Monday, May 21, 2012

Truth Column May 18

The following is my column published in The Truth, Friday, May 18:
When the first Old Age Pension was introduced in 1898 - over one hundred years ago - the qualifying age was 65. Fast forward to 2012 and the qualifying age is still 65. Given male life expectancy has risen from around 62 to 79 this seems astonishing.
Like so many government assistant schemes, pensions for the aged began as a tightly controlled, rather stringent programme but gradually ballooned, becoming a political football in the process. That's exactly what Super is right now with John Key staking his Prime Ministership on retaining the status quo.
Personally, I have never understood this intransigence. I asked him directly via a talk show question and answer session - why? He responded, during the 2008 election it became apparent that Labour was going to embark on a whispering campaign about his party's intention to raise the age. Thus he decided to put the mockers on it quick smart.
But it wasn't smart. Super is a huge cost with the youngest recipients accounting for a disproportionate share. The yearly bill for 65 and 66 year-olds alone is around $1.3 billion Looking ahead, as the baby-boomers age, the size of the workforce is going to shrink relative to the size of the 65 plus group. As one of them, I am uncomfortably aware of this. My kids will be (increasingly?) taxed to keep me.
So what, you may say? Hasn't that always been the way? Yes, but we haven't faced this kind of demographic change in the past. As are many European countries and the US. That's why they are lifting their entitlement ages.
Uncharacteristically Key has read this one wrong. When Phil Goff made lifting the age Labour policy in 2011 many people sensibly approved. Politicians are renowned for flip-flopping and generally we denigrate them for it. But this is one instance when a change of mind might reap kudos rather than derision.
Link not up yet but the editor's column is here.


thor42 said...

I agree.
I voted for the Nats in 2011, but this is one policy that Labour got right and the Nats got dead wrong.

I suspect that the only reason that the Nats won't support this policy is the plain simple bloodymindedness of Key.
It is pure hypocrisy to pretend to be fiscally responsible (as National is), and yet to not support raising the super eligibility age.
It has **GOT** to happen sooner or later, so it might as well be sooner.

Anonymous said...

"Super" is a benefit. It's the "codger-dole".

Please explain why an indigent at 64 1/2 years old is a bludger - while the same indigent at 65 is a respected senior citizen who is suddenly entitled to lots more money each week, but even the fact of their being bludgers is outside the politically correct cant that passes for policy in NZ.

Of course the over-65s vote - while generally dole bludgers and DPB moms do not. The solutions here are clear: remove benefits, and remove the franchise for those who would qualify for them.

A codger-dole equivalent to that in 1989 would cut in at 82 - in fact, for European New Zealanders, somewhere between 85 and 90

That's still not ideal policy, but with disenfranchisement, it is affordable.

Of course the other change we need to make is to stop jacking up the benefits every year. If we were still paying $18 per year it would all be affordable!
Even if were just paying $3000 per year that would be nearly 7 times less than we pay now!