#DGI070:0220:IK>
      what problems do you have with private superannuation schemes
      being part of this whole equation

  <WSC#DGI070:0225:JS>
      oh i have no problem at all

  <WSC#DGI070:0230:JS>
      in fact er it is a critical part of people's future planning

  <WSC#DGI070:0235:JS>
      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

  <WSC#DGI070:0240:JS>
      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

  <WSC#DGI070:0245:IK>
      the press reports on on your scheme calls it option p five
      showing that <O>voc</O> you considered a <.>num</.> a range of
      options

  <WSC#DGI070:0250:IK>
      what were some of the others

  <WSC#DGI070:0255:JS>
      oh kathryn no <drawls>i</drawls> have quite literally heaps and
      heaps of paper

  <WSC#DGI070:0260:JS>
      superannuation is like a jigsaw

  <WSC#DGI070:0265:JS>
      there <.>are</.> <.>there</.> there were five critical elements
      as far as i could see

  <WSC#DGI070:0270:JS>
      there was the issue of the levels of payment in relation to the
      average weekly wage

  <WSC#DGI070:0275:JS>
      there was the issue of the age of retirement

  <WSC#DGI070:0280:JS>
      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

  <WSC#DGI070:0285:JS>
      <.>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

  <WSC#DGI070:0290:JS>
      we juggled those around

  <WSC#DGI070:0295:JS>
      <.>the</.> the caucus had very strong views on at least two of
      those

  <WSC#DGI070:0300:JS>
      <.>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

  <WSC#DGI070:0305:JS>
      <.>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

  <WSC#DGI070:0310:JS>
      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

  <WSC#DGI070:0315:IK>
      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 <quickly>given
      that you've broken lots of other promises</quickly>

  <WSC#DGI070:0320:JS>
      oh <O>laughs</O> as <.>it</.> <.>i</.> <.>this</.> this piece
      can never be picked off one by one

  <WSC#DGI070:0325:JS>
      as i said it is like a jigsaw

  <WSC#DGI070:0330:JS>
      it HAS to fit together

  <WSC#DGI070:0335:JS>
      the numbers HAVE to work and you have to <.>be</.> be able to
      decide what are the messages <,>

  <WSC#DGI070:0340:JS>
      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

  <WSC#DGI070:0345:JS>
      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

  <WSC#DGI070:0350:IK>
      there are DOUBTS about the sustainability raised by <,> this
      current thing about <,> the gestapo thing er er

  <WSC#DGI070:0355:IK>
      pensioners now will think of investing in art and real estate in
      in those sorts of things

  <WSC#DGI070:0360:IK>
      inland revenue will check up on them and you'll have <.>a</.>
      the costs of enforcing <,> <O>voc</O> um investigations <.>in</.>
      into what are people are doing

  <WSC#DGI070:0365:IK>
      now that doesn't sound like a very sustainable scheme not a very
      elegantly simple scheme does it

  <WSC#DGI070:0370:JS>
      well <.>i'm</.> i'm very interested that words like gestapo are
      suddenly coming into this business of administering government
      programmes

  <WSC#DGI070:0375:JS>
      remember that twenty five percent of people were affected by the
      surtax who are retired

  <WSC#DGI070:0380:JS>
      thirty five percent of people will be affected by the new
      programme

  <WSC#DGI070:0385:JS>
      of course there <.>were</.> there <.>problem</.> there <.>were</.>
      there er were issues and problems of compliance with the surtax

  <WSC#DGI070:0390:JS>
      equally <&>26:00</&> there will be matters of compliance er that
      will need to be dealt with the new abatement rate

  <WSC#DGI070:0395:JS>
      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

  <WSC#DGI070:0400:JS>
      i'm absolutely confident that they can do that without us
      getting into gestapo tactics <&>26:25</&>
</I>
