Finance Minister Bill English says superannuitants will not be worse off if Goods and Services Tax (GST) increases because their payments will be adjusted for price increases, but Grey Power does not believe him.Labour leader Phil Goff said in notes for a
Finance Minister Bill English says superannuitants will not be worse off if Goods and Services Tax (GST) increases because their payments will be adjusted for price increases, but Grey Power does not believe him.
Labour leader Phil Goff said in notes for a speech to Grey Power at its annual conference in Christchurch yesterday that proposals to lift GST to 15 percent and offset that with tax cuts would hit those on super with cost increases across the board.
The Government has promised to lift benefits and super to compensate for the increase, but Mr Goff did not believe that would work.
"The GST hike (to super payments) will disappear from your back pockets in a few short years while the higher prices you are paying won't."
He argued that because super was set at no lower than 66 percent of the net average wage that the compensation would eventually be eroded as prices continued to rise.
Mr English said that was "simply not true".
Superannuation had had an inflation adjustment of around half a percent in seven of the last 10 years, he said.
"So, the GST makes for a bigger inflation adjustment, we've been quite clear that we'll be compensating superannuitants immediately if there is any adjustment in GST and superannuitants benefit from tax cuts.
"Superannuitants get a better deal from lower taxes, because of the way the formula works, and they will be compensated for GST," Mr English told Radio New Zealand.
Grey Power national president Les Howard said those on lower incomes used their whole pay packet to "exist", those on higher incomes used a portion and could get more income through investment.
"So, the lower paid always get hit by GST increases."
Fewer superannuitants now have money left to invest following the collapse of finance companies, he said.
The majority of Grey Power members lived pay-check-to-pay-check, Mr Howard said.
Mr Goff is not the first politician to court Grey Power this week. Mr English turned up at the conference yesterday after Senior Citizens Minister John Carter had angered the lobby group by suggesting it was showing political favouritism to Labour.
New Zealand First leader Winston Peters also urged elderly voters to back his party's return to Parliament.
Mr Peters, who introduced the SuperGold Card and free off-peak travel for pensioners while he was in Parliament, promised he would do even more if his party is given the chance at the 2011 general election.
Mr Peters told Grey Power that superannuitants were not going to be better off under the tax changes in the budget.
