Opinion: Amanda Morrall looks at the ticking time bomb of unsustainable NZ Super and asks why the govt isn't doing something, anything, to address the problem?

Opinion: Amanda Morrall looks at the ticking time bomb of unsustainable NZ Super and asks why the govt isn't doing something, anything, to address the problem?

By Amanda Morrall

No one likes to think about retirement, least of all Prime Minister John Key.

Anytime he is questioned about what the government is going to do with the ticking time bomb of too many retirees, living longer than ever, putting exponential pressure on the health care system and NZ Super, he dismisses the issue with a polite smile and wave, and tells us he's got more pressing matters on his mind.

In part, I can understand why he is not worried. Because when the bomb explodes, he'll be a footnote in political history and enjoying a pretty cruisy life in retirement --  probably at his luxury "batch" in Maui so he can avoid the angry cane waving mob at his doorstep.

Also, let's face it retirement is grim because it's one step closer to death. You get old, you get sick (unless you're genetically blessed) and you become a social pariah because you invariably start to sound like a broken record. Of course, that's not everyone's fate in old age, and some old folks are lovely to be around, but generally that's kind of the pattern.

Okay, so it's not a sexy subject but we're all headed there. It's just not all of us, (re most of us) won't be enjoying high tea at the Waldorf Astoria or watching the sunset from condos in Maui.

How about a pension at 80?

Just last week, the Canadian government in its latest budget bumped up the age of retirement for the Old Age Security (their version of NZ Super) to 67. It won't happen overnight, it'll be phased in slowly, clicking into place in 2020 or thereabouts depending.

In the United States, their pension age is also shifting to 67. It's the same in Australia and also the United Kingdom, which is taking it ever further progressively sliding it to 68. They're even talking about setting the age of retirement to longevity which would mean that a child born this year, wouldn't be eligible for a state pension till 80.

What are we doing in New Zealand? Diddly squat.

For years, the Retirement Commission has been waving red flags and yet our personally well-provisioned PM - who has even said he'd rather resign than raise the pension eligibility age from 65 - continues to kick the proverbial can down the road hoping for the issue to die and for Diana Crossan and her report wielding posse to stop pestering him.

In the face of alarming projections showing the cost of the New Zealand Super to be frightfully unsustainable due to ballooning demand and not enough working age taxpayers, Crossan has proposed the age of retirement gradually be raised to 67 as well. (See the RC's full recommendations here).

Effectively, it would mean that  something who is 45 years old today, wouldn't retire till 67. The move, according to the Retirement Commission, would lower the projected cost of New Zealand Super from about 7.3 per cent of gross domestic product to 5.3 per cent in 2035. Currently, around 4.2 per cent of GDP goes on NZ Super.

Crossan also proposed a few other adjustments to make NZ Super viable for future generations but they've also been dismissed.

Why? Crossan can't get any straight answers from Government. 

So what does it mean?

What does this mean for you and I?

What it signals for me, and I'm 41, is that NZ Super, in its current form, is toast. It's bound to be less than it is now (which is around $14,000 each for a married couple and $17,000 an individual sharing accommodation) or it'll be late coming,  67, 68 or possibly 70.

According to Treasury projections, the number of recipients of NZ Super will skyrocket from 500,000 in 2010 to 1.3 million by 2050. Over that same period, the number of 85 year olds will see a five-fold increase. 

That means I'll have to pull up my savings sock up, and fast.  

I'm in KiwiSaver and contributing 4% but that's not going to get me there to enjoy the kind of lifestyle I fancy in retirement, which isn't really all that fancy but I do like travelling and getting my hair professionally cut.

I fully expect to be working past age 65 and thankfully I don't dig ditches for a living as I can't imagine doing that at 70. My biggest risk as a writer might be my fingers curling up from genetically inherited arthritis so I could be tapping out columns with my toes or nose.

It also means that I will need to stay in good nick because the health care system, in current form, won't be nearly as generous. That too is unsustainable. Expect a Ford, not a Cadillac when it comes to medical services.

According to a recent C.D. Howe report out of Canada, annual health-care costs for a person over 65 are three to four times greater than for someone under 44. For a person over 85, they’re 12 times greater. By the 2020s, it is expected that nearly 17 per cent of Canada’s GDP will be spent on health care – up from 12 per cent today. I expect New Zealand will be similar.

Way more old folks than kids

Fast forward to 2015, and there will be 60 per cent more elderly folk (over 65 years of age) than there are children. That's by Treasury's own calculations I should add.

Mercer New Zealand, which has authored several reports on the looming retirement crisis, suggests an effective retirement savings scheme will have three parts to it: a government funded pension (altered from its current form), savings via the workplace (KiwiSaver or another scheme) and personal savings.

Mercer also believes working past 65 will be a matter of fact not choice.

What that also says to me is that you should be in a line of work that you enjoy, because life's going to be too long to hate what you're doing.

Don't worry about me John Key, I've got a plan B. What's yours?


*Fixes NZS rates for individuals and couples.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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John Key will carry on in the private banking sector, as an advisor/insider once he has made Goldman Sachs et al. even more powerful and profitable.  Don't worry about John Key, he has a plan A, B & C, and it doesn't include you, or your comfort, health or well being.  And that is what it takes to be a true politician.

IF you have a time horizon past 2050 there are pleanty of elephants in the room.  I'm sure our kids will thank us for being responsible.
If the most optomistic oil/gas/coal resources are available we will cook ourselves in CO2/3.
Thats presuming govt's buying their own debts is sustainable, and can keep capitalisim alive for that long.
We are destroying the natural world and consuming the remaining resources in exchange for fiat money— which will be worthless when the resources are gone.

Please listen,  from 2:00min it really gets interesting: http://www.youtube.com/watch?v=AtgfzzwoyK4

yes Cheers Walter I've seen Carlin going this way for some years now...it is good he is now using his celebrity to inform these days ,.....Dennis Leary will go the same way.
 What is necessary from Carlin to  the 99% is to NAME Names.....the people simply know it as some vague club of the elite and so any frustration or anger is either misdirected at Puppet Muppets or just  dwindels into apathy.....
 Naming of Names Walter.....specific targets employing specific agendas to keep the people occupied and ignorant.

Don't expect to hear much more from Carlin
George Carlin - Wikipedia, the free encyclopedia

Yes skud ...ah well! when they come for you  it's always out of a clear blue sky......still eh.

You know why Key made the " I'll resign before I raise the retirement age" promise Amanda.
It was to keep Winnie out of parliament and it would have worked if Labour had not raised the issue in 2011.
Thats the problem. With an MMP system and an increasingly aging population any politician who wants to campaign for the Grey vote by bribing old people with their kid's money can control the balance of power.
What is needed is for someone to mobilise the under 40's in a single issue way over the super elegibility issue ( like Winnie does with the over 60's ) and have some bargaining power after the next election. If the nats get the most votes again but cant rely on Peter Dunne they would have to do a deal with whatever party had campaigned on responsible super policy ( maybe the Conservatives who are looking for the family vote )  and Key could say he had no choice but to make the changes necessary to form a government.  Not sure how it would work in reverse if labour leave the elegibility changes as part of their platform but need NZ First to form a government. They would presumably have to back track.
We could have national campaigning for the status quo but making a change to get a deal and Labour campaigning for change but leaving the status quo to get a deal. Go figure.
There will be changes made at some stage Amanda and you are right, it wont just be to Super. I spent some time being a fairly regular visitor to a medical ward in a provincial hospital a few months ago and there hardly seemed to be anyone in there under about ninety. That is inevitably the future and it will be very expensive.

I still stand by capping politician salaries, so it becomes a public service job rather than a "public service"-make-myself-rich job. Would be interesting next election if the conservatives can get some seats, 5th largest portion of party vote last election wasn't it?

Single alone is $18143.84 net according to the govt site!

Hi Wolly. Yeah, sorry my numbers were a bit off... payments are convoluted and depends on living arrangements. See below. If you are single and flatting it's a bit higher...some couples say they should split up and live as flatmates to get a better rate. 
Here's the rates.

Single - living alone



Single - sharing


$16,748. 16

Married, civil union or de facto couple

-  both partners qualify


($268.40 each)


($13,956.80 each)

Married, civil union or de facto couple

- one partner qualifies and the other is included *


($255.09 each


($13,264.68 each)

Married, civil union or de facto couple

- one partner qualifies (and the other is not included) *


($268.40 each)


($13,956.80 each)


Don't you go worrying yourself none Amanda.

I'll be encouraging my son to become a gp, dentist or optometrist.

That's a sick, hard-to-swallow, myopic comment.
They'll only be able to earn what the masses can pay.

Which is what happens now.....private healthcare is simply un-affordable...but then if you only need to treat the top 1% as they have enough $s, who cares?

get a life you tosser.
What's sick about encouraging a child into a career that will genuinely be in demand, and helps people?
you talk so nobly about the environment, yet you live on a lifestyle block and swan around the pacific, presumably funded out of a life living and working in an economy you now ridicule
oh how easy to preach to others about their unsustainable lifestyles when you've set yourself up very comfortably.     
sorry for the rant all

No probs Matt I. A....even I thought it a bit uncalled for and uncharacteristicly provocative of PDK.
 over the top really. 

...... or get the lad into a  trade , Matt ....... sparkies , chippies , fridgies , & bog snorklers are always in demand .......

I.T. Matt.... virtual servers......if he likes the pooter start him young.....my son commands
120 /150k  contract  here, soon  off to Californio.... loves what he does ..soooooooo Bonus!!.

Big brother ( Grumpy Bear Hero ) is a GP , but he doesn't recommend it ...... he reckons Veterinarians make just as much munny , and it's a lot less stressful when a patient pegs out on you ........
...... given the particular species of some pets , you may even be able to fire up the BBQ and cook 'em  if they die .....
You can't do that so much  to human patients of GP's , ...  so I am informed ......

Nice work Matt, glad to see someone put that holier-than-thou hypocrite in his place.

Amen to that !

Obviously, such  functions as perception, thinking or sense of humour are disabled in power down mode :-)

Audiology is the way for your son to go Matt  My last pair of hearing aids, both of which would fit on a teaspoon together, cost nearly $9,000!


Electrical engineer or biochemistry - solar energy is our only hope or perhaps geothermal geotech

However the military will require medics

Far better to teach them that nothing is true (including everything I say), and how to be comfortable with that.

The sad reality is key doesn't give a toss about the future, only the here and now (or at least the next election). But that's just typical of the nats. Its only labour, whether in nz or aus, that has had the balls to make the big futurist calls. I'm not necessarily a fan of the clarke regime, which i think was more opportunistic than visionary, i am thinking of lange and douglas, keating and hawke, gillard and swan

You look much younger than 41 Amanda

That's an old pick up line! 
Anyway, forget about encourage your son to become gp,dentist etc..  I will encourage mine to marry someone rich!

 No !  ... credit where it's due , Amanda does look much younger than 41 years ......
... about 3 to 5 weeks younger  I'd say .......

You need to update your preconceptions as to what 41 looks like these days

.... yup , my bad ...... 4 to 7 weeks younger than 41 years ?

gees GBH could you get here earlier for some banter...!
I got's to go now ,an I'm gonna miss all the fun....consarn it.
 Ave a good one matey..! 

...... you're 2 and a half hours ahead of me , Count ..... I'll get back to bantering avidly when we return to Godzone , circa 2013 / 2014 .......
Life is kinda slow around here in the Aussie boondocks ........
....... the tree fell over in 1873 , ..... and they still reminesce about it , in the village .......

He can't marry his mum Chairman M.......!
 And you Matt in A.....dear oh dear..!  uh I'll bet you slay em in the bars.


LMAO...Chairman M....go well !.

Well for me this is the comment of the day, week ,month ,maybe year yet..!
In part, I can understand why he is not worried. Because when the bomb explodes, he'll be a footnote in political history and enjoying a pretty cruisy life in retirement --  probably at his luxury "batch" in Maui so he can avoid the angry cane waving mob at his doorstep.
                                                                                                                         Amanda M.
No need to even question the probability of that statement..I'd say it's a dead cert....unless Walter gets clear.

Because his job depends on people like these:

As Nicole Foss pointed out, the overhang is so huge, the lack of underwrite so short, that in reality there will be no pension, whasoever, within 10 years.
Whoever is in power when that wee bomb-shell hits, won't be shortly.

Quite right - in some respects the larger the contigent liability and less we should worry because it can never possibly be paid.

The bastard of it is, its not so much the no pension bit but that there is also huge questions on how you will continue to have a job at that time...
Something I argue aoer with my parents as they dont think I have enough pensions/saved.....my answer is I need to clear debt and frankly I think its unlikely my privite or public pensions will ever deliver....so whats the point of pouring more into them (or similar)?

A number of points.
1.  The issue is not party political, since first established in 1898 no party has funded Super on an actuarial basis until the Cullen Fund in 2001.
2.  It is unfunded and therefore will fail in it's current form.  Therefore extrapolating current funding levels into future liability is of limited use - it will never be paid (in the current form).  
3.  Obviously the National party believe that a government who changes Super won't stay in government (at this time).  The root of the problems lies in the constituency and not the prime minister of the day.
4.  Even a cursory accoounting glance suggests all cut back options will probably be done.  Therefore it will be means tested and the age will drift up and increases will slow or stop in real terms (inflation adjusted).
On a philosophical note.
No society founded on the idea that somebody else owes it a living is going to stay healthy for many seasons.  Inevitably all rights and no responsibilities rot the moral base.

"No society founded"  ithink of it as an extension of the old system where the oldies exist within a society....it isnt about individuals....individuals have an even shorter life expectancy than those in a community...so welfare/oap is really one stage removed again...yes there will be big changes, but anyone who thinks primarily like a libertarian isnt going to do to well me thinks.

Lest we forget , another government ruled the roost from 1999-2008 , and they too , ignored the retirement commssioner's advice ......
...... now that those folks are in opposition , what is their retirement policy , should they regain office in 2014 ?
There are two major political parties in this country , both burying their heads in the sand over this issue .........

Huh? what the hell was the Cullen fund then?

That was predicted to only reach 14 % of the annual cost of the NZ Super obligation , at it's maximum ........ still leaves a shortfall of 86 % .......
........ and then Bill English decided to stop piling money into it , at the market bottom ...... at the very point where he should've been loading it up big time ......

Borrowing money to put in the NZSF simply changes the nature of the burden on future generations - they have to pay back the debt, rather than having to pay taxes to fund Super.  The only money that should be invested in the NZSF should be that which is genuinely paid by those who will eventually benefit from it, ie today's taxpayers from a Government budget surplus.  Which is what National have said they'll do.

Your (1) and (3) are contradictory.  Means testing actively disincentivises work and saving, as well as creating non-productive work for accountants and lawyers devising ways of avoiding it which lead to resource misdirection.  And there's no need to incentivise people through tax breaks to work longer - there is already an incentive to work longer, which is that you get paid for it.
Your (3) and (5) are also contradictory - do you want older people to work longer, or not?   You're completely wrong about creating work for younger people by stopping older people from working.   Even if you don't believe economic theory and therefore don't accept the lump of labour fallacy argument, there is no example anywhere of an economy successfully and sustainably creating work for one sector of society by preventing another sector of society from working.
Your (2):  fine, if you are prepared to accept the political and social consequences in terms of old-age poverty, including for women who have spent time raising children, looking after their elderly parents etc instead of in the workforce.  Note that people who have not spent a lifetime working and paying tax are already considerably worse off in old age than those who have - they don't have as much savings and other accumulated wealth.    
Your (4):  you'd have Government paying more to fund the retirement of high-income earners than for low-income or no-income earners? 

Let's not forget the other ticking time bomb that the Government ignores - increasing rates of obesity especially in young people. What that means is that the decreasing pool of taxpayers expected to fund the babyboomers' retirement may spend a disproportionate amount of time sick and unproductive, and could also compete with the oldies for those precious health funds.  
It is a potentially grim scenario which doesn't bode well for future generations. Yet, unless we do something to counterbalance the huge voting block that is the baby boomer generation, it will be difficult for even the most well-meaning politician to make meaningful changes. 
Here's an idea: all NZ citizens and residents should have a vote; including babies and children. They don't get the right to exercise that vote until they are either 18 or they pass a civics examination at NCEA 2 or 3 level. In other words, a parent or guardian votes for them until they are mature enough to do it for themselves.  
Parents tend to be more focused on the fate of future generations, as they address on a daily basis issues relating to their kids' education, health etc.  They are more likely to be responsive to policies pitched in favor of them and their kin.  
The idea of a civics exam would be in lieu of lowering the voting age to 16 years - let those that want the right, earn the right. It would also add civics studies to the school curriculum and perhaps lead to a more politically astute generation of voters. 

Extrapolate the implications of that out as far as you can go takes you to a dangerous place.

How so? All we're talking about is one person, one vote. 

NP - nice idea, but my experience is that selfishness-via-denial-of-unpleasant-fact is the norm.
That said, your idea has no downside. Why not add history, geography, biology, physics, and the fallaciousness of fiat finance?  Critical literacy too, for good measure.
Heck, just give 'em World3, hold the exam.

Maybe, but the selfishness would be associated with what's good for me right now - which in the case of parents with dependent children, is more than likely to extend to the kids too.  in the short term, that could counter balance the baby boomer selfishness, which will be tied up with impending retirement (and would include the grand kids, but not with the same immediacy as when they were parents and inventing the Baby on Board signs for instance)

Please provide the scientific and medical evidence that shows that obese young people spend a disproportionate amount of time sick and unproductive.

Until you asked that question I would have thought that it was "generally accepted" that obesity and diabetes and shortened life expectancy go together. But I cant provide authorities.

But that's not what I'm asking. NP said that young obese people are disproportionately sick and unproductive, but I'm not aware of any published studies in the literature that has examined and established that as a fact. But I may be wrong and such studies exist. What I am aware of though is that the obese are discriminated against in employment opportunities and this prevents them from accessing high paying jobs regardless of their educational background. This results in the obese being disproportionately poor, and poverty is related with poor health outcomes.
As for obesity and diabetes, obesity doesn’t cause diabetes; it’s associated with it, but that is not the same thing as saying it causes it. Most obese people are not diabetic, and will not develop it. Old age is also associated with the development of type II diabetes and the health depts own modelling suggests that around 25% of diabetes cases in NZ will come about due to the aging population. At the moment, around 50% of NZ’s population is overweight or obese, yet less than 10% is diabetic. 50% into <10% simply does not go.
Diabetes has a very strong ethnic component which is not fully understood. In New Zealand’s case, there are very high rates among Polynesians and Asians (esp. Indians) where the rates can rise as high as 40-50% of the population being diabetic or pre-diabetic. This is not the case with ethnic Europeans. Europeans appear to have some genetic protection against developing type II diabetes and again the reasons behind that are not fully understood. Diabetes rates in NZ Europeans are around 5% from memory. It used to be 3%, but it has gone up. If you think a condition where over 90% of the population will not develop it during their lifetime is an epidemic well good luck to you. But I see it differently. A major burden and costly problem among NZ’s Polynesians and Asians, sure is, but among Europeans, not so much.

Thanks for those Gibber, but none of those papers are actually relevant to the issue that the young obese are unwell and unproductive.
The first paper examines the effects of obesity on longevity, which is already well established that the obese live less, but not as much as you think. All that paper is saying is that the relentless increase in longevity witnessed over the last centuries may stop and reverse due to obesity.  It doesn’t say that the obese are all going to suddenly start dying in their 40s, which should be evident to you that they don’t.
The second paper is a review on the consequences of childhood obesity. I haven’t read it but bit appears to say nothing more than the obese children are also at risk of developing many of the obesity associated diseases seen in adults, and or are at risk of developing those conditions later in life. Again there’s nothing new that specifically address the issue that the young obese are unproductive and unwell.
The third Nature paper is interesting as it’s considers the effects of obesity early retirement. What it did find was that there was no association between obesity and early retirement in white American women. In the study, 20% of the studied group took early retirement, and of that 16% did so for health reasons (obesity? It’s unclear). 16% of 20% is 3% of the study group may have taken early retirement because they were obese. Many of the analysis did not show any statistical significance.  And extremely interesting study, thanks for bringing it to y attention, but preliminary. But again the issue of the young obese being unwell and unproductive is not addressed.
The fourth study comes closest. It reviews the effects of hypertension on health and productivity among other things, and highlights a study that shows this is rising in young people and adolescents due to increasing rates of obesity. As hypertension is linked to days off work this may show that the obese experience more unwell and unproductive days, but this study doesn’t specifically address that, or undertake a proper study.
Just going to the internet and dredging up a bunch of papers without carefully and thoughtfully reading them will more often than not not be very helpful.

Hmm, I came across a study last year that threw doubt on obesity and diabetes being linked....think it was looking at the Indian sub-continent........where they were all "skinny"....yet there was diabetes....

Maybe the obesity  threshold  that tips people into diabetes is different in different ethnic groups

Sorry David B, don't have that evidence.  I'm leveraging off Doctors and health professionals who have waxed lyrical about the problem.  My point was that not only are we facing a possible future where the ratio of taxpayer/ pensioner will be significantly smaller, but the quality of taxpayer may also be reduced due to sickness and consequential lost productivity.  My other point was that to the extent that this is a ticking time bomb for our youth, it is also being overlooked by politicians.  

No worries, I agree a lot more needs to be done around obesity in this country. The challenge I think is getting an understanding of the biology/ environment interface (the causes) correct, so that that can inform both public and social policy and medical practice in a way that brings about meaningful change. We are not there yet, which is why the population is still getting fatter and fatter.
Another challenge is that there are a lot of negative prejudices and attitudes around obesity, its causes and consequences, which are held very dearly by the society at large. Doctors and researchers are not immune from those prejudices or their influence, and the question then becomes how do these then shape the research questions that get asked, the design of studies and the interpretation of the data, and the conclusions that are drawn? Moreover how do these manifest themselves in medical practice and influence a doctor’s decisions? This is one of the tough issues around obesity research and treatment, because it is two things simultaneously, a serious medical condition, that comes heavily laden with attitude.

Hey..you get off Gerry's gut....aint his fault....

David Lange didnt get to pick up any super. Died at 63. Then again his was bigger.

That's a fair point icono   ....   the healthy do best    ....     no fags and less booze....careful to opt for the best DNA.....avoid the killer occupations....stay fit...well sort of fit....drive safely..reap the dividend.

That's right. So this obese New Zealanders cost to the NZ taxpayer was less, not more. Correct? And in actual fact that is what the research is increasingly showing. The lifetime spend on the obese is actually less, because they collect a less superannuation.
Although did you know, it's only the superfat who smoke who experience a large number of years lost due to obesity. And even then it depends on how long they have being fat for. And do you know how many years they lose on average? 14.

please provide a link to the research that proves your point about the super fat
And... If they stop work early due to health issues have you considered the cost of sickness benefit instead of super?

Fontaine K.R., et al (2003) JAMA. 289(2):187-93.

Well....   A 2003 article that doesn't prove your case one way or the other.  I was expecting a more recent article given the plethora of research that is done into diabetes and obesity each year.

Well the biology hasn't changed, and neither presumably has the effects of obesity on longevity?  That was an extremely large, robust and well designed study that specifically addressed the question, how many years of life are lost due to obesity? It did not examine some other question and then try and stretch that answer to cover how many years of life are lost due to obesity. That often happens and it is very frustrating in my view. The NEJM paper up above which you quoted, examines the effects of obesity on longevity at birth of the US population, which is a very different question.
The answer actually is, whether people want to believe it or not, is that the number of years of life lost due to obesity is not so much. It’s significant, up to 10-15 years depending on smoking status, level of obesity and duration of obesity, but it’s not decades unless the person is massively obese (BMI >55) and has other health problems. Interestingly people who are overweight, but not obese, are the ones who live the longest.
I found this passage in your NEJM article very interesting.
“Assuming that current rates of death associated with obesity remain constant in this century, the overall negative effect of obesity on life expectancy in the United States is a reduction in life expectancy of one third to three fourths of a year.”
Check out Figure 1 in the article.

2010 publication - Lower impact publication, but supports the notion that unless BMI is high, mild obesity does not reduce lifespan significantly.

DavidB: A bit of trivia. I met David Lange when he was in his 20's and he was twice the size he was later in life. Massive.

Yeah I know, I've seen photos and he was enormous. I also knew a person who flatted with him when in his younger days, and said exactly the same thing.
David Lange had a gastric bypass operation which is how he lost the weight he did lose, but I worry about the long term consequences of those procedures on life expectancy of the obese. There are no studies that I can find that actually show if these operations extend life and are safe 20, 30, 40 and 50 years down the track. Some of them lead to serious nutritional deficiencies as much of the absorption of nutrient from the gut has been lost. And I wonder what the long term health consequences of being in effect, semi-starved, is?

If I remember correctly the "big-guy" Bernard Hickey has undergone that procedure.

Big Norman Kirk didn't get to collect his pension either , dead at 51 from heart-related illness .
...... in those days the PM's seemed approachable , human , cuddly .......
Then we got Rowling / Muldoon / Shipley / Clark  , and the rest is history ....  sadly ...

To give Cullen/Clark their due they did have a plan to deal with the Super issue.
I am not sure the Cullen fund had much to do with it. I always though Michael Cullen's idea was to lock some of his surplus away so his crazy caucus buddies did not spend it.
The cunning plan with Kiwisaver seemed to be to get lots of people in it with decent balances which would make it politically possible to means test super in some way down the track. Labour looked to be going further along that path at the last election with the policy of compulsion for Kiwisaver. Means testing is the logical extension of that.
Anything done with with super has to be done deviously. That is the political reality.

It occurs to me that I was perfectly content in nonexistence for billions and billions of years, until, without my permission, I was born, and forced to survive.

NDOTKEN......quiet the blogger.....Skud...now I know that's not you with a grocery bag on your head .....just so not you.

  • Almost everyone has a tendency to imagine the mind continuing to exist after the death of the body.
  • Even people who believe the mind ceases to exist at death show this type of psychological-continuity reasoning in studies.
  • Rather than being a by-product of religion or an emotional security blanket, such beliefs stem from the very nature of our consciousness.

Bernard Hickey goes on holiday and passes the knapsack and baton to Amanda. Thought it was a repeat of Bernards theme of "flogging a dead horse" (to quote christoff). Googled it and sure enough, done to death.

If I remember rightly superannuitants had to pay a super tax in the late 80s early 90s for incomes over X amount.  My mother had an income of approx $21,000.00 and had to pay a super tax on her income over $17,000.00.  There was a hue and a cry and the Nats abolished it.
And Amanda, apparently being over 60, and being widowed or widowered, is the happiest stage of your life. The 40s is the unhappiest!! 

It's great that there is still someone here that can write doom and gloom.  Take note the rest of you journalists, you too could be dining on horse, snails and frogs by writing articles that generate a cajillion responses in minutes.

I don't know why anyone would ask a poitician what are they going to do about pensions!! That is the crux of the problem, expecting politicians to fix every thing. We don't have a robust economy because we have too much government.
In my opinion, the future will be rosey for those who look beyond what the government says and does, they are a side show we have to live with, but take no notice of. Governments only do what will get them re-elected. Unfortunatly they can bugger things up for us and regularly do. So you must find trends outside the influence of the meddling classes, trends that will continue, albeit with some ups and downs. One such trend is the world population growth, or the development of under developed countries. Buy the trend and stick with it. Buy hard assets, that do well with inflation and buy cheap, to quote from Jim Rogers, "wait to invest when you can walk acrross the room and pick up the money" This is what I am talking about: http://j.mp/HkE2yD

Old age security in Canada is not the pension but a "top up" for low income or no extra income retirees.

Also in Canada you can take your pension at 60...my dad did and he has lived on it for 17 years.

Also in Canada you can take your pension at 60...my dad did and he has lived on it for 17 years.

One thing that stands out to me is that we have a raft of retirement provisions that run in parrallel but without out any rational reference to each other.
1 Basic Superannuation
2 Kiwisaver
3 The Cullen Super Fund
4 Employer supported private superannuation funds
5 Private individuals retirement savings.
Maybe a good place to start would be to consider all these in concert and provide some rational bassis where they can work together without undermining the motivation and reward for individual saving.
On a similar note and not entirely unrelated, the provision of health care is similarly fractionated with out any rational big picture framework where they can work rationally together
1 Government funded healthcare
2 Government funded hospitals
3 Private health insurance, Individual and employer paid
4 Private hospitals
6 Late life and end of life care facilities and funding thereof
All basic stuff really.  Makes you wonder what these dipsticks in Wellington have been doing for years.

ChrisM - They're referenced, alright. All reliant on a ponzi scheme called growth-based finance. The first 'equity' to vanish was the least resilient (finance co's) the next will be the next-least-resilient, and it has to cascade.
You forgot to add the likes of ACC, they're all investing in the same ship..

I don't see the retirement provisions as particularly irrational.  Increasingly burdensome on the public purse (though not nearly as much so as many other countries' retirement policies) but not irrational.  On the contrary, it's clear and simple.
Everybody gets NZS, which is currently wholly funded from general taxation (so is paid for by generations younger than the recipients) but which will in future be partly funded from the NZSF (so partly paid for by the same generation as receives it).
On top of that, you can, if you wish, individually prepare additional resources for your retirement.  The more you do that, the greater will be your later reward - there's the incentive.  There are different options available to enable and/or help you to do it, which seems appropriate given that everybody's circumstances and preferences are different.
Thus, the provisions work together to the extent that each individual wishes them to, which seems to me to be preferable to the Government deciding on a single, one-size-fits-all approach.

Life is like a bowl of All Bran
You wake up every morning 
 An it's there.......
 Now life's a piece of $h*t
 When you think of it
 life's a laugh and deaths a joke
 it's true...........................................................All together now
Allways look on the bright side of life....whoowhoowhiwhowhiwhowhiwho
Allways look on the bright side......of ...life.
Just feeling a little idle  today, is all.

i work in a team of 18 people of which 9 are over 65.
they all tell me that they have paid their taxes so they deserve the super.
problem is that they never paid enough taxes and now their super more than compensates them for the tax they are now paying on their wages.
what a bunch of greedy so and so's
it's all about me

Yep.....sort of....if you had a contract with someone wouldnt you expect it upheld? So their pension pays their tax, so OK....its neutral then....better than a loss.

All credit to you but.......where is the NZ governments incentive for the average NZder to save?
KS is NOT the answer, nor is it 'saving' when payouts and subsidies are nothing more than 'private' finance industry incentives/payoffs and government borrowing plus taxes via stealth to pay for the 'alleged' benefits.
How is keeping a criminal tax on savings called the RWT an incentive for example?
Why does government encourage consumer spending, loan indebtedness AHEAD of saving for example?
Why does government ignore REAL inflation and allow banks to continue printing money from NOTHING and then having the audacity to charge interest (p.a.) on this corrupt ponzi scheme style fiat monetary system?
Some of THIS needs to be said in public and on media by people such as yourselves. 
Yes......you will lose sponsors but gain some credibility and dignity in return.

Why is it any of the Government's business to provide incentives to save?  It's a private activity, delivering private benefits - why should public money be spent on it? 
You don't like KiwiSaver incentives because they are funded from taxes and borrowing - how do you think the cost of removing RWT would be met?
You say that the Government encourages consumer spending and loan indebtedness ahead of saving.  What do you make of the switch from income tax to GST which increased disposable income (so increasing people's ability to save and pay off their debts) and made consumer spending more expensive (so discouraging people from spending on consumption)?

Hey, I agree why is it the governments business AT ALL what i do with my money and finances?
Why is it MINE and YOUR business what they do with OUR taxes?
Why must government provide incentives or dis-incentives AT ALL?
Perhaps you can answer some of your own questions when you answer these?
I believe your questions are somewhat rhetorical, misleading and do not make any point

I did not mean to be rhetorical, misleading or to make a point - I was trying to understand your argument. 

  • I agree that it is not Government's business what you do with your money and finances - as long as you don't spend it on something illegal, or deliberately waste it and then expect the Government to support you.


  • Of course it is our business what the Government does with our taxes.  We all have an interest in Government spending our money in ways that will deliver public benefits as efficiently and effectively as possible.  Otherwise they are taking our money for no good reason.


  • I don't think the Government should be in the business of using taxpayers' money to provide incentives for people to save, since the benefits of private saving are private and not public.  

There, I have answered your questions; but I am no closer to understanding your argument.  Do you want the Government to incentivise saving or not?  Why and how?

Politicians don't want to get real with Super because they understand 'shoot the messenger ' very well.  Look no further than the electoral fallout of Carter's 'Crisis of Confidence' speech.  Nothing too controversial there, just the bald facts that the current generation could afford to ignore.
Our Super exists in the context of exponentially increasing technology which has allowed the owners of capital to blackmail their fellow man.  EG If you don't like the new conditions, in a global economy we can go elsewhere.  And man, have they.  Sooner or later that will morph to 'Sorry mate, don't need you no more, this here machine's my new pal".
Because government is unable to get its grabbies on the vast majority of corporate profits, because of a macro version of the above conundrum, it's solution is to push the reitrement age out.  No one is facing up to the reality of an economy in 2050.  What is it that a machine will not be able to do more efficently than a human being in 2050? And please don't tell me that small business is the answer.
We have a Science Advisor:  That's good; he's good.  We need a philosophical advisor, because whether a super scheme is sustainable or not goes to the heart of whether our mix of policies and beliefs is going to see us right or lead us all into poverty. We all know that our current policy and the current tinkering isn't going to cut it. But politicians have stopped worrying about their grandchildren long ago.
I hear people say that the owners of capital wouldn't drive us all into oblivion.  That's true, not in their lifetime.  But us old farts haven't got that much time left, just enough to squeeze yet more life out of the future.

It does not take a great deal of skill to have tunnel vision. Just looking at what you want to see and then using your bias to stir hatred.
Firstly you babble on about the cost of super without taking into acount taxation.
Secondly you assume there is going to be so much work around that people will be in a position to choose to carry on working - Yeah Right.
Thirdly you imply that although the super is unafordable the unemployment benefit is affordable (its either a benefit of some sort or mass starvation).
Forthly you imply that over the next thirty years there will be no improvements in medical science and so you compare aples with oranges because its suits your agression.
I could go on and on but what is the point your mind is glued in place with all that propoganda rubbish.
The baby boomers chose to build up state assets and your generation choose to sell them to pay off your debts. Remeber you keep harping on how baby boomer own houses and equities and so on. Therefore the asset sales MUST be to pay off YOUR debts. You can't have it both ways.
Ah, what the hell your all a waste of time, a bunch of sore loosers.

You're getting the cutest accent, Amanda - a plethora of "aboot"s coupled with the local "up-an-octave-with-a-question-mark" ending....

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