Key won't budge on Super at 65 stance even if European situation deteriorates to point where govt needs to look at policy changes

Key won't budge on Super at 65 stance even if European situation deteriorates to point where govt needs to look at policy changes

By Alex Tarrant

Prime Minister John Key says he won't budge on his pledge to not raise the Super age from 65 even if the economic situation in Europe and around the world deteriorates to point where the government needed to look at policy changes.

Superannuation was currently affordable for New Zealand, and those who were talking about raising it, like the Labour Party, were talking about raising the age from 2020, meaning it was not a pressing issue, Key said at his post-Cabinet press conference on Monday afternoon.

Labour Party leader David Shearer earlier on Monday called for a cross-party solution to impending Superannuation costs over the next few decades, effectively locking in (again) his party's 2011 election policy to raise the age from 65 to 67 between 2020 and 2032, while allowing for people in labour-intensive jobs to still get Super at 65.

Key said there was not any real need for such a discussion at the moment.

“The major political parties went into the 2011 campaign very clearly laying out their economic prescription. We made our recommitment to hold the rate of Super at 65, Labour campaigned on raising that rate. The New Zealand public had a clear choice and overwhelmingly, they rejected Labour,” Key said.

“Even the Retirement Commissioner herself thinks that issue should be addressed in 2020. There are a lot of issues to address before then, and my view is, at this point it’s affordable,” he said.

An idea raised by Peter Dunne to allow for a flexible retirement age wouldn’t alter the fiscal liability faced by the government.

Dunne’s United Future Party’s coalition agreement with the National Party included a promise to look at his policy where someone could choose to get Super between ages 60-65 at a lower rate than the regular rate now, or choose to not accept Super until later and receive higher payments.

“It’s something that’s quite do-able, and in the end that’s a voluntary election by any individual. We wouldn’t be taking away any entitlements they have. If people want to choose to take more and retire slightly later, that’s their call,” Key said.

While there were challenges as to whether the policy was workable, but National was happy to have that discussion with Dunne.

Key said he was not intending to change his pledge of not raising the Super age from 65 even if conditions in Europe deteriorated to a point where the government here had to look at its current policies.

“If you think about the two things that Labour have been taking about – raising the age of Super, or a capital gains tax – neither of them would make an iota of difference in terms of any situation that may unfold in Greece," he said.

In terms of the retirement age, it would not be altered until 2020. In terms of a capital gains tax, that wouldn’t raise a lot of income between now and 2020.

“So in our view, they’re not the big issues,” Key said.

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He might get away with this. There might just be enough can kicking available for him to be voted out of office before the chop has to happen. Despite this head room it will happen.

I have commented at various times that Key sounds more & more like Muldoon every day.
 
All you have to do to this pronouncement is add "Rob's Mob" & it could have Piggy written all over it.
 

On one hand you have to credit Key with keeping his promise. On the other hand it was a really stupid promise.

Borrowing money to pay for welfare benefits, of any kind, is a stupid policy.  Unfortunately this is how NZ'ers elect their Governments i.e. who offers the most freebies.  Greece did the same thing for many years until they ran out of other people's money.  

No worries mate, we will just keep on selling houses to each other. Gosh, what could possibly go wrong!

More and better technology, less jobs--with or without a recession. Oldies locking youth out  of the labour market by necessity, and because they can. Baby boomers with viagra in denial aided and abetted by glossy magazines proclaiming we should all work 'till 105. 
The superannuation age should be dropping.  It can't because of the current turmoil, but that doesn't mean we should contemplate raising it (or even keeping it the same) without a clear indication that that is a crisis measure, not a new paradigm. Unless of course you still believe in trickle down.
People lose faith in necessary austerity when it's wrapped up and presented as candy.
New thinking needed.
 

I find concept of oldies locking out youth just strange...In IT at least I think younger ppl are preferred and ability counts for a lot....what sectors does this occur in?  Also why should older ppl be expected to retire at say 65? If Im still healthy I'd quite like to keep working til 70 say...mind you given the coming depression I dont think there will be a retirement for many....incl me.
It will rise and yes its a new paradigm...
Its not a Q of losing faith in austerity, its a case of no choice IMHO...
regards

I expect you'll be horrified to know it Steven, but any economist would agree with you.  Google "lump of labour fallacy".  There is absolutely no evidence from anywhere that pushing older people out of the jobs market helps younger people into it.  It's been tried, eg in Belgium, and failed completely. 

But the point is - and Key must know this - if you are going to raise the age of eligibility for NZS (note there is no "retirement age" in New Zealand), you have to schedule  that in advance.  So if the age is to be raised in 2020, the arrangements for that need to be made now, or preferably a couple of years ago. You  can't tell somebody the day before their 65th birthday that actually they're not going to get the NZS they were expecting tomorrow.

Funnily enough, in various European countries women are eligible for super about five years before men.  God knows why, it seems insane, particularly considering your point.  Just be thankful we don't have that craziness.