David Seymour continues to pressure John Key on the future of Superannuation in New Zealand, this time via Question Time in Parliament yesterday.
This is one way of differentiating ACT from National, on an issue that is of concern to many, the affordability of an escalating Super cost.
Seymour: “Does the Prime Minister plan to still be in office in the 2020s when the cost of superannuation to New Zealand taxpayers rises by $1.5 billion every year?”
Key has promised to resign rather than change New Zealand’s superannuation.
This continues a campaign from Seymour. In February in NBR ACT wants referendum on Super:
ACT Leader David Seymour is challenging other parties to support a binding referendum to determine the future of New Zealand’s superannuation system.
“This is smart politics, maybe a bit too smart,” says NBR political editor Rob Hosking.
“It makes John Key’s policy of not lifting the age above 65 — when every other country with a state pension is doing just that — look like the gutless dodge it is,” Hosking says.
“But it also gives Key an out, if a referendum votes on raising the age. If that happens, it will be good for the country.”
“If the public can vote on the New Zealand flag, a matter that is largely symbolic, why not follow the same process for another intractable problem, one that politicians have been dodging for decades,” Mr Seymour says.
“It is vital that we ensure NZ Superannuation is viable over the longer term, avoiding undue fiscal stress and pressure on tax rates, and achieving fairness across generations.”
Three weeks ago (at Stuff):
ACT is trying to get the other political parties to agree to a referendum on the future of NZ Super, which the party says is unsustainable in the face of an ageing population .
ANZ’s retirement calculator suggests that to live decently in retirement, a person would need to save about $622,000 in the absence of NZ Super.
An ACT/Seymour press release on budget day two weeks ago:
National’s Budget ignores elephant in the room
The Budget’s focus is too short-term and ignores intergenerational issues, says ACT Leader David Seymour.
“National is denying the demographic realities behind rising Superannuation costs,” said Mr Seymour.
“New Zealanders are living longer than ever, a trend which won’t go away any time soon. As life expectancy rises by about a year each decade it would be fair to raise the age of eligibility for Super by about the same.
“Otherwise, today’s young people will be forced to fund NZ Super through higher and higher taxes, with no guarantee of receiving the same benefits when needed.
“The longer we wait the more drastic will be the inevitable adjustment. We must recognise the need for more intergenerational fairness.”
And yesterday Seymour questioned Key about the affordability of Super in Question Time in Parliament.
Prime Minister—Statements on Superannuation
7. DAVID SEYMOUR (Leader—ACT) to the Prime Minister : Does he stand by his statement in the House last week that because New Zealand Superannuation costs are currently less than 5 percent of GDP, and are forecast to rise to 8 percent of GDP by 2060, this represents a responsible path for overall Government spending?
Rt Hon JOHN KEY (Prime Minister): I stand by my statement, which was “We have set out a responsible path for overall Government spending so that current settings for New Zealand superannuation are both affordable and fully factored into our long-term forecast.” That is true, as the Budget shows. Other parties in this House from time to time want to cut back on superannuation entitlements, while other people want to spend the money on something else. That is a fiscal choice they should put clearly to the electorate, including Andrew Little and his idea of means testing.
David Seymour : Does it not strike the Prime Minister as odd that he is commending OECD fiscal arrangements, given that countries like France, Greece, Italy, Portugal, and Spain are all facing a brutal fiscal adjustment that means pushing up the age of eligibility for pensions, increasing pension contribution rates, and shifting indexation from a wage to an inflation basis? Is that the future we are offering younger New Zealanders?
Rt Hon JOHN KEY : No, I think it is about correctly reflecting, actually, on the current position, which is that New Zealand superannuation currently costs 4.8 percent of GDP and is expected to rise to 8 percent of GDP by 2050. At the moment, the OECD average today is 9.5 percent and is expected to rise to 11 .7 percent. So, yes, although the costs of New Zealand superannuation will rise, I think it is affordable and within our projected forecast.
David Seymour : Does the Prime Minister plan to still be in office in the 2020s when the cost of superannuation to New Zealand taxpayers rises by $1.5 billion every year?
Rt Hon JOHN KEY : I certainly hope so, but of course there will be many elections to run on, and I look forward to working with the member for as long as he is the member for Epsom, which is where I live.
Expect Seymour to keep nagging away at Key and National over Super.
Surely the escalating cost of Super is worth a flag scale national discussion and referendum.