Government considerations for altering national superannuation settings will not see a change in the level of entitlements, and do not include proposals for means testing, Prime Minister Bill English says.
Speaking on Radio NZ’s Morning Report programme, English added to comments made over the weekend that the government was considering changes to national super. A full announcement would be made public “quite shortly,” once the proposals had been finalised by the government, he said.
English refused to be drawn on whether the work stream included looking at a proposal from United Future leader Peter Dunne in 2011 on flexible super settings, where people could opt for an earlier age with lower payments, or a higher age with higher payments.
“If we were going to consider it then we would be talking to him first about it,” English said of including Dunne in any discussions. United Future has been a National Party coalition partner over the last eight years. As Finance Minister, English in 2013 released a discussion document on Dunne's proposals.
English said the government was not considering a Maori Party proposal to lower the super age for Maori and Pasifika workers.
Asked whether the government would change super from being universal, and whether it could alter payments from being indexed to the average wage, English replied that “no one should be expecting a change in the entitlements.”
“We’re not contemplating and haven’t contemplated any change to the way national super is paid,” he said.
On means testing: “We have not considered means testing. You have a scheme there now…where there’s been extensive debate about means testing for some time. That issue has been settled many years ago,” English said. “New Zealand had 30 years of debate over means testing and came to the conclusion not to do it.”
Meanwhile, Retirement Commissioner Diane Maxwell welcomed English’s stance, saying on Morning Report that she had not had any inkling this was in the wings. Maxwell and her predecessor Diana Crossan have repeatedly made proposals for ways to alter the settings.
The Retirement Commissioner’s proposal includes no changes for the next 10 years, then raising the eligibility age by three months per year over eight years, setting it at 67 by about 2035.
There should also be a change to migrant eligibility from the current 10-year threshold, Maxwell said. Migrants to New Zealand should have to have been here cumulatively for 25 years before being eligible, she said.
Maxwell also called for government re-training and upskilling initiatives that would help people in their early 50s now to handle a rising age.
New Zealand First leader Winston Peters said there was no evidence to support a need to raise the age, and said the government should instead be focussing on the migrant angle raised by Maxwell.
Government coalition partner ACT said changes to super were unavoidable due to the rising population of people over 65.
Labour Party leader Andrew Little reiterated a Labour-led government after the 23 September election would not raise the super age.
“This Government has not put a cent into the New Zealand Superannuation Fund and that negligence is catching up with them. The fund now has a $20 billion gap because of National’s decision to stop contributions,” Little said during the weekend.
“At least John Key was unequivocal on this. Bill English has made it clear today he’s not bound by that promise. He’s signalling that there is now a case for change in the age of entitlement and I’m saying the argument doesn’t stack up,” he said.
“A Labour Government I lead will not raise the entitlement age for Superannuation and we will re-start contributions to the New Zealand Superannuation Fund. That’s a prudent and sensible approach unlike Bill English.”