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.