That the forward projections are much lower than in other countries.
That it's simple.
He also maintained that moving the age up wouldn't save much.
I disagree. It would ultimately save $1-2 billion annually depending on how much the age went up. The largest proportional expenditure is in the lowest age groups.
But here's the kicker right at the end of the paper:
The generations coming into retirement - let alone those already there - have been advantaged by being able to support NZ Superannuation from a much wider base (relative to recipients) than will increasingly be the case over the next three decades. It follows that changing demography and social conditions may bring about circumstances in which parametric change to NZ Superannuation and/or a review of KiwiSaver rules will obtain some strong degree of consensus. Can one envisage a time when "68 at 68" would seem eminently sensible, just as "65 at 65" does now?
I believe the "consensus" already exists. Remember the retirement age was set at 65 in 1898. Yes, a few people are still pretty worn out by age 65 but they could be supported by a disability benefit in the interim.
(I'm not going to blog about the issue of pension reform beyond this aspect. In election year it's primarily about what's possible in the immediate future. But there are a host of other schemes ACT could be looking at that would appear to better characterise individual responsibility. See Europe alone).
10 comments:
Great. So ACT now adopts.. Labour policy.
How about another Abbott policy: no dole until age 30?
At least it makes clear that both the dole and the codger-dole are just that: welfare.
Paid for by the 10% of Kiwis who pay for everything for everyone else.
I believe the "consensus" already exists. Remember the retirement age was set at 65 in 1898. Yes, a few people are still pretty worn out by age 65 but they could be supported by a disability benefit in the interim.
When the retirement age was set at 65 the average length of time any pension that was paid (which wasn't universal) was 2.5 years. Now it is close to 15 years and is far more generous and is universal.
But all that is ivory tower theoretical stuff in the real world people have spent their entire working lives paying into Robert Muldoon's universal "pay as you go" superannuation scheme ie superannuation premiums taken from their wages thus reducing their immediate disposable incomes.
And while you can handwave about the "few" who are worn out by 65, that is more common than you credit.
Its fine for white collar workers, many of whom are in truth engaged in bullshit jobs anyway but for those who work entails heavy manual labour the slow down actually comes in their fifties.
Superannuation is in fact an intractable problem involving real people who will have real grievances no matter how it is tackled
Lindsay, I'm really quite tired of the simplistic slogan "Raise the Age of Eligibility for the Old-Age Pension".
We all know that the demographic problem is not that there are too many retirees, but that there are too few taxpayers.
The retiring baby boomers have contraceived themselves into a corner. That is, most of them have.
So, yes, let them sing for their supper.
But what about those baby boomers who have reproduced adequately ? Does your sense of justice require that they be penalised for the selfishness of their contemporaries ?
No, I'm sure you have a sharper sense of justice than that.
A reasonably simple solution would be to raise the age of eligibility to, say, 70yo, with a year's rebate for every child raised.
Not only would that provide immediate fiscal relief, it would also encourage today's younger couples to reproduce, thus avoiding this predicament.
Of course, the most obvious and sensible immediate action would be to remove eligibility from those who continue to earn from wages, salary or self-employment.
That'd also have a hugely beneficial effect on unemployment, with so many pensioners quitting their jobs.
It's just disingenuous to compare NZ super as a percentage of GDP with what other countries spend and suggest it's 'cheap'. Particularly when it's not evident which schemes are fully funded and which are pay as you go as I understand New Zealands super is.
I think the eligibility age should *definitely* be raised. Heck, most people nowadays in their mid 60s aren't anywhere near being the semi-invalid types that many in that agegroup were about 30-40 years ago.
There is SO much wasteful government spending that it's ridiculous, and *this* would be top of my list to change (along with axing Working for Families).
Leo,
Would you accompany that "rebate" with a requirement the "raised" children reside in NZ? What about high-income childless individuals who contribute far more tax than any offspring might? Should they get a commensurate rebate?
The more that collective responsibility is interwoven, the more unattainable individual fairness becomes.
Andrei,
Interested in your source for "...the average length of time any pension that was paid (which wasn't universal) was 2.5 years"?
No it wasn't universal. Asians were barred (Winston is stil channeling the sentiment behind that appalling piece of discrimination). Maori receipt was generally at a lower rate. Anyone with a criminal record was barred. Hell, if you couldn't prove you were sober you'd be exempt.
"Superannuation is in fact an intractable problem involving real people who will have real grievances no matter how it is tackled."
Couldn't agree more.
Superannuation is in fact an intractable problem involving real people who will have real grievances no matter how it is tackled
Let's try that again:
Superannuation is in fact just another welfare handout problem involving white< middle class people who will whinge and protest and in the end vote Green or Winston grievances no matter how it is tackled
Again:
people have spent their entire working lives paying into Robert Muldoon's universal "pay as you go" superannuation scheme
there isn't any scheme. there isn't any pot of money. there is just a massive government debt and middle class white voters who think they deserve welfare basically because they're middle class and white.
I wonder how many of your readers know that the government employees super scheme was for most,if not all of its life rorted by all governments in that although the employees put in their money the various governments just put in IOUs to the point at which is was closed off. Trusting in governments is always a very risky business.
government employees super scheme was for most,if not all of its life rorted
It's not a "rort" - its how the National party designed scheme from the very beginning
the real rort - if you want one - is the government superannuation fund (GSF) which was closed by Ruth in the early 90s. But is still paying out govt employees. It's such a big scheme the payout is mentioned individual in the government accounts.
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