Labour shelves Super Fund plans

Labour's Superfund contributions policy is out the door but it's stance on superannuation remains the same.

He has made the announcement at a breakfast speech to the Wellington Employers' Chamber of Commerce.

Those plans were integral to the party's policies up until the last election, but Mr Shearer says they have to be thrifty and can't afford everything they'd like.

In his speech this morning Mr Shearer announced Labour won't restore contributions to the Cullen fund until they're affordable.

"Until we're back in surplus, any new spending will have to be paid out of existing budget provisions, new revenues or by re-prioritising."

However Mr Shearer's sticking to his guns over raising the retirement age to 67, saying the super scheme costs will raise by $100 billion dollars over 30 years, if changes aren't made.

"Just imagine how many zero budgets we'll be looking forward to, if we don't address it today."

Mr Shearer says the current economic climate is difficult and the public had concerns about borrowing for investment.

He says three quarters of Labour's projected borrowing was for the Cullen fund.

"What we needed to do was make sure we had the confidence of New Zealanders, but also we were able to show that we are managing the economy thriftily. That will allow us to move on the other areas of expenditure which are really, really important to our economy."

He says Labour would resume Super Fund contributions when they're affordable - essentially, when the Government's books are back in surplus.

Photo: David Shearer (Getty Images)