The government has given its strongest hint yet that it will suspend its Super Fund contributions for this year at least.
Finance Minister Bill English said in a speech in Christchurch last night, at the launch of the Deloitte South Island Index, that New Zealand Superannuation entitlements would not be altered, but contributions to the New Zealand Super Fund were a separate issue.
He appeared to be setting the scene for a budget announcement that contributions to the fund would be suspended at least for this year.
Budget surpluses had disappeared, he said, people facing financial stress were suspending their contributions and for the Government to make its full contribution next year would mean borrowing $2 billion to invest in uncertain global financial markets.
"That's why we're considering this issue and that's why the fund's rules allow the Government to vary its contributions to reflect changing fiscal conditions."
Mr English said the fund was established to invest budgeted surpluses to meet future superannuation costs.
"Those budget surpluses have disappeared. The Government will run a deficit this year and will do so for the foreseeable future. That changes the whole picture."
