David Farrar: Chippie is brave and right

The Herald reports:

Labour leader Chris Hipkins says he is open to discussing whether New Zealand’s superannuation should be means-tested.

Hipkins told Newstalk ZB’s Kerre Woodham he would not want full means-testing of the country’s pension but added “there are questions”.

“I don’t want to do this on a unilateral basis, I think these need to be conversations across the Parliament about whether somebody who is still working full time, earning a six-figure salary should be claiming superannuation.

“I am open to a conversation about that, but I think it has to be done in a constructive, bipartisan way.”

Asked how long such discussions between parties could last before something happened, Hipkins said, “I guess it depends whether there is an appetite across the Parliament to even have that conversation”.

I hope there is. I think the current scheme (without means testing) should be locked in for everyone born before 1981. But for those aged 45 or under, the replacement scheme should be:

• Age of eligibility 67, and increases by 1 year for every two year increase in average life expectancy over 82 (so if it becomes 86, then eligibility at 69).

• A non work tested benefit for those aged between 65 and the eligibility age, set at 1.25 times the jobseeker benefit

• Annual adjustments to NZ Super of CPI +0.25% so it increases in real terms, but not as fast as wage growth

• Means testing with NZ Super abating if you earn $180,000 at 25c per dollars above that, so fully abated at $280,000

This would provide a generous but affordable scheme for the future.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition.