The Government is optimistic it will do even better than Australia in terms of boosting superannuation for wage earners, says Finance Minister Bill English.
Questioned yesterday on wage rates and super schemes in light of moves the Australian Government made at the weekend, including a gradual drop in the corporate tax rate from 30 percent to 28 percent, 40 percent tax on big miners' profits and a rise in compulsory employer superannuation contributions to 12 percent, from the current 9 percent by 2019, Mr English said New Zealand had a different economy and objectives.
When asked by Labour's finance spokesman David Cunliffe in Parliament why the Government had taken backward steps with KiwiSaver and cut contributions to the New Zealand Superannuation Fund while Australia was pushing ahead with boosting superannuation for wage earners, Mr English said there was an aim to improve on that.
"We expect to do much better than that," he said. "We expect New Zealand wage earners to have in their hand much sooner than that a bigger increment where they have a choice as to whether they save it in KiwiSaver or save it in some other way."
Meanwhile, the Council of Trade Unions (CTU) said workers would be concerned at labour cost index (LCI) figures released by Statistics New Zealand today which put the annual rate of salary and wage growth, including overtime, in the March quarter at 1.5 percent -- the slowest rise for wage and salary earners in almost a decade.
CTU economist Bill Rosenberg said the Government had a long-term target to catch up with Australia in terms of wages, but the reality was that New Zealand was drifting further behind.
He said the Government needed to focus on investment in decent jobs and policies which lifted wages, such as a higher minimum wage.
Mr Cunliffe said the budget was not likely to do anything to improve the situation in terms of creating jobs or helping struggling families share in an economic recovery.
Labour leader Phil Goff said Mr English had made it clear he wanted wages frozen, while higher earners had been told they would get a tax cut.
"I think what that (LCI figures) tells us is that New Zealanders have had a lower pay increase than for any time since a decade ago, yet their prices will be going up, GST will push prices up further, workers won't be compensated for that."