David Cunliffe

Wellington, Aug 25 NZPA - The Labour Party is calling for "bold action" to improve New Zealand's savings rate and says setting up a working group to investigate options won't deliver answers.

Finance Minister Bill English yesterday announced the terms of reference for the group, saying he was giving it a wide brief to consider national savings including government, business and private savings.

He has ruled out a capital gains or land tax and said New Zealand Superannuation isn't up for discussion.

Labour's finance spokesman David Cunliffe said the Government was desperately hoping the working group could help it out of its difficulties.

"National has never been committed to lifting New Zealand's household savings rate," he said last night.

"After two years and two budgets they have gone backwards and this committee looks set to go further back."

Mr Cunliffe said the Government had touted fiscal policy and taxation as areas of importance, but neither would deliver real options to save like bolstering KiwiSaver.

"Having already cut New Zealand Superannuation Fund contributions and gutted KiwiSaver, the terms of reference for the Savings Working Group are now equally disturbing," he said.

"New Zealanders all know `government savings' is code for harsh cuts to essential services, `changes to the tax system' are likely to favour the wealthiest kiwis, and references to `fairness and effectiveness of KiwiSaver' could mean further gutting of this landmark scheme."