Not a goer

April 27th, 2010 at 12:00 pm by David Farrar

The Herald reports:

A professor has come up with a novel idea to cope with New Zealand’s ageing – pay a higher pension to those who have children.

Professor , the new director of Waikato University’s Population Studies Centre, says the welfare state is “a great pyramid scheme” based on a pyramid-shaped population with only a few old people at the top supported by growing numbers of young people at the bottom.

“Just like a pyramid scheme, you have to have a continuous supply of new people coming in to support the numbers of old people,” she said yesterday. …

She said society would have to give more priority to children to maximise their contribution to the labour force and hence to the tax base that pays for pensions. And it would have to look at linking pensions to producing children.

“The welfare state has to change, and one of the potential things we might look at is limiting pensions to those who have had children,” she said.

Heh, can you imagine trying to pass that one into law. Best response is from :

However, the co-director of Auckland University’s Retirement Policy and Research Centre, Dr Susan St John, said linking pensions to having children “doesn’t bear thinking about”.

“How do men get their pensions? Surely not more based on the number of women they happen to impregnate?”

A fair point!

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40 Responses to “Not a goer”

  1. krazykiwi (9,186 comments) says:

    How about a pension scaled by the amount of personal tax you’ve paid in the 10 years preceeding retirement? I can see philu begging, but that’s a price I’m happy for him to pay.

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  2. cauld (47 comments) says:

    If we want to have a sustainable revenue base then I think it’s less about ensuring that people breed and more about ensuring that the right people breed more. I don’t tink the incentives for that are quite right yet TBH.

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  3. Murray (8,847 comments) says:

    The old isn’t old people who have spent a life time paying tax, its a lot of young people who are spending a life time not paying tax.

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  4. Bevan (3,924 comments) says:

    Someome should ask Prof Jackson if she thinks whether a family with ten kids, but six in jail should be entitled to a larger pension, than a family with two kids who have become doctors or lawyers (OK, maybe not lawyers!).

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  5. mavxp (483 comments) says:

    The problem is that the money that people have been paying in taxes towards their pensions over their lifetimes has been squandered by wasteful governments. It’s all gone. So we need to rely on productive members of society to pay for the current oldies. This will become impossible in only a few short years when the baby-boomers retire and collect their pensions – in fact it has already started with those born in 1945 eligable this year for a pension. The pyramid has become inverted – with not enough productive tax payers contributing to the tax take. Partly this is because of our continued loss of young, productive NZers to Australia and further afield. Joining Australia, as mooted recently is one possible solution.

    The other solution – immigration of young hard working people from asia that have lots of kids. The changing face of NZ.
    The irony is the oldies will be most opposed to this – but it will be the only way to pay for their pensions!

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  6. barry (1,317 comments) says:

    Ummmm – I thought that Working For Families gave tax relief based on the number of children the family has… thus the idea of financial reward based on the number of children is not new in NZ. Similar formulae are used in other forms of tax relief, in the calculation of various benefits, DPB, etc.

    So why would it be strange to use the same base in calculating other benefit calculations. Sounds like a god idea to me – reward for contribution to the economy.

    Ive got 4 children – so Im a fan of Prof Jackson already………………..

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  7. RKBee (1,344 comments) says:

    Just what the world needs more incentives to have even more children.

    I can see in the crystal ball future that just living over 50 will be a death warrant.

    I’m pretty sure hospitals are already handing out the morphine to the elderly a lot earlier then necessary to save costs.

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  8. expat (4,050 comments) says:

    We could always put GST, alcohol, petrol and ACC levies up.

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  9. expat (4,050 comments) says:

    doh! already doing it….. doh! doh! doh!

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  10. JiveKitty (778 comments) says:

    We could always rethink the idea of state pensions completely and try and aim for something which isn’t a Ponzi scheme.

    expat, you win.

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  11. philu (13,393 comments) says:

    and..so..your solutions..?..farrar..?

    or is naysaying yr only role..?

    or..should we keep on ignoring it..?..

    ..’cos’..like not fucking over our environment anymore..

    ..it is going to ‘cost money’..?

    ..eh..?

    and that might mean a few dollars less for you to add to yr pile..each week..eh..?

    and we can’t have that..can we..?..rand-ite..?

    phil(whoar.co.nz)

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  12. expat (4,050 comments) says:

    jivekitty, it seems state pensions are a beast who’s day in the sun is gone.

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  13. lofty (1,310 comments) says:

    Dare I mention “means testing”?? (ducks for cover)

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  14. Kris K (3,570 comments) says:

    I have the solution!
    When people get to retirement age we euthanise them – problem solved.

    And I’m only half joking.
    We will get to the stage, if we’re not there already, of putting a dollar value on an individuals life. Once they become a net burden to society, and of no further benefit, they will simply be removed.
    We’re already starting to see this in the way the elderly are treated by the health system, by their being pushed down operating waiting lists, etc.

    As someone mentioned above; when the babyboomers en masse start retiring where will the funds to support them come from? If we’re already struggling economically with the majority of boomers still employed, where will we be in 15 to 20 years?

    And remember, the last of the boomers were born in 1964, so thus they will ALL be retired by 2029 (assuming 65 as retirement age is kept) – and that’s only 19 years away; scary!

    And this is a problem for all Western nations.

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  15. expat (4,050 comments) says:

    sounds reasonable lofty. I’m sure the investment advisors and lawyers will be happy as well, more advisory work.

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  16. JiveKitty (778 comments) says:

    @lofty: Pensions are an issue that worry me. A quick fix would be to raise the age of eligibility (in a manner, of course, that was probably incremental and signalled intent to do so in order to avoid shocks). The problem here could potentially be that while life-expectancy might be increasing, there may be a question as to whether it is increasing in proportion to continued ability to function well in a job. Of course, this wouldn’t go anywhere near solving the problem – it would might give some breathing space for a rethink though.

    Another partial solution, as you’ve suggested, could be means-testing. The problem here is that means-testing is a blunt instrument. If one only allows means-testing of liquid assets to be done, it incentivises the purchase of non-liquid assets pre-pension age. If one allows means-testing incorporating non-liquid assets, there is a risk that great harm could be done: would it be acceptable, for example, to force an older couple out of their home of fifty years because its value has appreciated greatly over time, and they could convert it to liquidity and live comfortably elsewhere? Regardless, means-testing in any form incentivises evasion, be it through the legal movement of assets into protected trusts or otherwise. It also disincentivises working as hard for profit as possible.

    The government could, of course, get rid of superannuation completely. The problem here is that it is likely to be politically unfeasible in a Western democracy, as it is an ethically dubious decision. Unless, those elderly who are unable to either work to survive or survive off accrued assets, foregone consumption and/or the help of relatives are placed into a benefit system, much like the one long-term sickness beneficiaries are on. This would be a moral quagmire, however, and also likely politically unfeasible. It would probably also incentivise markedly higher birth rates which, in a world with diminishing resources, efficiencies apparently not increasing at a high enough rate and populations wanting to maintain a certain standard of living, is probably not a good thing.

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  17. malcolm (1,952 comments) says:

    The number of children you produce is a poor proxy for the amount of wealth you and them generate. As someone above mentioned we already have a problem in NZ of perverse incentives around offspring – the DPB.

    Phase the state pension out. It’s unsustainable, unfair and allows people to think the government should provide for them. And if they think that, then they vote that and we get that. And it doesn’t work. Not in the long-term anyway.

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  18. RKBee (1,344 comments) says:

    Yeah Yeah.. what ever happened to respecting the olderly for their wisdom and knowledge.. or just respect.

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  19. malcolm (1,952 comments) says:

    We’re already starting to see this in the way the elderly are treated by the health system, by their being pushed down operating waiting lists, etc.

    Isn’t that inevitable if you have a system which must allocate a limited resource by “need”? If you have a heart available, is it better to give this to a 10 year-old or a 90 year-old?

    When people get to retirement age we euthanise them – problem solved.

    Now you’re talking. Oh wait, would that apply to me as well?

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  20. lofty (1,310 comments) says:

    @Jivekitty: The pension issue concerns me as well, I accept and in general concur with your statements above.
    I tend toward your 1st paragraph personally, and raised the isue of “means testing” to provoke discussion.

    While raising the age of eligibilty incrementally will not in itself solve the future issues of money availability, it would, if done wisely buy breathing space to educate the populace of the need to save for ones own retirement while they are able.

    In the meantime, the use of the retirement fund to invest heavily in R&D type industries within NZ, while at the same time investing in income producing stocks, both here and around the world, may be a way to generate enough income to see us through. I dont have a problem with our investment fund making and using overseas generated income, in fact I welcome it.

    I strangely find myself thinking that the abolition of super may in itself not be a bad thing, it would tend to push us into becoming an independant society, rather than a welfare dependant one. The education process across all age groups would then commence. Somewhat Orwellian I know.

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  21. mavxp (483 comments) says:

    RKBee – it is a nice idea – but they live a lot longer now, cost more, are less productive in relative terms over their entire lives (retiring at 60 or 65 usually meant the last 10 years of your life was in retirement, now it is last 20-30 years), and as mentioned there is a lot more old people relative to the rest of the population than there has been historically. I think the noble sentiment of valuing our elders will crumble in the years to come. It may lead to Euthenasia becoming something society will reach for as a solution – I hope it doesnt. Instead I would prefer that the pension age was raised to 70 or even ultimately 75 – restoring the original intent of the state pension to be for the last decade of your life.

    Malcolm – removing the state pension is unthinkable for “fair minded New Zealanders” and is therefore political suicide, its never going to happen. But good point re: wealth creation and children numbers. Perhaps instilling a work ethic and some mindless patriotism into our youth from an early age to increase their productive value and keep them here in NZ will be the most beneficial way forward!

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  22. lofty (1,310 comments) says:

    Of course another solution may lie in the ability of Govt to reduce spending in areas of, shall we say, nonsense.
    There is a lot of utterly wasteful spending done by govt in this country, redirection of income would be relatively easy, if somewhat politically unsavoury.

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  23. malcolm (1,952 comments) says:

    removing the state pension is unthinkable for “fair minded New Zealanders” and is therefore political suicide, its never going to happen.

    You’re probably right, except it can be killed off by neglect. Either deliberately or because the govt lacks the cash to keep it adjusted with inflation. I agree that neither National or Labour would wield the knife. On anything, really. Which is part of the problem.

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  24. Murray (8,847 comments) says:

    “and..so..your solutions..?..farrar..?”

    Well mine is to get you off your lazy drugged up ass off your chair and into doing some bloody work instead of spending 70 years on a fucking pension you idle piece of crap.

    Become a taxpayer instead of a tax consumer.

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  25. Cactus Kate (551 comments) says:

    Completely in favour of this if the reverse applies. Those without children would get credits every year on their tax to pay for their own retirement based on not having children and therefore not using taxpayer funded resources.

    In fact could go the whole hog and keep an account for each person in NZ based on their “net taxpayer/beneficiary” position. Then at 65 if they haven’t contributed then they would not get a pension at all.

    Bevan’s comment is well noted and a reminder that just because you have given birth to a child does not mean it will contribute to society in a net positive fashion.

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  26. philu (13,393 comments) says:

    have you ever addressed the issue..?..there..?..muzza..?

    or has it always been just the ad hominems..eh..?

    but..y’know..!..attacks on me to one side..

    ..what is your solution..?

    ..just to keep yr head jammed firmly up yr arse..?

    ..as you have until now..?

    ..i thought so..

    (cue muffled ad hominem..)

    phil(whoar.co.nz)

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  27. Kris K (3,570 comments) says:

    Malcolm 1:34 pm,

    Isn’t that inevitable if you have a system which must allocate a limited resource by “need”? If you have a heart available, is it better to give this to a 10 year-old or a 90 year-old?

    Exactly my point; that a 10 yo old would be seen as more ‘valuable’ than a 90 yo based on their ability to contribute to society. And hence my whole euthanasia argument.

    But why stop with the elderly?
    If we assume worth based on net contribution to society, then someone on the dole; or sickness benefit; or in prison; or of lesser intelligence; or of lower class; or of a race with inherent health issues or propensity to child abuse or crime, etc., etc., would be viewed as being of lesser value; and therefore ‘expendible’.

    Heck, the precedent is already set with the way we view unwanted pregnancies; surely eliminating those also viewed of ‘lesser value’ would be a simple next step. I really do see this as not a matter of ‘if’, but ‘when’. An aging population will simply force the issue sooner than would otherwise be the case.

    There are already those out there who promote a global population of 500 million – this is just more of the same sort of thinking – the wheels are already turning in this regard.

    [PS I'm not a proponent of such thinking, but just see it as an inevitable 'solution' to the perceived 'problem'.]

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  28. Murray (8,847 comments) says:

    You asked for solutions, I gave you one. that would be a text book example for addressing the issue.

    Yours seems to involve anything EXCEPT you ceasing to be a fucking parasite.

    Cue incoherant whiney assed left wing bitching and moralising from his tax payer funded drug induced logic.

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  29. expat (4,050 comments) says:

    bitch slapped eh phil.

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  30. philu (13,393 comments) says:

    define ‘bitch-slapped’ there..expat..?

    we are discussing an issue of much import..

    ..and all that useless prick can come up with is his usual sole-parent-bashing drivel/dribble..

    ..he is a fucken total idjit..!

    ..a moronic drone from the right..

    phil(whoar.co.nz)

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  31. philu (13,393 comments) says:

    and..hey..!..muzza..!

    ..how about you pluck that working-for-families cinder from yr eye..?..eh..?

    you fucken hypocrite..

    ..and aside from yr mindless droolings..(and promotion of (historically-themed) cross-dressing..

    ..what the fuck have you ever contributed..?

    ..to anything..?

    phil(whoar.co.nz)

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  32. Bevan (3,924 comments) says:

    have you ever addressed the issue..?..there..?..muzza

    Actually, he did – if you got off you lazy arse and worked for a living instead of sucking the public teat, then there would be more (even if a small amount) available to distribute to far more worthy pensioners.

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  33. side show bob (3,660 comments) says:

    I bet this proposal will go down like a shower of shit to those in the Liarbore party. A fair proportion will get to their old age childless. Of course been the progressive MP’s they are they will expect my children and yours to pay their pensions. Many have chosen a “lifestyle” choice that will require the other 90% of us to pay for.

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  34. jcuknz (704 comments) says:

    In view of the population explosion which is threatening homo sapien existance on earth I would have thought a ‘population expert” would have suggested a pension cut for those who had more than one child and a bonus for the childless. But I know Waikato University is a screwball outfit so I’m not suprised at her comment.

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  35. Bob R (1,374 comments) says:

    ***pension cut for those who had more than one child and a bonus for the childless. .***

    The problem is that those likely to remain childless tend to be the most intelligent. The most educated women have the fewest children. This is a problem because intelligence is linked to a number of socio-economic outcomes.

    “A large amount of studies published in the last two decades has shown that cognitive ability
    levels of societies are relevant for the development of positively valued aspects of peoples
    and countries. Following an economic research tradition “human capital” is relevant for
    economic growth and wealth (Hanushek & Kimko, 2000; Lynn & Vanhanen, 2002, 2006; Jones &
    Schneider, 2006; Weede, 2006; Rindermann, 2008a). In addition, cognitive ability of nations has
    a positive impact on political development, in that it helps building up democracy, the rule of
    law and political liberty (Simpson, 1997; Rindermann, 2008b). Intelligence, knowledge and
    the intelligent use of knowledge also have beneficial effects on health, for instance they act as
    a brake on the spread of HIV (Oesterdiekhoff & Rindermann, 2007; Lakhanpal & Ram, 2008;
    Rindermann & Meisenberg, 2009). Finally, cognitive competence is relevant for the
    development of modernity as a societal and especially as a cultural phenomenon consisting of
    education, autonomy, liberty, morality and rationality (Habermas, 1985/1981; Meisenberg,
    2004; Oesterdiekhoff, 2008; Lynn, Harvey & Nyborg, 2009).

    Societies at a higher ability level develop more complex, more evidence-based, more ethical and more rational world views. For some scholars like Georg Oesterdiekhoff (2000) or Michael Hart (2007) intelligence is the
    driving force of history.

    These broad effects at the cross-national data level are backed in different societies by results
    at the individual level for job performance and wealth (Bacharach & Baumeister, 1998; Schmidt
    & Hunter, 2004; Irwing & Lynn, 2006; Rindermann & Thompson, 2009), for tolerance, civic
    political attitudes and participation in elections (Herrnstein & Murray, 1994; Denny & Doyle,
    2008; Deary, Batty & Gale, 2008), for health behavior and health (Goldman & Smith, 2002;
    Gottfredson, 2004), moral judgment (Piaget, 1997/1932; Kohlberg, 1987) and more rational
    world views (Oesterdiekhoff, 2000; Nyborg, 2009).”

    The impact of smart fractions, cognitive ability of politicians and average competence of peoples on social development Rindermann et al, Talent Development & Excellence Vol. 1, No. 1, 2009, 3-25

    http://www.iratde.org/issues/1-2009/tde_issue_1-2009_03_rindermann_et_al.pdf

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  36. Jman (84 comments) says:

    Bob R, these intelligent advanced societies who have so few children then go and do the interminably stupid thing of giving themselves lavish social benefits. When they then find that they don’t have enough kids to support the system, they import less advanced hordes from the 3rd world who have plenty of kids, and thus their society is transformed. The evidence for this happening can be seen all over Europe.

    I actually think the original idea proposed here has some merit. Having kids generally requires huge financial sacrifice. Assuming you’re a normal, decent parent who makes sure their kid is decently raised, the cost in both time and money of raising a child to adulthood is enormous. But if it weren’t for parents willing to do this, there would be no future. People who choose not to have kids get the benefit of far more money and time to spend on themselves. So I do think there is a legitimate question to be asked on whether they are equally deserving of a pension as those who did have kids.

    Perhaps tying ones pension entitlement to how much tax ones kids pays would be the way to go. I can’t think of a better way to incentivise parents to make sure their kids get a good education and stay out of trouble.

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  37. Bob R (1,374 comments) says:

    ***Bob R, these intelligent advanced societies who have so few children then go and do the interminably stupid thing of giving themselves lavish social benefits. When they then find that they don’t have enough kids to support the system, they import less advanced hordes from the 3rd world who have plenty of kids, and thus their society is transformed.***

    This is why skill selection is so important in screening new migrants. The cost of not doing so is seen in California where subsequent generations of migrants from Mexico underachieve academically and are overrepresented in a growing underclass.

    Singapore adopted a policy of paying bonuses to college graduates to have children. A similar policy should be considered here. Otherwise, over time you end up with an Idiocracy scenario.

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