Guest Post: The politics of superannuation

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has been a messy political issue for much of the last 40 years.  When the government announced in March that the state pension age would increase from 65 to 67 in about 20 years, no-one seriously thought that would park the issue politically in this election year.  The government effectively admitted as much when it said that legislation to make the change (and also the change to the residency period) would have to wait until 2018.  According to Steven Joyce, “Scheduling the legislation in this way gives all political parties the opportunity to discuss their position with the public before it comes before Parliament.” (see here)

For me, that’s code for ‘Here’s a policy that we can give way on in any discussions we have with New Zealand First once the election numbers are in.’  Because, unsurprisingly, Labour has said that the pension will stay as it is but, more importantly (for pension policy), New Zealand First says the age will be 65, presumably forever.  This will probably be one of its ‘bottom lines’.

This is all very predictable.  It’s also an unsatisfactory way of dealing with the issues associated with pension, retirement and saving issues.

The triennial review of retirement income policies by the Retirement Commissioner isn’t working and needs to change.  The 2016 Review (published in December as a jokey on-line cartoon presentation) was so unsatisfactory that Michael Chamberlain and I decided to write The Missing 2016 Review – building trust for life beyond work (accessible at  We released that last Monday.

We described the Retirement Commissioner’s report as an evidence-free zone for her 34 recommendations/observations.  Our own report tries to set down everything that is known and that might be relevant to a needed national debate on all the issues associated with both public and private provision for retirement.  We cite 136 external reports and data sources with 250 footnotes and 265 URLs to take readers directly to online resources and reports.

All this means that we know quite a lot but not nearly enough for the kind of national debate we think is needed.  We posed 125 questions under 21 headings that New Zealand must answer.  A lot of those can’t be discussed without more, better data, some of which will take years to gather.

We identified the nine key issues or reforms that we see as essential to a sustainable, flexible, inclusive retirement income framework.  We listed them here in order of significance to us, starting with greater economic growth.  None of these key issues rated a mention in the Retirement Commissioner’s 2016 Review.

We suggest that the political parties could start with agreeing on the need for better data before we start the national discussion New Zealand now needs.  That discussion needs to be led by a group that gains everyone’s confidence by assembling impeccable evidence on things that matter.  We cite the Dunedin Multi-Disciplinary Health and Development Study as a model of what’s possible.

Once we have that impeccable evidence, the political parties can decide what’s important to them, policy-wise.  Our experience is that, once we know what’s really happening, the answers are usually clear.

Taxpayers currently spend a net $11 bn on New Zealand Superannuation and at least another $800 million on KiwiSaver tax breaks.  New Zealand should be at least curious whether taxpayers are getting good value today for that spending.

We think New Zealand has the best state pension in the developed world but our retirement income arrangements can certainly be made better, more flexible and more resilient.

The Missing 2016 Review recommends that New Zealand should aim for a 2020 equivalent of the 1993 Superannuation Accord, supported by a permanent research group.  That sounds like a ‘big, hairy, audacious goal’ but, signing up to that idea shouldn’t be too hard for the political parties.  Who could possibly object to finding out what’s really happening?

The review/reform process we have at the moment is unsatisfactory and needs to change.

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