Wealthy can opt out of winter payments, PM says

Prime Minister Jacinda Ardern is defending the universality of the government’s winter payment package by saying people can opt out of it.

Ms Arden said she was “incredibly proud” of the government’s families package announced today, adding it will benefit more than 380,000 families and cost less than National’s tax cuts.

“The way we are doing it is by not giving people like myself a tax cut when we need investments in infrastructure and health and education.”

Alongside increased payments to families, payments for new parents and accommodation supplements, pensioners can get grants during winter to help with electricity payments.

Costing $1.81 billion over four years, the winter energy payment will be available to every New Zealander over 65 who receives superannuation or a veteran’s pension and people who receive a benefit.

When fully implemented, the annual payment will be $450 for single people with no dependent children and $700 for couples or single people with dependent children.

However, living standards research by the Ministry of Business showed sole parents or working parents with dependent children were more likely to put up with feeling cold to pay for essentials.

Ministry research found 4% of people over 65 would put up with feeling cold “a lot” to pay for other things while, in contrast, 30% of beneficiaries with dependent children said they would feel cold a lot so they could provide other essentials.

“The reason is our superannuation system is universal, so we made a deliberate decision that the winter energy payment should be easy to administrate and widely available.

“Many of our superannuants do differ in the winter months because of the cost of power and, if they believe they don’t need it, they can opt out.”

The policy was welcomed by the Electricity Retailers’ Association of New Zealand, which said it will help promote the programme. Chief executive Jenny Cameron says “it will make a real difference to many.”

Ms Ardern was upbeat about the figures released today, saying she was confident despite a tighter operating allowance.  

“We will have to make sure we act in a fiscally prudent manner and we believe we have allowed ourselves room to operate.”

The coalition also announced it would resume contributions to the $37 billion NZ Super Fund. It says it will put $7.7 billion into the NZ Super Fund between now and June 2022, with the first payment to be made on Friday.

The Guardians of New Zealand Superannuation said at the projected peak of withdrawals from the NZ Super Fund in 2078, the fund will be covering 12.8% of the country’s net superannuation bill. The projected tax paid by the fund will equate to a further 8.5% of the superannuation cost.

Chairwoman Catherine Savage said: “We welcome the resumption of contributions to the NZ Super Fund and note the apparent progression toward funding in accordance with the formula in the NZ Superannuation and Retirement Income Act.”

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