Don’t mess with Superannuation

December 19, 2016

Tom O’ConnorTom O’Connor

Any change of leadership can bring a period of anxiety and uncertainty. I know that from the ripples which went through the Grey Power family when I was elected as national president in May this year. It took time and patience to assure people that their fears that some of the changes we introduced would be for the better. So far that has been borne out by results.

However when former Prime Minister John Key stood down to be replaced by Bill English there was a disturbing indication that the security of national superannuation could at least be under review. While John Key was in office he gave a solemn promise that national superannuation would remain unchanged. Like his policies or not we knew we could trust him and he was as good as his word on that important issue.

Within days of Bill English being elected by his National Party colleagues to be the new Prime Minister there were indications that he might not be as willing to leave national superannuation untouched. There have been no policy announcements and nothing more than vague hints but they have been enough to set alarm bells ringing.

We know that national superannuation has been under almost constant attack by all sorts of people and groups, including the Retirement Commissioner, for the past year or more. Some say it is unaffordable and others want the age of entitlement raised from 65 to 67. In reality the scheme cost something less than four percent of GDP and Government had not made any contribution to the fund since 2008. The scheme is obviously affordable now and would be more so into the future if Government honoured their part of the bargain and resumed contributions.

It would be unthinkable to raise the entitlement age to 67, particularly for those involved in physically demanding trades. While academics and those who have never worked with their hands and backs might suggest people in manual trades could retrain for new, less demanding, jobs in their middle years, the reality is very different, For starters the Government has stopped funding adult education schemes and, regardless of qualifications and work experience, it is nearly impossible for anyone over 50 to get a job.

Not all people over 65 are in financial trouble but a significant number, particularly those who live alone and only have national superannuation, live in near poverty.

We know there are parts of the scheme which need a review and some tidying up but the basic entitlements of a universal pension for all New Zealanders at 65 is out of bounds for political meddling. The deduction system for people with foreign state funded pensions who applied for New Zealand superannuation, after ten years residency, was generous and basically sound but there were a few anomalies which need to be addressed and we are working with the Ministry of Social Development on those matters.

We have a firm policy to retain a state-funded, universal, non-means tested pension payable at age 65 years and that is our bottom line. It was a proposal to apply surtax to national superannuation which gave rise to Grey Power more than 30 years ago and we need to be alert to any attempt to dilute what is already a meagre pension.

The Grey Power Federation would rather not get into a fight with Government as we achieve much more by working with them on many important issues but there are limits to what we will tolerate. If it becomes necessary to mount another public campaign like the anti-surtax campaign to protect national superannuation in the lead up to next years general election we will. Hopefully it won’t come to that.

Tom O'Connor
Former National President
Grey Power Federation

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