Superannuation

June 13th, 2012 at 11:00 am by David Farrar

Andrea Vance at Stuff reports:

Labour and the Greens have promised not to attack Prime Minister if he agrees to cross-party talks on the pension age.

Mr Key admitted yesterday that National was isolated over the issue but is standing firm, saying lifting the age is “a very simplistic way of looking at a very complex issue”.

The debate has raged over the last few days with a series of reports questioning the affordability of the current scheme.

It is bullshit that Labour and the Greens would not attack Key if broke his word on . Every second TV ad at the election would show him having said he would resign if he changed the age or level of super.

It is quite correct that future superannuation costs are not affordable without large increases in taxation. But this is not some new revelation. This has been known for over 20 years. Up until 2008 Labour and Greens never showed any interest in reducing the future cost of superannuation. Labour in fact attacked the age going from 60 to 65 and savaged Don Brash when he suggested further changes were necessary.

While Labour and Greens support for increasing the age is welcome, lets make no mistake that the primary motivation is anything except to destroy John Key’s political credibility. Does anyone honestly think that if Key had not made the pledge he made in 2008, that Labour would be pushing for cutting spending on superannuation – when every other policy they have is to increase public spending?

I have previously written in the Herald that I believe the 2008 pledge was wrong, and I regret it was made. However Key must never break his word on this issue – his pledge was too specific, where he said he would resign both as PM and as an MP.

But there does need to be a way forward. However this is a path that should not be rushed. Any changes are likely to be post 2025 or even later. Whether decisions are made in 2015 or 2017 is not going to be greatly material.

The first step that the Government should take is to entrench the current scheme for everyone born before say 1960. Pass legislation saying that nothing short of a super-majority in Parliament can change that scheme. This provides absolute certainty for current retirees and those near retirement. All parties in Parliament would hopefully vote for such legislation.

Then the Government should establish some sort of expert group on retirement savings for post 2025. We need a debate on more than just the age of entitlement. Merely changing the age does not make superannuation sustainable. It helps – but by itself is not enough. Also people may be unaware that Labour’s policy is not to simply increase the age, but to apply a means test to it for those aged 65 and 66 – this could result in minor savings only.

Merely moving the age to 67, will by 2030 make a difference of 0.7% of GDP. With Labour’s mean testing proposal, it is even less than that.  The debate must be about more than just the age.

We need a first principles review of retirement savings – not just public superannuation, but also workplace superannuation such as KiwiSaver and also private savings. Merely changing the retirement age is a knee jerk response which is more about trying to nobble John Key than making superannuation sustainable. We absolutely have to also consider the level at which it is set, the indexing, income or asset testing, fixed sum vs annuity etc. We need to define the minimum income people need in retirement and look at how much should come from public superannuation, from KiwiSaver and/or from private savings.

The current focus for the Government is the short-term fiscal outlook – getting back to surplus. Changes to superannuation after 2025 will not impact that, so I agree there is no need to be trying to resolve the issue today or this year. However as we get close to the hoped for surplus in 2014, this is when the focus should go on the longer term fiscal sustainability.

My wish is that in 2014, National does three things:

  1. Introduce legislation, with cross-party support, to legislatively guarantee the current superannuation scheme for those born before 1960. This doesn’t mean any changes for those born after 1960 – just that those arrangements will not be entrenched like for those born pre 1960. This means that Grey Power can not run a scare campaign that their members could ever be impacted by a future change. Also it would stop the current scheme being made even more unsustainable.
  2. Set up (preferably with cross-party support) a royal commission on retirement savings. This would be tasked with designing a sustainable savings regime for those born after 1960.
  3. Announce that the essentials of the regime proposed by the Royal Commission would go to a referendum in 2017. The public would get to decide whether to stay with the status quo or adopt the new model for those who retire after 2025. No cherry picking of some aspects – it has to be a binary choice.

From a public policy point of view this would be a desirable outcome. Those currently retired and near retirement would have absolute certainty over their retirement income arrangements. A binding referendum on the post 2025 arrangements would also provide certainty and a political consensus for those of us born after 1960.

From a political point of view, I believe this would be achievable without the Prime Minister having been seen to go back on his pledge. Any change will be made by the people, not by the Government. But also by having the referendum in 2017, it is likely Key will have retired by then (hopefully winning a third term, serving the majority of a third term but not necessarily trying to win a fourth term).

National doeesn’t need to take any action today, or even in 2013. But in 2014, I think it will be desirable for it to adopt an approach along the lines outlined above – both because it would be the right thing for the country, but also good for National.

It is important that we do not allow the debate on superannuation to be just about lifting the retirement age to 67. That would provide a false sense of security, and just be kicking the problem to touch for a few more years.

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50 Responses to “Superannuation”

  1. tvb (4,205 comments) says:

    This issue can wait until the costs are better known. That would be well past the end of John Key’s probable term as PM. What is the panic for heavens sake. However if a move was done quite soon to bring the books back into shape then I would support that, say a move to 67 by 2014.

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  2. Pete George (22,839 comments) says:

    I agree that Labour and Greens have been trying to make political hay on this, while also correctly pushing for a cross-party discussion.

    But leaving it until 2015 is far to long to wait before dealing with it (according to me and many others). I’m due to retire in the early 2020s, like many others I’d like to know what to prepare for.

    National doeesn’t need to take any action today, or even in 2013.

    National are committed to a discussion paper with United Future in flexi-super this term. That is a no-lose way for Key to getting the discussion ball rolling.

    Keep up with and add to the discussion: NZ Super Discussion.

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  3. Adolf Fiinkensein (2,795 comments) says:

    David, you don’t need all that time wasting, drone salary paying bullshit.

    Sure, entrench the current scheme as you say in point one but there’s nothing to stop Mr Key moving now to introduce means testing from say, 2017 combined with making Kiwisaver compulsory/more attractive/tax deductible. Thus, every person who goes into Kiwisaver becomes ineligible for NZ super.

    I’d like to see the figures for the cost of NZ super where it is not paid to anyone with assets worth more than say, $700k or income of more than $25k. That’s the system which operates in Australia whose citizens look at NZ and marvel at the incredible stupidity of paying millionaires NZ Super.

    The real issue is not the age, it is the eligibility. The age issue and John Key’s pledge is a sideshow.

    BTW even Transtasman last week misquoted Mr Key. They said “….his pledge there won’t be any change to the superannuation scheme on his watch.” He pledged no such thing.

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  4. KiwiGreg (3,176 comments) says:

    “What is the panic for heavens sake.”

    Look at the numbers. New Zealand looks far more like a Greece than anyone should feel comfortable about. When foreigners stop lending us money to pay for us to live beyond our means it’ll be a little late to start looking for solutions.

    Key is and was wrong. I get that the (failed) strategy was to head off Winston. He could have changed his pledge pre-election and not been any the worse for it. He could change it for the next election. Until people feel they have to look after themselves I suspect NZ’s savings rate will remain unsustainably low.

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  5. Colville (2,081 comments) says:

    So when Key decides the time is right he changes the age for super and quits as PM and MP. By election a couple of months later and he will be reelected by landslide in his electorate and support Nats as a independant. As come back in as a Minister. Simple.

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  6. Pete George (22,839 comments) says:

    So when Key decides the time is right

    The timing of discussing the future of Super shouldn’t depend on when one person decides the time is right for him. Key’s got the time wrong, according to an overwhelming voice of opinion.

    The future of Super is far too important to be delayed on the whims of one political career.

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  7. dime (9,430 comments) says:

    how bout we just start digging more shit out of the ground and keep funding it

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  8. Uplander (46 comments) says:

    Why should we guarantee anything to the over 52′s. What have theses people got over those on the dole, teachers, health professionals, DPB’s. Important to treat them reasonably but within the constraints of financial prudence.
    Bring back Buck and the Surcharge I say.

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  9. s.russell (1,563 comments) says:

    It occurs to me that there is a more insidious logic to Labour’s position than just politics.

    The thing is that it is perfectly possible for Govt to keep paying out Super with current entitlements – but only if other spending is tightly constrained. THAT is Labour’s problem: they know that more tax on “the rich” will yield bugger all revenue and they realise that it would be political suicide to put up the core rate for the middle class. So they want to squeeze the Super bill so they can spend more on other things.

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  10. berend (1,634 comments) says:

    John Key, more concerned that people would attack his “integrity”, but no qualms about borrowing $250 million a week. If that’s a man with a spine, I’m a jellyfish.

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  11. Alan Wilkinson (1,816 comments) says:

    Nobody I’ve seen has looked at how the shift in child-bearing age has affected the workforce age distribution and hence affordability of superannuation. For me, the issue is not that the “baby-boomers” generation is large but that their children’s generation is small or delayed.

    It seems obvious that the affordability of superannuation for the present generation of young workers depends almost entirely on their children who will be the taxpayers funding it – not on the older generations who will be long gone by then.

    So a lot of nonsense is being talked about this.

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  12. Weihana (4,496 comments) says:

    While Labour and Greens support for increasing the age is welcome, lets make no mistake that the primary motivation is anything except to destroy John Key’s political credibility

    Yes, lets not forget that they are still evil buggers and not saintly like politicians on the political right.

    Of course Key’s pledge in the first place wasn’t political… no… nothing the right does is political, it’s all done for sincere and honest reasons that go to the heart of their moral and philosophical outlook on life and their love of this great country of ours. :)

    The first step that the Government should take is to entrench the current scheme for everyone born before say 1960…This provides absolute certainty for current retirees and those near retirement.

    Best not to frighten an important voting demographic.

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  13. rouppe (916 comments) says:

    The first step that the Government should take is to entrench the current scheme for everyone born before say 1960

    Really? I thought that the problem was the baby boomer bulge of entitlements putting too great a strain on a dwindling number of working taxpayers.

    The last of the baby-boom years is 1964. This means that 90% of all baby-boomers will be eligible for current superannuation entitlements. Surely entrenching it for pre-1960 does absolutely nothing for the problem?

    By the time 2044 comes around, those born in 1964 will be 80, in 1954 will be 90 and 1944 100 years old. Quite frankly they will be dead or dying off in droves. This idea that in the next 30 years we’re all suddenly going to start living to 100 is nonsense.

    There is a current baby boom, and current generation kids are expected to die earlier than their parents due to the ‘obesity epidemic’. The peak of babies born during the post-war boom ended in about 1958. They’ll be 80 and dying in 2038 – that’s only 25 years away. The bulge will rapidly pass and there will be flat demographics again.

    There’s $20b in the NZ Super fund at the moment. When the bulge starts to bite, you could put 10% of the current spend – $2b – towards super every year for 10 years to flatten out that hump. Not long after that it won’t be a problem any more…

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  14. tknorriss (327 comments) says:

    “The first step that the Government should take is to entrench the current scheme for everyone born before say 1960″

    I was born in 1960. So, how about “for everyone born before and including 1960″? :smile:

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  15. Matthew Hooton (124 comments) says:

    It is bullshit that Labour and the Greens would not attack Key if broke his word on superannuation. Every second TV ad at the election would show him having said he would resign if he changed the age or level of super.

    I agree it is bullshit but not in the way you describe. I think Labour would run ads patronising Key saying “it was only when when Labour called for John Key to do the right thing that he did, and now, thanks to Labour, New Zealand has solved our long-term superannuation problem.” They’d try to dress for the job they want rather than he job they have.

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  16. Weihana (4,496 comments) says:

    rouppe,

    This idea that in the next 30 years we’re all suddenly going to start living to 100 is nonsense.

    Really? I expect we’ll be harvesting artificial organs and we’ll have tiny robots patrolling our bodies making repairs, detecting and eliminating cancer and all round keeping us healthy.

    Hopefully we’ll have hover-boards by then as well. :)

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  17. Jeff (47 comments) says:

    Regardless of the way that Labour, the Greens, NZF, or even ACT frame the discussion, Mr Key has been appalling in his explanations.

    Last night on TV he dodged the question around who else supported his policy. All he could name was the National Party.

    Thats the hight of conceit. Who are National to decide whats best for NZ superannuation? The overwhelming policy position from analysts around the world is to increase the the age.

    In terms of the timing, its disingenuous to use confusing figures to colour the debate. I mean ffs Bill English is all about lowering govt debt, but on this issue its ok to push to out to another future govt.

    For me, this is the most pressing long term economic issue facing NZ. Yes job creation is important, but to be fair theres not a whole hell of a lot happening in the market at the moment. water.

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  18. Pita (366 comments) says:

    Labour’s new found virtue is a pure theatre, the super problem is not new and no more pressing now than it was when Labour were in office. It was a problem in 2006 when Labour introduced Interest Free Student Loans, at a current cost of one billion annually. It was a problem when Labour introduced Working for Families at a $2.8 billion annual cost.

    If Labour were genuine, then perhaps their proposed cross party talks should be expanded to include these other taxpayer imposts.

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  19. Jeff (47 comments) says:

    *please delete the above post*

    Regardless of the way that Labour, the Greens, NZF, or even ACT frame the discussion, Mr Key has been appalling in his explanations.

    Last night on TV he dodged the question around who else supported his policy. All he could name was the National Party.

    Thats the hight of conceit. Who are National to decide whats best for NZ superannuation? The overwhelming policy position from analysts around the world is to increase the the age. The polls are against him too.

    In terms of the timing not costing much, its disingenuous to use confusing figures to colour the debate and say it doesnt matter when it happens. I mean ffs Bill English is all about lowering govt debt, but on this issue its ok to push to out to another future govt. (read taxpayer)

    For me, this is the most pressing long term economic issue facing NZ. Yes growing the ecomony in the here and now is important, but so is the economy in 20 years.

    I have voted National 3 times. If this argument is still being used by National until the election, my vote is going elsewhere.

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  20. mikenmild (10,720 comments) says:

    Why be surprised if opposition parties attack Key’s credibility on this? It was one of his more incredible statements.

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  21. flipper (3,557 comments) says:

    Yesterday DPF had a very relevant post, that relates directly to the NZ Super / transfer payment mess, and some comment offered above. The following contains additional commernt/info:

    More tax tracking
    June 12th, 2012
    Maxim has done some tax tracking scenarios, for four different people or households. They are:
    • Minimum wage earner
    • Median income earner
    • Median income household
    • High income household

    The minimum wage earner pays an average 13.5% tax being $3,320. The high income household pays $33,240 tax.
    [So …. Progressive or regressive?
    Go to the link above for details.

    But ….. Also, bear in mind that only 78 % approx. of tax collected is actually available to the Government for distribution / use after policy advice rubbish from the bureaucracy. And, in respect of NZ Super costs, it is not clear whether this is net of tax or gross (pretax).]

    Some of the breakdown of what that [the tax collected] goes on is:
    • NZ Super $4,745
    • Family Tax Credits $995
    • DPB $857
    • Invalids $622
    • Accom Supp $580
    • DHBs $5,611
    • Primary schools $1,355
    • Tertiary tuition $1,121
    • Secondary schools $1,010
    • ECE $653
    • Student loans $330
    • Tertiary allowances $289
    • Defence $926
    • KiwiSaver $332
    • Debt $1,748

    [So the minimum wage earner (including those on super) is paying average per/person tax of $ 3320, but receiving $7799 in transfer payments.

    A total of $ 4758 per taxpayer is spent on education, second only to Health taking $5611 p/tax payer.

    Bear in mind also,
    Markhams Accountants “report that Households earning more than $120,000 pa pay 97 per cent of net individual income tax revenue, while the top 10 per cent of households generate 71 per cent of the individual tax take. Further, Households earning less than $50,000 (43 per cent of households) receive more in income support than they pay in income tax, on a net basis. Income tax paid by households earning between $50,000 and $100,000 effectively pays for this refund.” - Karl du Fresne, Dominion Post, 20.12.2011, P B5]

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  22. flipper (3,557 comments) says:

    As a follow up on NZ Super above…..

    Any sensible person can see that the debate should be much, much wider than NZ Super options.

    The fact is the current debate is media driven – by a group that will immediately hail any JK policy tweak as a “back-down”. Wonderful folk the current media and their left wing surrogate (or the reverse) apparatchiks.

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  23. trout (901 comments) says:

    So John Key promised he would not tamper with Super; could it be that he genuinely believes that the oldies deserve it, and that proper management of the NZ economy would enable it to be paid. Much is made of the number of wage-earners that are required to support the scheme; this is old thinking; the proposition ignores the reality that high productivity and new technology has enabled wealth to be created by many fewer workers. Pundits and economists project the present into the future without regard for changing circumstances. An oil strike off Tarakaki for instance would mean a totally new paradigm.
    Of course the Left want Key to change mind; it has become a dare. And if he does they will keep hitting him over the head with it right up to the next election; Worth noting that there is more resistance in the electorate to a change in super eligibility that the MSM describe; most of the noise is coming from the well off, and the pundits. The changes the Labour party proposes are not well publicized. It appears that their policy is full of exceptions (early retirement for ‘manual’ workers, (and maoris?))and means testing. The electorate needs to know.

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  24. RRM (9,453 comments) says:

    I expect I’ll have to keep working until I’m 70 or older… don’t really know if I’ll ever be able to retire.

    But I like this idea also:

    dime (4,528) Says:
    June 13th, 2012 at 11:35 am

    how bout we just start digging more shit out of the ground and keep funding it

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  25. Paulus (2,501 comments) says:

    This is the media’s current taskforce – to continue to destroy National’s credibility.
    Another “Ambrose” affair.

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  26. Redbaiter (7,619 comments) says:

    NZ is a stupid little socialist country governed by mostly stupid little socialist boot licking politicians elected by mostly stupid ignorant voters.

    Welcome to the reality Thatcher tried to warn you about decades ago-

    “The trouble with socialism is you eventually run out of other people’s money.”

    Meanwhile, in countries where the voters (and the politicians) have a few more brains, -

    http://www.businessinsider.com/why-you-should-pack-your-bags-and-move-to-signapore-2012-6?op=1

    Example-

    “Economists have long ranked Singapore’s health care system as one of the best in the world.

    And it’s no wonder why: total expenditure on healthcare (and this is good health care) is under 4% of GDP.”

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  27. mikenmild (10,720 comments) says:

    I have no problem understanding why Redbaiter would admire the one-party state that is Singapore, but I would have thought he’d consider thier health-care system hopelessly communistic.

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  28. slijmbal (1,211 comments) says:

    Adding means testing basically tells someone they need an extra $300K saved up (very rough figure) if they have included the current super in their calculations. Not an insignificant amount for many. As someone looking retirement in the eye in the next 15 years (approx) I never trusted the government and am assuming no super but many do not have that luxury.

    if we look at the British old age pension as per the 80s (when I last fully understood it) – it had the usual unintended consequences – unless you expected to be pretty damn well off it was an incentive not to save because of means testing. I watched this happen with my uncles and aunts. Any changes in super need to be combined with a savings policy to counteract this.

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  29. meh (165 comments) says:

    I’m with Dime on this one, lets mine some shit to pay for this (along with the all the other economic benefits mining would bring)

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  30. Redbaiter (7,619 comments) says:

    Dime is an idiot retailer. Dependent upon socialist churning therefore to turn a dollar.

    He should go and have a try at mining himself, and then he’d find out how totally fucked up in terms of real wealth production this country really is.

    And Key and his acolytes flit around saying they want to help produce wealth. All they do is talk. They don’t actually do fuck all.

    This country will be a total wreck at the hands of the Marxists before there is ever enough momentum to get mining going again.

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  31. Redbaiter (7,619 comments) says:

    Hey Mikey its only socialist fuckwits like you who don’t know that NZ is more of a one party state than Singapore will ever be. Governed as strictly by revolving door cultural Marxists as any totalitarian dictatorship.

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  32. davidp (3,540 comments) says:

    meh>I’m with Dime on this one, lets mine some shit to pay for this

    Take the issue to a referendum. Two options: 1. Keep the age at 65 and pay for it with mining, oil, and gas receipts. 2. No mining or oil exploration and increase the age to 67. The Greens and Labour would both be on the side of the environment and hard work for the elderly. And they’d lose in a landslide.

    But I don’t see what the problem is. If all the parties except National want to sort out this issue then they have a majority in parliament and can do so. Then the voters can decide what to do about the makeup of parliament at the subsequent election.

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  33. swan (659 comments) says:

    “But there does need to be a way forward. However this is a path that should not be rushed. Any changes are likely to be post 2025 or even later. Whether decisions are made in 2015 or 2017 is not going to be greatly material.”

    This makes no sense.

    The only reason changes are likely to be at some time in the future (e.g. 2025), is because there is a consensus that you dont want to change the rules for people too close to retirement. But this is obviously relative to the present. So if the decision is made later, the implementation must also be later. Likewise if the decision is made earlier, implentation can be made earlier.

    Saying we can put off decision making because implementation is a long way off misses the point.

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  34. Angus (536 comments) says:

    Mining ? Those useless soft-left fucks in National have already mused over that one . . but skulked off like frightened cats the moment Robyn Malcolm showed up.

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  35. backster (2,077 comments) says:

    If there were cross party talks would Labour be prepared to give up their announced policy of reducing the age for some workers back to 60. One assumed that in announcing that proposed reform Mr Shearer had in mind those already on the un-employment or similar benefit, but in any case if a proportion qualify for Super at age 60 and a proportion at 67 there would be little saving on the present universal payment at 65. Undoubtedly the cost of those having their qualification age reduced to 60 would have any extra expense paid for by extra taxes on those whose qualification age was extended to 67.

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  36. Pete George (22,839 comments) says:

    pay for it with mining, oil, and gas receipts.

    That’s a bit of a punt isn’t it? There’s no guaranteed income with mining, oil, and gas.

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  37. Longknives (4,456 comments) says:

    I agree with Dime- Mining could potentially save our struggling economy (Robyn Malcolm and co can take a hike….).

    I’d also like to see the DPB gone. If we stop paying Feral scum to spit out multiple children like the lovely lady in the link we would save bloody billions..

    http://www.stuff.co.nz/national/7092335/Dad-wants-custody-of-jail-birth-baby

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  38. KiwiGreg (3,176 comments) says:

    Just to give some context on life expectancy (which continues to increase), this from statistics:

    “Based on the mortality experiences of New Zealanders in the period 2007–2009, life expectancy at birth was 78.4 years for males and 82.4 years for females. Since the mid-1980s, gains in longevity have been greater for males than for females. Between 1985–1987 and 2007–2009, life expectancy at birth increased by 7.3 years for males and 5.3 years for females. As a result, the gap between males and females in life expectancy narrowed from 6.0 years to 4.0 years over this period. ”

    http://socialreport.msd.govt.nz/health/life-expectancy.html

    So over 20 year period life expectancy increased by 7.3 years for men.

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  39. bc (1,334 comments) says:

    DPF: “I believe the 2008 pledge was wrong, and I regret it was made. However Key must never break his word on this issue – his pledge was too specific, where he said he would resign both as PM and as an MP.”

    It’s a shame that he didn’t make a similar pledge when making his election promise about no cuts to frontline staff then.
    That’s an election promise that he seems quite happy to break.

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  40. Monique Watson (1,062 comments) says:

    I can’t see any entrenching of the scheme of those born before 1960. The biggest cost is going to be those born between 1946- 70. It’s far too late to ring in changes post 2025. this isn’t an anti-babyboomer rant; it’s reality that the number of workers supporting retirees changes from 10:1 to 4:1
    Totally unsustainable and as much as my generation has a responsibility to look at the baby-boomers expectations of support in their retirement, baby boomers need to be realistic.
    don’t agree with raising the age to 67. As was pointed out, the percentage of GDP saved is insignificant. I’m feeling rooted by the age of 38; any longer than 65 and this becomes punitive in years that could be spent volunteering and providing essential props to society.
    Much better to wind up the Cullen Fund and put it against the retirees born in the era that was told future generations would support them in their retirement. Pay it into individual Kiwisaver accounts, and let that be the fuckin end of it. Bring in means testing.

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  41. GPT1 (2,090 comments) says:

    Your proposal simply reinforces the inter-generational inequity protecting baby boomers from their failure to save enough for retirement and foisting that debt and an increased retirement wage on the next generations.

    I find it ironic that there is belt tightening around students to reflect economic realities but at other end of the spectrum those nearing retirement continue to hold their hands out.

    Key said he would resign as PM and MP – an unfortunate pledge – but one that would be kept by making it an election issue in 2015.

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  42. nasska (10,674 comments) says:

    PG

    …”There’s no guaranteed income with mining, oil, and gas.”…..

    If you want to extend that argument then the future looks very bleak for there’s absolutely no guaranteed income from any thing we do. Indeed the reverse would be easier promoted as since we are very reliant on the market vagaries of primary produce, to diversify into the minerals sector could give us some security in the value of our exports.

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  43. publicwatchdog (2,106 comments) says:

    “It is quite correct that future superannuation costs are not affordable without large increases in taxation. ”

    How is this ‘correct’ when we don’t have the ‘devilish’ detail which proves EXACTLY where public tax monies (and rates monies) are being spent?

    How is this ‘correct’ if billion$ of public tax (and rates) monies could be saved by CUTTING OUT ALL THE PRIVATE CONTRACTORS who are dependent on ‘corporate welfare’?

    (In my considered opinion, private contractors are on ‘corporate welfare’ if there has been no ‘cost-benefit’ analysis which PROVES that they are providing services more ‘cost-effectively’ than former in-house provision by staff directly employed at central and local government level.)

    http://www.scoop.co.nz/stories/PO1111/S00095/wheres-nationals-corporate-welfare-reform.htm

    “Where’s National’s ‘corporate welfare’ reform?

    Which of the maor political parties are pushing for ‘corporate welfare’ reform and shrinking the long-term dependency of the private sector on our public monies?

    Where is the ‘devilish detail’ at both local and central government level – which shows EXACTLY where our public rates and taxes are being spent on private sector consultants and contractors?

    Why aren’t the names of the consultant(s)/ contrators(s) – the scope, term and value of these contracts, published in Council or central government Annual Reports – so this information on the spending of OUR public monies is available for public scrutiny?

    Where are the publicly-available ‘Registers of Interests’ for those local government elected representatives, and staff responsible for property and procurement, in order to help guard against possible ‘conflicts of interest’ between those who ‘give’ the contracts and those who ‘get’ the contracts?

    Where’s the ‘transparency’?”

    Check out http://www.dodgyjohnhasgone.com for information on how to achieve a legislative framework for genuine transparency.

    Penny Bright
    ‘Anti-corruption campaigner’

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  44. KH (687 comments) says:

    Lifting the age is “a very simplistic way of looking at a very complex issue”. said John Key.
    At last a sensible reporting of the issue.
    And DPF’s comments are right on. This is an issue that needs a long term multifactor plan.
    The media over focus over the last month, on just lifting the age, has been just dumb, deluded even.

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  45. kevin_mcm (152 comments) says:

    David

    While you offer reasoned agrument on a wide range of topics your are very awry with this. As someone born in 1957 I am one of those that will/should be affected by changes – and the more time individuals are given to manage the changes the better.

    I am old enough to remember the original bribe from Muldoon that bought in National Super. It was known to be unaffordable then and is more unaffordable now. The issue is not just National Super – it is also the healthcare costs assocaited with an ageing population. Bluntly, anyone who tells you they are entitled to National Super because they have paid their taxes is either wilfully ignorant or a liar.

    The steps required which should be done as soon as possible:
    – prepare and publish a financial outlook for the next 40 years – make reasonable estimates of economic growth given the world economic climate and NZ history
    – make the legislative changes which should include:
    – increases in age of entitlement by say 3 months every year for the next 9 years.
    – make trusts look-through for income purposes
    – means test national super

    These actions will not be enough, so also required will be
    – helath care limits for aged people (do you want the red pill or the blue pill)
    – get public salaries under control (e.g. teachers in Ireland have had a 40% reduction in net earnings over the period of the financial crisis, most employees in the private sector have had limited or no increases for a number of years, meanwhile public servants are getting increases)
    – get piblic expenditure under control (anyone who thinks this government understands cost control has never been in private business when times are hard)
    – scheduled increases in taxes

    I don’t see how we can have a proper national debate on this while the numbers are not made available to all – by forecasting out 40 years to avoid the issues around the shonky accounting the is government accounting (but that is another topic).

    Kevin

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  46. Chris2 (756 comments) says:

    We generally always know how much is going to be needed to be spent on Superannuation in the long term as we have lots of population statistics to work with.

    But we never never know how much will be needed on education because there are no statistics that can predict how many couples will have children – the best the Government can predict is 5-7 years in advance based on birth figures.

    Old people have already contributed to society, but why should a “birth explosion” be given a blank cheque?

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  47. kowtow (7,625 comments) says:

    Thin end of the racist wedge,watch this as an excuse for Maori to get earlier retirement.

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  48. Alan Wilkinson (1,816 comments) says:

    GPT1: “Your proposal simply reinforces the inter-generational inequity protecting baby boomers from their failure to save enough for retirement and foisting that debt and an increased retirement wage on the next generations.”

    Wrong. There is no evidence baby boomers have saved less than other generations. (I suspect quite the reverse is true.) There is clear evidence that life expectancy has increased and that the current generations are having fewer children much later which has reduced the workforce and distorted the age distribution. Sadly, the least productive population sectors have also been producing the most children further reducing national wealth.

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  49. B A W (98 comments) says:

    I don’t like the idea of entrenching legislation, because things change in the future.

    Our parliament is great because it can quickly change things at will.

    But this policy has to change and I am pleased that the opposition are binging it up. Makes it harder for them to back down.

    Unless we speed up the process of rasing the age there is nothing that this policy will do in the short term.

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  50. Joseph Carpenter (210 comments) says:

    Well said kevin_mcm.

    Surely in terms of good governance, the national interest, the citizen interest and sheer practicality the earlier any changes are made the better? Whats preventing National (and John Key) announcing changes to take place in the future after he’s gone? That would still be consistent with the pledge.

    Also how evil that you want to entrench the current National Superannuation for all those born prior to 1960 – when you know damn well National Super was started in 1977 as a result of the 1976 election. You’re saying that everyone who had absolutely NO say in the creation of National Super (being under 16 at introduction) end up bearing all the consequences but everyone who DID have a choice, who voted for and has all the responsibility for National Super gets clean away with – they all knew damn well from Day-1 it was huge Ponzi scheme – read the media and debates of the times. I say fuck ‘em, nothing gets entrenched, they are in it together with their descendants and have to bear it with them.

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