By Alex Tarrant
Changes to New Zealand’s Superannuation settings may be needed after 2020, although further research is needed before a decision is made, Prime Minister John Key says.
Speaking to media in Parliament Buildings on Tuesday morning, Key stuck to his position that Treasury projections showed Super costs out to 2020 were affordable. However, he accepted the age of eligibility or other settings may need to be looked at after that.
The Organisation for Economic Co-operation and Development (OECD) this morning released a report which said governments with pension ages at 65 needed to consider raising them to 67 to ensure the benefit was available for future generations and affordable as populations aged.
New Zealand’s Retirement Commissioner Diana Crossan has suggested raising the pension age from 65 to 67 by two months a year between 2020 and 2032, a suggestion picked up by the Labour Party as its Superannuation policy. National's support partner, ACT, supports raising the age over a 12 year period, but wants the pension age to start rising before 2020.
Key has promised to resign rather than change the pension age, and noted Crossan’s suggestion was that the age should be raised from 2020, not now, in the face of Labour calling for him to change his stance.
Crossan said on Tuesday morning that any increase in the age needed to be foreshadowed well in advance to allow workers who would be affected by the rise to adequately prepare for it.
Yesterday, the Financial Services Council said tax rates in New Zealand may have to rise 28% over the next 50 years in order to sustain the pension age at 65.
A TV3-Reid Research poll last night showed 63% of voters supported the pension age being raised to 66 or 67. Of these, just over half supported raising the age sooner than 2020, if possible, while nearly half supported a post-2020 policy to raise the pension age. Thirty-seven percent of voters were opposed to raising the pension age.
Fifty-four percent of voters thought Prime Minister John Key should break his promise not to raise the pension age, and agreed he should set new rules now for an increase from 2020. The poll had a margin of error of 3.1%.
Changes "may" need to be made to settings after 2020, although that would be subject to "further analysis," Key said on Tuesday morning in Parliament Buildings.
In response to this morning's OECD report, Key said the different countries referred to all had different Superannuation systems, like in Australia where it was a largely private system.