You do get occasionally a political party with an attack of the braveries, an attack of the cajones, and it's usually National. They wanted to raise the age of eligibility to 67 in the past two elections, but in the horse trading required to form the coalition government this time round, they've agreed to leave the age at 65.
And in a report released yesterday, the Retirement Commissioner says cool your jets, calm the farm, young people don't need to worry - not only is national Super sustainable, raising the age of eligibility would be unfair for certain population groups. The manual workers, those who are in poor health, those who are just hanging on by their fingertips to the age of 65.
Retirement Commissioner Jane Wrightson says New Zealand Super is a taonga that protects New Zealanders from poverty in old age. Claims that New Zealand Super is unaffordable are not supported by independent, publicly accessible analysis, she says.
Now, leaving aside that by stunning coincidence, independent analysis always seems to support the views of the commissioning body, there is provision within New Zealand's economy for paying Super in future years.
Those in support of raising the age say well look at New Zealand's aging population. In 1996, there were 5.7 people aged 16 to 64, supporting every retiree. At the moment there are 4.4 working age people and the 2060s, we’ll be looking at 2.2 supporting every retiree.
So we're going to have a lot of older retirees who are getting Super for longer, and fewer young people, fewer working people who are able to support that. So I take that point.
But that is why we set up the Super Fund in 2003, the Cullen Fund, as it was known. In just over 20 years, we've amassed close to $70 billion. And we haven't really tapped into it yet. Withdrawals from the fund will begin in the 2030s. Substantial drawdowns will not begin until the 2050s. So we should have a bit more in the coffers then.
So paying for the Super isn't going to be the massive problem it appears if you're looking at it through the binoculars of 20 year old vision.
It's more a matter of what's fair and what's not. If you're earning more than $100,000 a year and there are about 50,000 retirees who are, if you're earning more than $100,000 a year through your job or through your investments, do you really need the Super? Wouldn't it be better spent on a young person who was born in less than ideal circumstances?
More investment in the first 1000 days of a child's life that's born behind the 8-ball. The Super is to keep people out of poverty, not to use as gin money.
You know, a lot of older people laugh about the fact they get the Super and just use it to buy a nicer bottle of gin or put it in a savings account for their grandchildren. Some donate it, which is jolly decent of them- but you know, there's a lot of clipping of the ticket that goes along the way.
However, those older New Zealanders who are earning good coin can say, well look, we contributed to the Super Fund while we were working, that money was put aside and not spent on things we could have enjoyed, so we can use that money later.
We've paid our taxes. We're just like everybody else. We except we earn more money. We deserve to get it. It's ours. It's an entitlement. It's not a benefit, and there's a big, big difference.
What do you say? What do you think is fair? Are there any people in their 20s and 30s who believe that the Super will be there for them? Well, you should, because the Super Fund is there to look after people just like you.
As the New Zealand Initiative pointed out as well, by the time you take into account taxes and GST, it's not 8 percent of GDP, which is what they factored New Zealand Super to be. It's around about 6 percent of GDP.
If we become more productive, then it'll be less of a cost. And the report I read from the New Zealand Initiative- it was written in 2018, they also talked about the fact that successive New Zealand governments were very aware about incurring debt and running up huge debt so that they didn't get into trouble, so that the Super was affordable.
That was before the Labour government. That was before the most recent administration came in and racked up enormous debt. Still, with a bit of pain and a bit of hard work and a bit of courage, we can get through that.
If you're in your 20s and 30s, do you believe the pension will be there for you? You should. Are you depending on it? You shouldn't. You should make provision as much as you can for yourself and see the Super as an extra.
Kerre McIvor, is a journalist, radio presenter, author and columnist. Currently hosts the Kerre Woodham mornings show on Newstalk ZB - where this article was sourced.
And in a report released yesterday, the Retirement Commissioner says cool your jets, calm the farm, young people don't need to worry - not only is national Super sustainable, raising the age of eligibility would be unfair for certain population groups. The manual workers, those who are in poor health, those who are just hanging on by their fingertips to the age of 65.
Retirement Commissioner Jane Wrightson says New Zealand Super is a taonga that protects New Zealanders from poverty in old age. Claims that New Zealand Super is unaffordable are not supported by independent, publicly accessible analysis, she says.
Now, leaving aside that by stunning coincidence, independent analysis always seems to support the views of the commissioning body, there is provision within New Zealand's economy for paying Super in future years.
Those in support of raising the age say well look at New Zealand's aging population. In 1996, there were 5.7 people aged 16 to 64, supporting every retiree. At the moment there are 4.4 working age people and the 2060s, we’ll be looking at 2.2 supporting every retiree.
So we're going to have a lot of older retirees who are getting Super for longer, and fewer young people, fewer working people who are able to support that. So I take that point.
But that is why we set up the Super Fund in 2003, the Cullen Fund, as it was known. In just over 20 years, we've amassed close to $70 billion. And we haven't really tapped into it yet. Withdrawals from the fund will begin in the 2030s. Substantial drawdowns will not begin until the 2050s. So we should have a bit more in the coffers then.
So paying for the Super isn't going to be the massive problem it appears if you're looking at it through the binoculars of 20 year old vision.
It's more a matter of what's fair and what's not. If you're earning more than $100,000 a year and there are about 50,000 retirees who are, if you're earning more than $100,000 a year through your job or through your investments, do you really need the Super? Wouldn't it be better spent on a young person who was born in less than ideal circumstances?
More investment in the first 1000 days of a child's life that's born behind the 8-ball. The Super is to keep people out of poverty, not to use as gin money.
You know, a lot of older people laugh about the fact they get the Super and just use it to buy a nicer bottle of gin or put it in a savings account for their grandchildren. Some donate it, which is jolly decent of them- but you know, there's a lot of clipping of the ticket that goes along the way.
However, those older New Zealanders who are earning good coin can say, well look, we contributed to the Super Fund while we were working, that money was put aside and not spent on things we could have enjoyed, so we can use that money later.
We've paid our taxes. We're just like everybody else. We except we earn more money. We deserve to get it. It's ours. It's an entitlement. It's not a benefit, and there's a big, big difference.
What do you say? What do you think is fair? Are there any people in their 20s and 30s who believe that the Super will be there for them? Well, you should, because the Super Fund is there to look after people just like you.
As the New Zealand Initiative pointed out as well, by the time you take into account taxes and GST, it's not 8 percent of GDP, which is what they factored New Zealand Super to be. It's around about 6 percent of GDP.
If we become more productive, then it'll be less of a cost. And the report I read from the New Zealand Initiative- it was written in 2018, they also talked about the fact that successive New Zealand governments were very aware about incurring debt and running up huge debt so that they didn't get into trouble, so that the Super was affordable.
That was before the Labour government. That was before the most recent administration came in and racked up enormous debt. Still, with a bit of pain and a bit of hard work and a bit of courage, we can get through that.
If you're in your 20s and 30s, do you believe the pension will be there for you? You should. Are you depending on it? You shouldn't. You should make provision as much as you can for yourself and see the Super as an extra.
Kerre McIvor, is a journalist, radio presenter, author and columnist. Currently hosts the Kerre Woodham mornings show on Newstalk ZB - where this article was sourced.
6 comments:
I think it’s vital we begin to grandfather the pension immediately; that’s a tough decision. It is not a tax refund, it is not an entitlement, it’s a Ponzi scheme. If we are incapable of taking care of ourselves in old age then we need compulsory superannuation (more like Australia, less like the embarrassingly named KiwiSaver) and we begin to pay into our own fund when we start working. We have too many people on the dole, too many people on super and a shrinking workforce to pay for it all. These are decadences we can no longer afford.
Nobody needs to starve or freeze to death but we must begin to hand the responsibilities of life back to individuals because it is only individuals that will suffer when we realise we’re too broke to keep borrowing for our nice things.
'At the moment there are 4.4 working age people and the 2060s, we’ll be looking at 2.2 supporting every retiree.' Except around 50% of working age people are tax negative, so in reality we are already at 2.2 supporting each retiree. By 2060 it will be 1:1
maybe you should stop collecting taxes with a promise that 'we'll take care of you'. move from a defined benefit to a defined contribution scheme. most of the pensions schemes across the world started that move 20 years ago!
i don't understand berating people earning while old and collecting the pension check they are eligible for. are they doing something illegal, immoral or unethical? if not, just move along - nothing to see here!
I must be mistaken, because I'm sure I read somewhere Kerre saying the super fund also known as the Cullen fund has already accumulated 70 billion and rising and not being dipped into just yet and not for quite see time to come. The good thing about vast amounts of money if it's not spent it will keep growing.🙂
I think it's fair to say that at 65 you could expect to be looked after in your senior years. Not everyone earns that kind of money of $100 k plus in their working years and they wouldn't be likely to in retirment either, that would be a stretch.
I think it's reasonable to expect a govt. body to use it's far superior resources, which Joe and Jane blogs just simply dont have, to accumulate wealth for their retirees to live out the last of their days in a reasonably humane manner. People grow old and feeble, believe me it can happen to the strongest, become isolated and can be easily taken advantage of, old age is pretty much a certainty for most.
"You know, a lot of older people laugh about the fact they get the Super and just use it to buy a nicer bottle of gin" What absolute BS! Where is the evidence for that? Only about 50000 people on Super earn more than $100k, most of us can just get by, and yes we did pay tax thinking it would contribute to our retirement. Successive governments told us that! It is not a benefit!
The insult is that loafers on Benefits and with contrived disabilities 9bad back etc) get it and suddenly experience a quite cosey existance. I recall paying I think it was 67% tax on a new graduate salary; consoled myself that I would get it back in old age. It is now anly taxed at 39%. I reckon by habit and tradition, my expenditure would be less than 80% of those on benefits.I should be jailed fro not blowing it on consumer rubbishand so creating employment in China.
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