Advancing Debate About Super Solutions

There are increasing calls for a discussion on the future of our National Superannuation. It is expensive, and is going to get much more expensive. Can we as a country afford to change nothing? Or should we be considering options?

This blog is part of a campaign to promote discussion about our Super, with parties and MPs, in social networks, in the media. See:

During the last election Tim Watkins posted

Finally, we see the elephant in the room

The simple reason superannuation is such a big talking point now – and why Labour’s new policy is so significant – is that the super bill is one of the country’s biggest.

It’s the elephant in any room that has something to do with government spending.

Bigger than the dole.

Even bigger than the DPB. Because there are so many retired folk – many more than there are unemployed or sick.

Here are the numbers. This year’s Budget had a total social welfare spend of a little over $23 billion. So how does it break down?

Sickness benefit: 782.38 (3.40%)
Unemployment benefit & emergency benefit: 1,028.95 (4.40%)
Accommodation assistance: 1,264.23 (5.50%)
Invalid’s benefit: 1,346.84 (5.80%)
Student loans: 1,589.68 (6.90%)
Domestic purposes benefit: 1,894.64 (8.20%)
New Zealand superannuation: 9,575.37 (41.30%)

As you can see, superannuation is over 40 percent of the bill. Nothing else hits double figures. And as a share of GDP, the cost of super is forecast to double in the next 40 years.

And in a Herald column National’s Super problem David Farrar points out

Superannuation last year cost $8.8 billion and in four years time is forecast to be $12.3 billion.

It is a rapidly growing cost – does this make it a rapidly growing problem unless we address it? Should we at least be talking about it? Should our MPs be seriously looking at it?

John Key and Bill English think that nothing needs to be done while they lead National – National’s toes dug in Super and Key locked in opposition to cross-party Super, and Farrar:

He pledged that there would be no change not just if elected in 2008, but for the duration of his time as Prime Minister. He locked in the policy, and also said any breach of the pledge would lead to him resigning not just as Prime Minister, but as a Member of Parliament.

But Farrar thinks this was an unwise stance.

The lesson for both the current Prime Minister, and any future Prime Ministers, is to never ever make any pledge beyond the next term of Parliament. Doing so is both short-sighted and anti-democratic. Elections should be about choices. Policies should change as circumstances change.

So does Fran O’Sullivan:

Key sidesteps that old, old problem again

John Key’s Government would rather play the game of “pass the fiscal time bomb” than confront the real financial pressures that will beggar future New Zealand generations.

That’s the harsh takeout from the Prime Minister’s decision to (yet again) put off the day when a New Zealand Government has to foreshadow the introduction of policies to deal with its long-term liabilities.

It’s hard to believe the Government is prepared to sit on its hands until the 2014 election, by which time 2020 will be only six years off, let alone duck the issue until/or if it gets a third term in Government.

And Duncan Garner thinks something has to happen, starting sooner, for later:

Key’s superannuation position must change

John Key’s entrenched position not to touch the age of eligibility for New Zealand superannuation is unsustainable. He’s simply putting off a decision that must be made.

The Prime Minister is under mounting pressure to take a more responsible position.

No one is suggesting it needs to change now. But these things need lead time, and they need leadership – Key is offering none of the above on this issue.

He has promised not to change the settings as long as he is Prime Minister, but that surely doesn’t mean he can’t debate it. He can. And he should.

I agree. He should. We should. How do we make it happen?

Labour Leader David Shearer is actively promoting discussion on Super. He needs support from within his own party and from other parties.

There is a toe in the door – Dunne has given Key a get out of Super free card – this needs to be used as much as possible.

And we can encourage, cajole, push, insist. We can all play a party, and Your NZ is an active part of that. You can activate the campaign as well.

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  1. Alyth Long

     /  8th June 2012

    So what do people think about the oap? Those of us who have worked all our lives – and paid taxes in many forms! – and as we get older are not so able to put in 40 hours of labour….should we be relying on our families to look after us? We struggled for many years to keep our youngsters fed, dressed and schooled and now they are doing the same for their children….and we still have a morgage!! So we cannot actually stop working and enjoy our retirement as we cannot reduce our stake in our house as it has “lost value” due to the recession…….if we sold now we would have to rent……

  1. Shearer correct calling for Super debate, so far wrong approach « Your NZ

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