Saturday, December 17, 2016

THE FLOP HAS FLIPPED

Everyone knows that, following John Key's departure from the throne National will, sooner rather than later, move to implement a raft of measures designed to ensure the long term sustainability of NZ Superannuation; one of the most generous non-contributory, universal and non-means tested pension schemes in the world.

This was confirmed by Prime Minister English who said his government was not bound by the Key pledge.

While Key stood by his promise not to tinker with the age of eligibility (in stark contrast to the Bolger/Richardson 1990 commitment to 'do away with the surcharge ... no if, buts or maybes) his intransigence was criticised from both the Right (ACT) and Left (Labour) side of the political divide as failing to accept the economic reality that the scheme, as presently structured, was unaffordable in the medium term against the backdrop of an aging population.

Indeed, if you access the Labour Party website and click on their policy platform you find the following statement in para 3.27 .... 'Labour is committed to a system of fair universal superannuation.   Labour will ensure the future sustainability of the system and will consider options to achieve this'.

And so it was with some real surprise that the Little man came out with this 'little' pearlier on Tuesday "I have a very, very firm conviction coming from my 20 years experience of working with working people that lifting the age of  eligibility from 65 to 67 is something I don't accept".  

Clearly the 'flop' has flipped or perhaps he hasn't read his own policy document or is it a pragmatic dumping of policy in order to curry favor with Winston First who doesn't know economic reality if it bit him in the bum.

For the record I favor the lifting of the age of eligibility from 65 to 68 over twelve years in three month tranches.  Additionally I support the lifting of the residential qualifying requirement prior to reaching 65 to ten years (an increase of five years from the current five years) to be implemented over ten years in six month tranches.


21 comments:

paul scott said...

It is true that Superannuation must be down sized, soon as possible, and probably by age as you suggest.
Poodle Seymour is sealed in, and if English would do it he would attract a lot of praise.
It would make him a conviction PM instead of the can kicker we had.
But he is still an Equity and Democracy sell out to JHone / Mana / Maori.
Over at Kiwiblog and here the discussion is if some votes for a Bill English Government may drift south to Labour.
No , You know where that 5% drift is going, and it is to HIM.
HE will make another big meal of this, and HE is wrong of course but our comrades of 65 plus age are going to close eyes and vote NZF.
NZF 17% and it won't hurt as much as you think it will.

Noel said...

Ive never ubderstood the fixation with shifting the goal post. My generation had to put up with it.
Today is the generation of a million algorithms.

Oh look there is a blip in the forecast showing a number will be reaching superannuation age.
Quick raise the goalpost so the arthritic labourers have to endure the pain for another couple of years.

In my day soldiers knees were packing up in their 50s now today soldiers are suffering arthritis which kicks in during their 40s as the battlefield has changed.

The Veteran said...

Paul ... I have some difficulty with your rather turgid prose.

Your agreement that NZ Super has to be downsized asap and probably by age is of course vehemently opposed by NZF. For WF age 65 has always been a mantra. Not sure where that leaves you.

MMP is predicated on Parties 'selling-out'. Doesn't matter whether it's NZF selling out to Labour, the Greens or Hone or vice versa. Doesn't matter if it's ACT selling out to, UF, National or the Maori Party or vice versa. MMP requires compromise/sell-out, call it what you will.

Put it more bluntly. Although in 2014 National got sufficient seats to govern in it's own right (they, quite rightly, decided not to) can I suggest that no Party in the future will come close to repeating that. The reality is that unless you are prepared to do deals you're out and it's no good being prissy/pure about that.

I didn't vote for the bastard system but it's the system and we're stuck with it.

The Veteran said...

Noel ... your/our generation didn't put up with it. The eligibility age was lifted from 60 to 61 in 1992 and then progressively to 65 from 1993 through to 2001.

Psycho Milt said...

Clearly the 'flop' has flipped or perhaps he hasn't read his own policy document...

I disagree with Little on this, but I don't see any contradiction with Labour policy. The bit you quoted says:

"Labour is committed to a system of fair universal superannuation. Labour will ensure the future sustainability of the system and will consider options to achieve this."

That future sustainability doesn't necessarily have to come from raising the retirement age.

The Veteran said...

PM ... you put that against Labour's hammering of Key/National for failing to increase the retirement age as ignoring economic reality and you are left with only one conclusion.

Increasing the residential qualifying requirement prior to attaining age 65 to ten years will have only limited effect. It's the qualifying age that is the kicker.

If Labour wimps out on that then I guess their only other option would be to indulge in linguistic semantics and argue that the word 'fair' in their policy can be construed to acknowledge the need for some sort of 'means test' regime ... that would resonate as much as a pork chop in a synagogue/mosque. I commend that to them.

Gerald said...

This football is kicked in the open every year and the only solution offered is to raise the retirement age.
http://www.stuff.co.nz/business/money/69348442/new-zealand-superannuation-the-facts-and-the-fiction

The Veteran said...

Gerald ... thank you for the link. Commend it to all.

Noel said...

The expectation on entering the workforce in 1964 was an eligibility for superannuation at age 60.

The Veteran said...

Noel ... not really. A person entering the work force in 1964 could expect to receive the Age Benefit at age 60 which, for a married couple, varied between 50-60% of the average gross wage with a general downward trend with the rate for a single person set at 60% of the married rate. It was a benefit and, up until 1960, it was asset tested.

It was not until 1977 that NZ Superannuation as we know it came into effect. It provided for a taxable universal pension at age 60 set at 80% 0f the average wage for a married couple with the single person receiving 60% of the married rate.

In 1972 the cost of the Age Benefit was around 3% of GDP. By 1979 and following the introduction of NZ (National) Superannuation the cost had more than doubled to 6.9% of GDP. Therein lay the root of the problem.

Anonymous said...

Raising the retirement age is a good thing. Why 65?.. we have Count Otto Von Bismark to thank for that. He introduced the worlds first state run pension scheme 65 was chosen as that was the male life expectancy at the time so payouts were kept to a minimum.

We now have a 20% better mortality rate and the longer people stay in work the healthier, mentally and physically, they are therefor being less of a drain on the health system. Thirty years ago retirement parties were quite jolly, now, where they still exist, they are mournful affairs.

Unfortunately what goes up can also come down, the bay boomers (1946 to 1952) are first generation that has the potential to outlive their children and the mortality rate is destined to fall over the next twenty years...so beware of the poisoned chalice we might be handing on to future generations.

Apologies to Gerald whose totally inoffensive but stunningly accurate post was removed from Fridays Fulmination.

Lord Egbut

JC said...

The huge benefit of a retirement age of 60 is you finally got rid of aging socialists, aged drunks, the incapable, the uneducated, the bullies, the promoted beyond their abilities etc in many occupations.

Increasing the retirement age might make physical sense but does better health and vitality at age 60 - 65 equal better mental faculties and/or attitudes?

Theoretically an older and better educated workforce should become more productive but this isn't true for NZ.. which suggests we have problems to solve before we hold people longer in the workforce.

JC

Anonymous said...

Surely the wilfully uneducated, alcoholics, and incapable would have been weeded out long before sixty. As for hiring people over the age 55 whose politics you do like.....sorry, that one is well out of order.

Lord Egbut


Gerald said...

JC bit late.
At present forty percent on the pension are in employement and in the near future they will be the majority.

JC said...

Gerald.. I know.. I'm one of them. Theoretically we should be seeing good productivity from these older people but it doesn't show in the stats that I'm aware.

Last time I looked the better productivity came from our foreign owned firms with their better experience and management. What I don't know is how older workers would fit into a better framework.. would they really be better than younger and more specifically trained workers?

JC

The Veteran said...

Egbut ... Bismark's Old Age and Disability Insurance law of 1889 provided for a pension/annuity for those workers who had reached the age of 70 (not 65). That has to be measured against the fact that the median age for males in Prussia at that time was 45 skewered by a high infant mortality rate.

Those 'little NZrs' (as opposed to little Englanders) who claim that NZ was the first to introduce a system of State pensions are wrong. Rather, we were the first country in the Commonwealth (Empire) to do so. The Old Age Pensions Act of 1898 provided a means tested pension to a maximum of 18 pounds per annum (equivalent to approx $3,300 today). A recipient had to be of 'good moral character' (undefined) and Chinese were specifically excluded. I guess the latter restriction would find favor with Winston First today.

Adolf Fiinkensein said...

Not to mention Twyford, Vet.

Shelldrake said...

I like the idea 9F raising the qualifying period of residence for immigrants from 10 years residency to 25.the stream of elderly refugees tagging along behind the younger family members has gone from a dribble to a stream to a flood.

Noel said...

Sheldrake the rules
"are a New Zealand citizen or permanent resident, and
• have been resident and present in New Zealand for at least 10 years since you
turned 20, including five years since you turned 50."

Just when did this flood start?

Anonymous said...

Veteran.....that's what happens when you rely on memory. Dear old Otto's pension was a cynical attempt to curry favour before an election knowing it would cost the state bugger all. Male mortality was 37.7 at that time but if you remove the high infant mortality it was indeed 65.....hence 70 being pension age....it grieves me that I had to look it up.

Noel....those restrictions have been around for years and are a double edged sword as they affect citizens who for family or health reasons have to move off shore after 50.

A veteran who lived in the Islands was caught up in this draconian and quite stupid restriction.In the days of instant communication and information sharing it should have been ditched years ago.

Lord Egbut Nobacon

Noel said...

I understand your point but how can those rules allow a flood of "elderly refugees tagging behind younger family members" obtain Supperannuation?