Super greed

John Roughan has written an odd column, saying how nuts it is that people who are still working and have good incomes and are well off can get National Superannuation from age 65.

As a reporter at Parliament when the Lange Government introduced the surtax, I vividly recall Venn Young, a minister in the previous Government, explaining to me the only reason those objecting to the surtax had accepted a 66 percent top tax rate for so long was the promise of a pension at 65, paid regardless of other income, assets or private savings.

I remember being amazed, because they must have known all those years they were paying that tax rate the budget was in deficit. They weren’t paying for all the public services they were using at the time, let alone contributing to their retirement.

And I was furious, because in their delusion that generation had voted down a properly funded scheme 10 years earlier, which would have matured about now.

My generation has failed to fix that mistake though it has made the economy stronger and more demanding for the next generation.

That lack of political will to deal properly with superannuation over the last fifty years, probably because older people are a large and growing bloc of voters who tend to turn out more than  younger people, has been nuts.

This is not the first time I’ve tried to advance an alternative superannuation scheme in this column. It’s the best I can do.

I think the pension should not be available until we retire from regular paid work, and it should be available at any age after 60 to better cater for those in physically strenuous work.

That’s been suggested and rejected. United Future’s ‘flexi-super’, which allows you to choose when you start receiving Super anywhere between 60 and 70 (at a lower rate if you start younger) has been promoted by Peter Dunne and ignored by National.

In view of my generation’s enrichment by housing investments in recent years, at the expense of young working taxpayers with no equity who have to rent those investment homes, I think an asset test would be fair too.

That’s very contentious.

Only some of Roughan’s generation have been ‘enriched by housing investments’. And many of those who have  use trusts to protect their assets.

And people who have built up assets claim they have paid their ‘fair share of tax’ so deserve some of that back – they say it’s unfair to penalise them for earning well and using their money wisely.

While Roughan generalises with ‘my generation’ he doesn’t say whether he has enriched himself through property investment.

Our children are working in a tougher environment than we did, they’ve had to pay back tertiary education costs we never faced and now they face house prices fuelled in large part by my generation’s investments for retirement. They should not have to provide me with a pension until I really need it.

Fine, I hear you say, don’t take it. And you’re right. I’m trying to think what makes me any different from Donald Trump. It tax avoidance worse than taking money you don’t need from the public purse? Both are perfectly legal, if that is the only test you recognise.

But Roughan sounds annoyed that Governments and parties haven’t heeded his advise to change universal eligibility for Super.

However while receiving Super for someone his age is legal I don’t think it’s compulsory.

But since it’s not going to happen and all political parties are determined to give me a benefit I don’t need, what’s the point of refusing? That’s how I rationalise it, but really it’s just greed.

So he’s miffed that it hasn’t been reformed and uses that to make an excuse for being, as he describes it, greedy.

That doesn’t sound very rational to me.

NZ First Super bill voted down

In a close vote a NZ First bill that would have reduced Superannuation paid to older immigrants – and New Zealanders who had lived overseas – was defeated at it’s first reading in Parliament yesterday.

New Zealand First , Labour, Greens and the Maori Party voted for the bill but National, ACT and UnitedFuture had just enough votes to defeat it.

Grant Robertson (Labour):

These solutions being proposed in here by Denis O’Rourke may not be perfect, and we do have some concerns that we want to air at select committee about whether or not we have got the definition right. We do have concerns that the concept of universality is being called into question by this bill for the first time through the pro rata system. That is a very serious step to take and one that the New Zealand Labour Party is not confident that this bill will achieve in a way that we would want to vote for at the end of the road, but we want to see the issue debated.

Jan Logie (Greens):

The Green Party does not support this bill as it is written. We have some very deep problems with it, but we will support it to going to the select committee to enable a discussion and parliamentary consideration, particularly of section 70 of the Social Security Act .

So while Labour and Greens voted for the bill they has major reservations about aspects of it.

David Seymour (ACT)

You will find that even though it is a lovely idea to at least go forward to select committee and debate section 70 the reason it is so fraught is that there are so many pension schemes that it is simply very, very hard to reconcile the many schemes that there are around the world. With that in mind, this is a bill that is insincere in its commitment. It will not have the effects that we hope for, and for that reason it would not be a good use of the select committee or the House’s time to continue debating this bill through any further stages.

NZ Herald reports: Superannuation bill voted down

A New Zealand First bill that would have reduced the entitlement of older immigrants to a New Zealand pension and would have let superannuitants to receive overseas pensions without penalty was voted down in Parliament tonight after a fiery debate.

The bill, in the name of Denis O’Rourke, proposed a pro rata entitlement based on the length of time a person had lived in New Zealand between the ages of 20 and 65 years.

The bill would have allowed a full pension only to those who had spent less than five years living outside New Zealand between 20 and 65.

The bill would also have allowed superannuitants to collect an overseas pension as well by abolishing section 70 of the Social Security Act, which reduces superannuation by the amount of any overseas pension.

To qualify currently for Government superannuation, a New Zealand resident must have lived in the country for at least 10 years after the age of 20 and at least five years after the age of 50.

The current age of entitlement is 65. It is universal and not-means-tested.

Denis O’Rourke’s opening speech in the debate:

National’s David Bennett’s contentious response where he called the bill and NZ First a disgrace:

All InTheHouse videos of the debate: New Zealand Superannuation and Retirement Income (Pro Rata Entitlement) Amendment

Seymour Super pressure on Key

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.

David Shearer – superannuation

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.

Peters and Key kick Super discussion in the guts

Winston Peters and John Key have double kicked cross-party hopes of a sensible discussion on National superannuation in the guts.

Winston Peters was asked whether NZ First’s position that the super age should remain at 65 was likely to be an issue in such talks

“Of course it’s a bottom line.”

Mr Peters has rejected Labour’s calls for cross-party talks on the issue and he said Labour had made a terrible mistake with its super policy.

“If I was advising them on a political level I would ask them, how does this work?

“You’re sending out a dog whistle to a future voting group but you are not addressing the problem here and now. The here and now is an economic solution.”

NZ Herald: NZ First’s bottom line for super: 65

There have been growing calls for cross-party and outside parliament discussions on the future of NZ Super, so making bottom statements on the 2014 election are very disappointing.

And John Key, already in a self imposed instransigent Super position, has raised the politicking when the country needs leadership in the opposite direction.

“This is my challenge to Winston Peters. I dare him to go out there and say he will not under any conditions form a Government with Labour even if Labour’s policy is to raise the super age from 2020, not in the three-year period from 2014 to 2017.

“I dare him to say that. He will not… because he’s tricky,” Mr Key said.

Key can ill-afford raising trickiness regarding superannuation.

Ironically in the interview with TV3…

Prime Minister John Key is not ruling out working with New Zealand First in the future, saying he will spell out potential partners ahead of the next election.

National and New Zealand First may be the only parties refusing to address the possiblility that the baby boom will become a Super boom and bust.
This is my challenge to John Key – and Winston Peters – to take the growing concerns of many groups, parties and people on the future of NZ Super seriously, and to put aside their self bound straightjackets of no change and no discussion.
Key and Peters have given the Super discussion a bit of a kick in the guts, but a growing number of people have had a gutsful of this sort of politicking when serious leadership is called for.

Sorting out Super – what now?

We should start the discussion now. National may choose to stay out of it for now, but they will have to join at some stage.

Suggested progress:

  • Involve all willing parties and any groups and organisations with an interest in the future of NZ Super in discussion and proposal of policies.
  • Open it to wide public discussion.
  • Gather as much information and opinion as possible.
  • National and United Future have a Confidence and Supply commitment to public discussion on flexi-super – this can be used to develop the Super debate further.
  • In time for next election campaign have a commitment from all (willing) parties on the future direction of NZ Super and a timeframe for dealing with it.
  •  Include NZ Super in parliamentary business early in the next term (first half of 2015)

Let’s make it happen. Starting now.


Want a Super debate? Just do it…

Parties, groups and individuals have been calling for a discussion on the future of NZ Super. And calling for it. And calling for it.

It’s time for getting on with it and just do it. A blog has been set up to do exactly that.

All parties have been asked to submit their positions on Super. Any group or individual can submit a topic to be discussed.

The blog is party independent and open to anyone to discuss the future of NZ Super.

Just do it.

Blog: NZ Super Discussion


NZ Super Discussion is an open forum to discuss the future of NZ Super.

Many parties, organisations and individuals have been calling for a discussion on the future affordability and age availability of NZ Super. This blog is a means of doing that.

Positive input welcome.

This is a cross-party non-partisan forum, so please don’t use it for political criticism or pointscoring.

Please keep the discussion on topic and abuse free.

Anyone can submit discussion topics for posting to

Just do it.

Shearer correct calling for Super debate, so far wrong approach

David Shearer is again calling for:  “a genuine, open and honest discussion about how we can continue to afford to provide New Zealanders with financial support when they retire.”

I agree with that. It needs to be a wide ranging cross-party and inside-outside parliament discussion.

But how genuine is Shearer? In his latest call for discussion he also says:

“It’s not good enough for John Key to say that he’s worried about governing for today and somehow the future will look after itself.”

If Shearer is genuine about the need for non-partisan debate he needs to leave the political point scoring out of his “requests”.

No response from Shearer

And Shearer doesn’t seem willing to engage in genuine discussion on Super. Several times I have emailed him offering to join him in a campaign for Super discussion.

I have had one reply from his office:

“I am writing on behalf of David Shearer , Leader of the Labour Party,  to acknowledge your email.”

A Labour MP has also said they have passed on my offer to Shearer.

He has not yet  replied.

So I am publicly offering to join David Shearer in initiating cross-party, cross-media discussions on the future of NZ Super.

I await his response.

Pete George
027 327 3468


News About Debate About Super Solutions

Financial Services Council warns of NZ Super unsustainability

Tax rates will have to rise by as much as 28% to sustain the New Zealand Superannuation system in its current form, the Financial Services Council (FSC) is warning.

The council, whose members manage almost NZ$80 billion in savings, is the latest party to sound the alarm about a demographic timebomb which threatens to undermine the security of New Zealand’s cherished pension system.

Kiwis aged 65 and older will by 2015 outnumber younger New Zealander’s by 60%.

The Financial Services Council, in a report on the retirement and savings, predicts that the cost of funding the New Zealand Super will rise to 12% of GDP unless steps are taken soon to increase private savings along with other policy adjustments.

According to its modelling, the current 17.5 % income tax rate would rise to 22 %, the 33 % rate to 42 %, GST from 15 % to 19 %, and the corporate rate from 28 % to 36 %. June 11, 2012

Taxes must raise to pay for super – report

National’s under growing pressure to re-think its stance on the retirement age following a report warning of a pending crisis.

The Financial Services Council says Kiwis are living longer and tax rates will need to rise by almost a third later this century to continue funding super at 65.

It says around half those born last year are expected to make it to 100.

RadioLIVE / 3 News 11 Jun 2012

NZers want cross-party discussion on super costs – survey

A new survey shows 80% of New Zealanders want political parties to hold discussions on future superannuation costs.

The Horizon Research survey was commissioned by the Financial Services Council, which represents the savings industry.

It asked 2500 people whether they supported political parties in Parliament entering into talks on how New Zealand can provide secure retirement income in the future.

Forty-seven percent said they strongly support multi-party talks on the subject, a third merely supported them.

Less than 2% oppose the idea.

Radio New Zealand News 10 June 2012

“Uneasy reality” of demographic time bomb behind Mercer’s call for suite of changes

The financial impact of New Zealand’s ageing population could dwarf the global financial crisis unless Government takes steps now to address the problem, superannuation specialists are warning.

In a discussion document, entitled “Security Retirement Incomes“, Mercer New Zealand (a default KiwiSaver provider) calls on Government to raise the age of eligibility for New Zealand Superannuation from 65 to 67. It also suggests Kiwis be encouraged to defer retirement to age 70, as well as introduce a plan for the “decumulation” phase of KiwiSaver, whereby retirees spend their KiwiSaver funds  June 5, 2012


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.