Rewarding Service

The Government
Superannuation Fund

Civil Servants and Parliamentarians are jointly responsible for the defense and retention of Section 70.

In "Rewarding Service; A History of the Government Superannuation Fund" (University of Otago Press) author Neil Atkinson examines the various stages in the government's employee pension schemes with emphasis on the GSF which had its genesis in 1948. One of the aims of the GSF was to encourage and reward lengthy employment in the public service and allow state employees to "retire with dignity".

Atkinson reminds his readers of the inglorious "Dead of Night" in 1987 (the same year as the decision in the infamous Roe Case) when, on the recommendations of senior civil servants, in 7 minutes MPs on both sides of the House passed massive improvements in the superannuation of MPs and top civil servants.

The scheme was never fully funded; the state legislated to supply the extra money for the pensions of senior civil servants and politicians from general taxation. Concerns about the size of the contingent liability eventually caused the closure of the scheme to new members in 1992.

Atkinson's facts in "Rewarding Service" lead to a disquieting comparison. The superannuation privileges accorded longer-serving civil servants and those who have been in Parliament for several years are government-sponsored and government-administered pensions topped up by the taxpayer.

Most overseas pensions subject to Section 70 are no different from the GSF in that both are government sponsored programs. It would be logical therefore - if Section 70 were applied fairly - to deduct GSF pensions from NZ Super entitlements. It is ironic and cynical under the circumstances that GSF pensions are in fact exempted. The only tangible differences between overseas pensions subjected to Section 70 and the GSF is that the latter are both tax-free and topped up by the taxpayer.

It means that those authorities responsible for targeting the pensions of others to diminish the burden to the NZ taxpayer have been feathering their own nests at the expense of the NZ taxpayer.

The GSF currently has 72,000 members, consisting of 48,000 annuitants - but only 24,000 contributors (for more information visit: www.gsfa.govt.nz ). The shortfall between what is contributed and what is paid out costs the NZ taxpayer around one billion dollars a year.

The burden to the taxpayer is partly reduced however by the $185 million a year taken away from the elderly through Section 70. To date, no minister has been able to deny that revenue appropriated under Section 70 is then used (whether directly or indirectly) to "top-up" the pensions of GSF members.

In light of the above, consider the hypocrisy in the following statement by former Minister for Senior Citizens Hon Ruth Dyson explaining the government's official position on the abatement of overseas pensions:

"The general principle behind this legislation is that if someone is entitled to an overseas pension they must apply for this pension in order to diminish the cost of their NZ benefit or pension. This is of advantage to the NZ taxpayers as our scheme is taxpayer funded, unlike many overseas schemes which are based on voluntary or compulsory contributions."

"BUT IT IS MY RIGHT!"

One of the many authorities to benefit from the 1987 "Dead of Night" is former Speaker of the House, Rt Hon Jonathan Hunt. Mr Hunt had been fully informed as to the many injustices in the payment of NZ Super but chose to side with his colleagues and say nothing or do nothing to address these injustices. When asked if it was appropriate to be accepting NZ Super payments in addition to his handsome parliamentary salary, Mr Hunt was outraged: "But it is my right!"

In 2005 the Prime Minister rewarded Mr Hunt for his many years in the Labour Party by appointing him our highest ranking diplomat in Europe, the New Zealand High Commissioner to London. On taking up his new post overseas, Mr Hunt lost his right to NZ Super.

In spite of his loss, Mr Hunt not only had the use of a rent-free magnificent London home courtesy of the NZ taxpayer but also a 6 figure salary and a parliamentary pension of $77,000 per annum. Nevertheless, the new High Commissioner to London, claiming that it was his right, had the audacity to ask the British Government to pay him the British pension to compensate for the loss of his NZ Super! The comic aspects of the High Commissioner's request were not lost on the international media.

Mr Hunt's behavior typifies the lack of interest in NZ Super injustices by authorities in New Zealand - until the loss of pension rights and privileges affects them personally. Subsequent media attention on the privileges enjoyed by long-serving politicians - including luxury vacations overseas funded by the taxpayer - shows the current incumbents responding just as defensively ("But it is my right!") over what they presume to be their personal rights while similarly distancing themselves from the abused pension rights of so many elderly citizens.