By Bernard Hickey
Imagine the government's and the public's outrage if it was discovered that there were more than 80,000 New Zealanders who received wages, salaries and investments worth more than NZ$6 billion per year, but were also receiving a benefit from the government to keep them comfortable in their old age.
There would hours of talkback. Newspaper headline writers would reach for the big fonts and editors would order up grumpy editorials.
Politicians would thump their tubs in rage over the unfairness of beneficiaries receiving their own incomes and drinking heavily from the taxpayer's teat at the same time.
Yet that is exactly what is happening at the moment with New Zealand Superannuation and there is not a murmur of protest.
Income figures this week from Statistics NZ show that more than 80,000 New Zealanders over the age of 65 receive wages, salaries and investment returns. There are no numbers showing exactly how many receive both salaries and NZ Superannuation, but official estimates are that 98% of those over 65 claim the benefit.
There are 80,400 people over 65 receiving average weekly wages of NZ$737, while 35,100 were self employed earning NZ$597 a week. There are 318,500 receiving an average NZ$150 a week from investments.
All up they are earning over NZ$6 billion a year from their 'moonlighting' while 581,500 are also receiving an average of NZ$325 a week in 'government transfers', including New Zealand Superannuation.
The Government-paid superannuation paid to those 80,000 plus seniors are costing much poorer taxpayers at least NZ$1.3 billion a year.
Many of those receiving the benefit will be retired judges, politicians, chief executives, doctors, diplomats and lawyers who are well able to look after themselves from their own pensions or salaries.
So where is the public outrage?
There's plenty of precedent for cracking down on beneficiaries who are getting more than thought necessary to stay above the poverty line. Our Government has spent the last five years progressively tightening the screws on unemployment, domestic purposes and sickness beneficiaries to get them back out to work and off the benefits.
Its 'social investment' approach appears to have succeeding in capping the growth of such benefit spending.
Budget figures released this week showed spending on Social Security and Welfare in the just completed year to June 30 actually rose a relatively modest NZ$700 million to NZ$22.7 billion.
However, most of that was because the number receiving NZ Superannuation rose 28,000 to 613,000 as the population aged.
This apparent unfairness in cracking down on poor beneficiaries under the age of 65 and letting millionaires over the age of 65 receive a benefit is not challenged because of the widely-held consensus that the universality of NZ Superannuation is a good thing.
It's true that NZ Super is remarkably successful at keeping our elderly out of poverty. It is simple and easy to administer.
There is no great fondness for a return to the bad old days of means testing.
So why am I challenging that consensus?
This week for the second time in three years the Government's official adviser on retirement savings recommended a staged extension of the age of eligibility and a change to a form of indexation that would reduce the long term cost of NZ Super to the taxpayer.
The National Government slapped down the proposal within 12 hours and insisted the scheme in its current form, with retirement at 65 and the benefit for a couple set at 66% of the average wage, was affordable.
That's despite the advice of its own Treasury that the scheme, along with no other changes in tax and spending settings, would see Government net debt blow out to nearly 200% by 2060.
Young taxpayers may be ignorant at the moment, but they are not dumb in the long run.
They will eventually work out they were stitched up by the older politicians and voters in the first two decades of the 2000s and demand means testing.
That's a pity because a universal and simple scheme is good. It just has to be sustainable, which the current one is not.
Meanwhile, the simplest way for the enlightened rich retirees to do the right thing is to decide not to apply for NZ Superannuation when they have their 65th birthdays. How many politicians and Grey Power lobbyists would choose to do that?
Cue the Tui billboard.
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An abridged version of this piece was also published in the Herald on Sunday.
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