From a David Shearer speech:

The same principles (see social contract and fairness) apply to superannuation. While you are working you contribute to superannuation, so that when you retire there is something set aside to live on.

That is fair.

In fact, our scheme is one of the fairest in the world because it set aside the same amount for everyone, whether you were at home raising the kids, working to build the dam, or the boss.

It’s a scheme to be proud of, and its crowning success is that in New Zealand we have one of the lowest rates of poverty among seniors of anywhere in the world.

I want to make sure that endures into the future. All New Zealanders should be able to look forward to receiving super – including our children and grandchildren.

Young People

When I speak to young people, I notice they have lost hope that super will be there when they reach retirement age.

They have lost their faith in politicians who have used this issue as a political football and are only interested in the politics of the here and now, not about building for the future.

They can see that we’re living longer, that we have more people in retirement than ever before, and that the numbers are growing rapidly.

I believe it’s our responsibility to find a way to pay for that so our young people don’t miss out when it’s their turn.

Today, for every retired New Zealander there are about 5.6 people working and paying taxes. By 2040, there will be about 2.5 people working for every one retired.

By the time of the next election – 2014 – the cost of superannuation will exceed everything we spend in education – pre-school, primary, secondary and all the polytechnics and universities. And it will continue to rise.

Preserving NZ Superannuation

So how do we preserve NZ Superannuation for future generations?

Dr Cullen helped — he ran a strong economy that achieved good surpluses, and put some of those surpluses into the NZ Superannuation Fund to help with some future costs. But it doesn’t pay the increase in costs, and after the global crisis the government stopped contributing altogether.

The Labour government added to it with KiwiSaver so people in the workforce could set aside something extra for their retirement, and the economy would benefit from deeper pools of savings.

That has been very successful – 1.7 million people are enrolled in KiwiSaver.

Australia has employers contributing 9% into their super scheme – it’s massive now and they have capital in the trillions of dollars.

It was the same scheme introduced by the Labour Government that Muldoon cut in 1975. Just think where we could be now if we’d continued with it.

But the superannuation bill hasn’t stopped growing.

Super Options

So we in Labour have looked at the options. And the overriding principle in our plan is fairness. Much of what we propose is based on the analysis of the independent Retirement Commissioner. That we raise the age of entitlement from 65 to 67 – just like Australia, the UK and the US have done.

John Key says we can avoid the problem by growing our economy faster. Problem is, we’ve barely managed 1% economic growth since he became Prime Minister.

It’s simply not being honest to guarantee we can pay for our super beyond the life of his government. No economist agrees with him.

Instead, we need to take some tough decisions. I’m prepared to do that. But only on the basis what we do is fair.

1. Young able to look forward to superannuation

First, young New Zealanders should be able to look forward to superannuation when they retire.

We can’t expect them to keep paying a growing superannuation bill just because we refuse to take the tough decisions.

A young person starting out today goes into debt to pay for their education. Then they face house prices totally out of reach for an earner on the average wage.

Meanwhile do we want more and more of the tax they pay to go to an expanding super bill when there’s still health and education to pay for? That’s not on. It’s not fair.

2. Time to prepare

Second, it’s fair to give New Zealanders plenty of time to prepare for any changes. They must be phased in gradually so people have plenty of warning.

No one near retirement age is going to lose their current entitlement, because that wouldn’t be fair.

3. Manual workers

Third, we need to be fair to people in manual jobs or who, for whatever reason, cannot continue to work.

If you’re a bricklayer or you’ve been on the freezing works chain for 40 years and your back has given out, there will be transitional assistance for you.

4. No cut

Fourth, we won’t cut the rate of superannuation – that’s not fair to anyone. Let me reiterate that – it’s not fair to make changes for super for people who are already retired, and I won’t.

I want us to look ahead at the kind of country New Zealand is going to be in 10 or 20 years from now, and ask how we prepare for that future. Our plan protects everyone who is retired now, while also guaranteeing younger Kiwis they too will be provided for in their old age.

5. Cross party consensus

Finally, I want to restate my pledge that I will work across the parliament with whatever party to achieve a consensus on how we move forward.

We are prepared to take the tough decisions. But there are other ideas that we are also prepared to look at. It’s time politicians worked in the best interests of New Zealand.

Superannuation is about planning for the future. And planning for New Zealand’s future is what responsible leaders should be doing.