Chris Luxon has said today twice that he wants the pension age to go up to 67.
He said it once on Kerre’s show this morning, and then at a post-budget lunch speaking to business leaders, he repeated it and he told them that this is basically going to be election policy for National next year.
Now, regardless of how you may feel about this, I mean, you'd have to be coming around to the realisation, wouldn't you, that we are inching closer and closer to this thing actually happening.
Especially after the changes that the government made to our KiwiSaver retirement funds yesterday.
It's not long now.
I think that the government will have completely wound down its government support of KiwiSaver, and then it's gonna come after the pension next, isn't it?
This is where I think it gets tricky, because this is not just about money for people.
This is emotional.
Let me lay out the emotional argument for you as it plays out in my head, OK?
It goes like this: Don't touch my pension. You can touch anything else. Do not touch my pension.
I don't care if they take away every other piece of welfare that is available to me and other people.
In fact, I would actually welcome it, because I think there is way too much welfare in this country for the middle class who don't actually need it.
You get a best start payment for having a newborn. You're having a baby. They give you money.
You get the winter energy payment. You get Working for Families, which I think is a crime.
You get the subsidised childcare for sending your kid to kindy. You get free tertiary education for the 3rd year, God only knows why.
Free government money for your KiwiSaver.
Now, as far as I'm concerned, there's way too much of that stuff going on. They can take all of that away. If they don't want to take it away, they can means test it so that actually the most, and only the most needy in this country get it.
But I will do everything I can to stop them touching my pension. Because I have earned that money.
This is not a question about whether I need that money, it is that I have earned that money.
I, like you, have contributed huge amounts of tax to this country, and actually I have not claimed very much back for myself.
It's certainly not anywhere near how much I have put in.
The only thing that stops me from being very sour about how much money they take out of my pay packet every year and the wasting of that money and the bludging by some on that money is the knowledge that when I hit 65 and want to retire, I will get a little bit back.
Call it a goodwill gesture from the government, if you like, a government who I have helped prop up just like you have for donkeys' years, by the time that money comes into my bank account.
So, good luck to Chris Luxon getting this one across the line.
I think it's going to be one of the hardest fights to win because of the emotional argument that I have just laid out for you. I think they might find it easier to take away a lot of other welfare first.
And unless they take away a lot of other welfare first, I am not budging on the pension.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show HERE - where this article was sourced.
19 comments:
As recipients of the pension-Couldn’t agree more Heather!
Denmark ( 6 mill) revises is pension age every 5 years. Now 67. 68 in 2035, 69 in 2035, 70 in 2040. Plenty of warning for citizens.
*Denmark does not have NZ's " entitlement for life " society mentality.
A few thoughts. Part 1 as comment too long
Re the national super. From the Left and the Right there are various demands for change.
The harder Left want it means and asset tested so money saved can be redistributed to targeted voters, ie jobless looking for work, jobless not looking for work but happy to have cash coming in for doing nothing , more welfare for families etc etc combined with more taxes on the ''rich'', defined differently to suit whoever is defining it, to level us for ''fairness''.
The money won't be saved; it will be targeted for votes not tax cuts.
The harder Right would like it means and asset tested because they do not believe in welfare as such. Maybe the ''savings'' would be used for tax cuts.
If you have a private fund, the Left would like to tax its earnings harder and if you save too much perhaps you could have some of the capital skimmed off from Trev, who saved a million, to help Bert, who saved 100k.
If you save ''too much'' on Kiwisaver that could be used to reduce your super under the super is welfare option. I recall Michael Cullen talking about that way back.
Some say if you work you should get super reduced or no super at all (ie nat super, the ''welfare'').
I would point out that working (in my case part time, former journo for 43 years , now working in mental ward at 69) my net super is reduced. Fairly. No complaints. If I choose to work income from all sources is added up and that moves $$ into a higher bracket. I am doing a job few young colleagues want to do; it is not for everyone. Each source of income is not taxed at M the lowest rate as some believe.
Raising the age for super is seen as a part-solution. I remember hearing about the gradual increase from 60 to 65 when I was 35. That did not surprise me. I was working abroad but had two provident funds on the go. I saw my parents in financial trouble in the mid 60s when dad was ill and realised no money, you are in strife.
Same anon Part 2:
f the age is increased, remember, though, that there needs to be work for those in the 65-67 bracket or they end up on a benefit such as jobseeker.
BTW if anyone part- Maori is unable to work and signed off by a doctor as such they, just like anyone else, can get a benefit. I have very fit Maori colleagues, one aged in his 70s, still working full time.
Some suggest a free income for all, say $500 per week each. Finland tried a universal payment but scrapped it.
To me that encourages some not to work at all . Wrong signal. I personally know late teens, early 20s eager to work and a minority few who would be happy to cruise with their mates on the dole for summer surf, sun, booze, birds etc.
We get told by Susan St John that pension money should go to ''the young'' . Some wealthy folk on super do donate.
We get told that back in my day students got better help than today. Partly true but only a small percentage ever went to uni in the late 60s early 70s. You still needed a job but jobs were there. You also could work and your employer had training schemes. Things have changed. It seems vast numbers want or need to go to uni. You are not ''educated'' unless you have a degree, whatever it is. Employers expect it.
We could use a bonding system to reduce student debt but then the Greens for example would say it restricts ''rights''.
Some say let us be like Sweden where everything is ''free''. It is not. In education you get your equipment and tuition free but Sweden has student loans. In 2018 the average student loans debt was $21,000 US. Many students live at home because of rent levels.
The vast majority of folk on the pension rely on that as their income, maybe supplemented by some interest. I did read once that is well over 80pc. Wealth was in a house, if freehold. Some say to sell the house to free up cash and pay yourself a pension until it runs down to a welfare level. That means they need to rent or go to a retirement village ($$$) or rest home. The latter may not yet be appropriate.
I own a three bedroom house and large section. It is modest 60s weatherboard in the provinces. If I sell it it costs more to get a smaller unit that would suit me better perhaps. That is the way it is. I would rather my house went to a family starting out than an investing landlord.
Changing NZ's super model to the Australian or Singapore model would take time. Making contributions at a set level to a super fund compulsory will be opposed by some on principle because of compulsion.
We can be sure of one thing. Whichever govt is in power nat super is going to be tweaked or changed.
Some say to me I am getting ''free money'' from taxpayers; especially some young ones who do not realise the system was created by Muldoon. Instead of paying a clear and separate amount towards the pension system (as in UK) he simply rolled it all into the general tax system from which it is paid.
I know many and I mean many folk on nat super who are doing voluntary work for organisations such as hospice, spca, crisis centres and so on . They are ''doing something'' for their pensions even in their 80s.
We are told the current system is unsustainable, yet others disagree, according to various models that suit the different agendas.
I like the Australian and Singaporean options but how to transition?
Is it better to tweak the current system here ? Say by introducing a cut off point in combined means and assets of XX million. Say if you have assets (house and land etc) valued at x million combined with annual gross income of x you do not get super. Applying this and countering the inevitable creative accounting and fiddles will also cost money.
I have used myself as an example in these comments so have to be anon. I would rather not be but better I think
The govt isn't proposing taking it away. The proposal is making people wait for two more years. Which is what happens in Australia, is going to be happening in the UK and US. In his 1997 work Reforming New Zealand Welfare, Michael Jones wrote,
“If the age of eligibility for New Zealand Superannuation was adjusted to equal average periods on the aged pension in 1900, the eligibility would now be 75 for men and 80 for women.”
It is good that you recognise you are being emotional. The next step is to apply reason instead of emotion. The pension is not something one earns, nor is it a reward for obeying one's legal duty to pay taxes. It is intended to ensure a dignified if frugal existence for people who are too old to earn a living anymore.
It's a false argument that people doing labouring work should get a pension earlier as their bodies have been worn out with the physical effort.
That sort of work has almost gone with modern machines and techniques.
Shovels have become something to lean on while your mate operates the JCB type digger.
10. 000 claims lodged at the Waitangi Tribunal - but the Maori economy is booming ( helped by the over $4 bill. in settlements to date). Perhaps Iwi could propose a pension plan for all trace Maori after the age of 67 ?
".... when I hit 65 and want to retire I will get a little bit back". A little bit of what Heather? I don't know if you are playing devil's advocate here, but you know perfectly well that National Superannuation is funded out of annual taxation on a pay-as-you-go basis.There is nothing saved up to give back later. Playing the devil's advocate is one thing. Relying on arguments that are just plain wrong is entirely a different matter. National Superannuation is currently entirely within the gift of the government of the day and has been since Muldoon canned the 1971 compulsory contribion superannuation scheme, a decision that economists have now slammed as one of the worst made in New Zealand's history.
If someone is ''worn out'' and genuinely can't work they can get a doc to certify and get a benefit but not super .
Gosh you lost credibility with that rant Heather . No one was touching the superannuation. just gently lifting the age of entitlement over the years . Actually you obviously cannot read the fiscal position of NZ left by Ardern and Robertson .
Perhaps Heather is being provocative. Pensions schemes available to employees are a joint undertaking with contributions on both sides. This is right and proper - and responsible employee behaviour. National schemes should be the same - but even low income people can make a contribution. The " I am owed this" attitude must change - though easier said than done in Aotearoa la la land.
Wonder if scaffolders, treedoctors and such like know about it yet...?
The way I see it. When one commences a working life, as did I in 1970, it was on the understanding that on reaching retirement age, a pension tied to the average wage would I be granted, untill death.
That, as far as I am concerned is a contract.
No, its not a benefit and where the money comes from I care not.
Getting old is a guarantee in life, for all, if you're lucky. My dad was dead at 53.
So after a previous National leader (John Key) promised the pension age would not increase as long as he was PM - National waits until the biggest part of the Baby Boomer bulge is approaching retirement, and the party is in the most precarious electoral position, and then announces it will take a two-year delay in the pension to the next election.
Not very bright.
And yet another reason (they don’t need any more!) for voters to reject the party.
The guy just can’t read the room.
To Anon 9.47, the biggest bulge of boomers are already retired. Population growth has come from immigration.
We simply cannot afford to keep the pension at 65 years old The previous government has indebted us and bought In welfare spending that is very difficult to cut back on now and in the future, that we have to find savings or raise taxes. It’s as simple as that.
I suggest not only raising the age to 67 but also means testing the pension as they do in most countries. Some farmer , who sits on a ten million dollar farm, and has an income of over a hundred thousand dollars, does not need the pension at all. They may have paid substantial taxes and have received a fraction of the benefits from their taxes, but the taxes they have paid have collectively not covered the enormous spending the successive governments have made, so they actually have not being paying into a super fund to draw down on when they get to retirement age.
I’m one taxpayer that would not qualify for any government super under a means tested system and I should be proud to say that I don’t qualify for any state super as I’ve done well enough in life to not need it
Wow , Mudbayripper, you thought you received a contract,...from the government of the day? Did you get that in writing? I suggest a tad naive. A more sceptical person would know of that old saying..." how do you know when a politician is lying? Answer: ..when you see his lips moving."
Since the early 1900's Richard Seddon introduced old age pensions. This was supercharged by the first Labour government in the 1930's with the comprehensive "Social Security" scheme funded by its own special tax of one shilling in the pound, ....soon one & sixpence in the pound after Treasury told them the income wouldn't cover even the immediate cost of the scheme. And of course the tax collected was never put into a dedicated, accumulating fund to meet future commitment but was spent on all manner of things aimed at buying our votes at election time!
It wasn't until the 1970's that the Kirk Labour government introduced the superannuation scheme where funds would be directed into the individual's personal super account, something like the current Kiwisaver scheme except mandatory and collected into one state run fund. This was the scheme voters installed Muldoon's National government to ditch.
Many still lament that Kirk's scheme was ditched, saying that if we had kept it NZ would now have a huge investment fund dedicated to the obvious needs of retirees. Of course one would have to believe that, as the fund rose to huge levels, governments of the day would not have raided the fund using imaginative justifications,....funding the Christchurch/Kaikoura/Hawkes Bay disaster recovery,...new Cook Strait ferries,...etc., you name it,.... colour in the pretty picture.
To imagine otherwise would perhaps be to believe pigs can fly!
I think our current set up, perhaps with Kiwisaver made compulsory, backed up by a limited degree of charitable superan̈nuation (progressively means tested) and paid out of the consolidated fund might be an adequate answer.
But we have to be a tad realistic, the use of private Kiwisaver providers might stop politicians' itchy fingers, but it remains possible, maybe probable, that at some point, one or more providers might collapse taking with them a chunk of the population's retirement savings. Such is a small nation living in a big bad world.
Well said Heather. As a retiree, I "paid it forward." The high number of boomers has meant an incrementally and correspondingly larger tax take. Successive governments have handed out money like water to underserving and non-productive members of society. I am grateful for my pension. I retired early due to cancer treatment. Now I am well, I can enjoy my life in the knowledge that every fortnight I receive enough to live on. We own our own home and have worked hard. They should start by massively trimming welfare payments at the other end. If you want to breed like a blowfly in a sugar bowl then be prepared to pay for your own kids' upbringing, uniforms, school camps and sports.. The expectation that because you have failed to plan a thing, and feel entitled to "free everything" from health care to housing to education to transportation, is placing a huge burden on the government coffers. It is also completely selfish and short-sighted in a small nation of 5 mill. . Many of us pensioners still donate, volunteer, make stuff, grow stuff, sell stuff and generally help ourselves. A couple of guys were fixing a pothole outside our place. One told me he was 67 and could not afford to stop working. Poor fella looked and sounded absolutely knackered. Hands off the pensioners. The Nats can say goodbye to success at the next election if they dont read what's written on the tin!
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