New Zealand's political parties should reach cross-party agreement to ensure a stable future for NZ Superannuation, according to Te Ara Ahunga Ora Retirement Commission.
This suggestion comes in the latest in a series of reports on funding for the elderly.
The report reprises the Commission’s now well-established position that the age of eligibility for superannuation should stay at 65, in contrast with views it held earlier.
The report also asserts that funding for NZ Super can be afforded by the Government, also in contrast with earlier statements.
If extra money is needed, then some sort of means testing would be preferable to raising the age of eligibility above 65, it says.
However, the main thrust of the Commission’s argument concerns the political status of NZ Super, and it says cross-party agreement is essential.
“A long-term political accord is important to best serve citizens and there is an opportunity to secure this,” it reads.
“The Government should encourage Te Ara Ahunga Ora Retirement Commission to investigate the possibility of a new cross-party accord on the retirement income system to provide stability and certainty for future generations of retirees.”
These comments come amid the fact that the age of eligibility of NZ Super has been an issue at every election since at least 2014.
The matter came up again at the last poll, where National and Act both called for the age to be raised, though at different speeds. However, they were reined in during coalition talks by NZ First.
The Commission is unhappy with this uncertainty, and wants to end it with cross party agreement, so that a vital long-term issue for all NZ citizens is settled.
“A new cross-party accord is desirable, to not only ensure broad political consensus, but also to gain general public consensus as a result of the process of establishing the accord,” the Commission argues.
“This would benefit future retirees by affirming stability, and any system change of NZ Super should be well supported by strong policy principles and independent data analysis.”
At the very least, the Commission wants greater certainty through more effective use of existing law.
This refers to the ‘political commitment’ clause of the New Zealand Superannuation and Retirement Income Act 2001.
“Extending the number of parties who make the political commitment under the Act would be a first step,” the Commission says.
“This special measure allows parties to signal their ongoing commitment to current policy settings, and imposes special obligations on the Government to disclose whether consultation has taken place with other listed parties and the results of the consultation.”
But the report says only the Labour Party, the National Party and the Greens have used the political commitment clause under Part One of the Act, which refers to NZ Super itself.
And only Labour and National have given a political commitment to Part Two of the Act, which refers to the NZ Super Fund, which aims to raise money for NZ Super.
The report urges NZ First, ACT, and Te Pāti Māori to come forward.
In a further suggestion, there would be a detailed fiscal, population, and environmental impact analysis of retirement policies every nine years.
In summary, the report says the age of entitlement to NZ Super should remain at 65. But if fiscal savings are needed, then income testing is the best of eight options which were looked at.
It notes that in the 2021-22 year, 33% of superannuitants had taxable income over $30,000 and 6% earned over $100,000. Income testing could be applied to all the over 65s in this bracket or could be phased out when they turn 70.
The Commission is not advocating this, but raises it as an option in the event of a fiscal crisis. And it would be better than raising the age of eligibility, which it says would harm manual workers, women, Maori and Pasifika.
To maintain this, the Commission declares NZ Super is a Taonga, not a burden and it urges political accord to protect it.
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