NZ First Leader Winston Peters has described his commitment to hold the retirement age where it is as a “top line, not a bottom line”.
His comments, made in an interview with Tova O’Brien on Breakfast this morning, came after Prime Minister Christopher Luxon told Newstalk ZB that NZ First and Labour were being “quite dishonest” by not facing up to the reality of raising the retirement age.
“I think just chucking it down the road to the kids and grandkids isn’t the right way,” Luxon said.
Luxon confirmed his party would campaign on lifting the retirement age but did not go into detail on the specifics. Luxon’s 2023 superannuation policy was to start lifting the retirement age in 2037, phasing changes in over time.
In a report late last year, Treasury said that to keep superannuation at 5.1% of GDP, the retirement age would need to increase to 72 over the next 40 years. An alternative it suggested was raising income taxes by a third or increasing GST from 15% to 32% by 2065.
“If New Zealand continues to delay change, we will instead be squeezing people born in future decades. The longer we wait, the greater the transition cost will become,” the report said.
On Breakfast, Peters was asked if he wouldn’t return National to power at the next election if they refused to back down on the policy.
Peters shot back at O’Brien: “Don’t tell me how to negotiate."
“It’s not a bottom line, it’s a top line,” he said.
“This is not going to change, guess why, because the elderly and the young, we've got to look after them. The ones in between, we've got to make all the great changes.
“We’re not going to change.”
Peters was asked if he was being “dishonest” by not committing to lifting the retirement age.
“Of course not,” he replied.
“This has been around for decades after decade after decade. Those people who are being dishonest are those who say they’re ‘not going to touch something, but we’re going to change the age before 2038’.
“If you change the age to 67 before 2038, you’ll have no effect on next year’s Budget, the next five budgets whatsoever.”
Peters said superannuation only made up 5.2% of New Zealand’s GDP, “half of what other countries are striving to combat”.
“So, it’s not the problem at all.
“I’m saying to those MPs and Members of Parliament, and dare I say it, other parties who want to interfere with this commitment to the older people of this country, who now number almost a million, my answer to them is if you can’t run the economy, get out of the way and let somebody who can run the economy.”
Asked if there could be changes to the Super Gold Card, Peters said: “Stand back and watch, it’s coming very, very shortly.”
He then pointed his finger at O’Brien: “There’s great news, you can relax. We’re going to look after your mother and father properly.
“We’re looking after grandmother and granddad so you can go off and do your job and work hard.”
O’Brien replied: “Thank you for your services to my grandparents and my parents.”
Peters said he liked the idea of free GP visits for Gold Card holders, and said his party would “revive” the policy.
“If they get a free GP visit and it saves 3% from going to hospital, straight away you make a saving.”
What can actually be done?
ANZ Chief Economist Sharon Zollner and Retirement Commissioner Jane Wrightson gave their thoughts on the different options as a 'complicated, slow-moving train wreck' approaches. (Source: Breakfast)
ANZ Chief Economist Sharon Zollner told Breakfast there were “various leavers you can pull” to make superannuation affordable, but “if you just pull one of them, then you need to pull it quite hard”.
She said raising the age to 67 would “not really” make a big difference to fiscal sustainability.
A “combination of different options” would likely be more practical, but none were attractive.
Means testing was one of the options Zollner suggested, under which pensions would go only to those who need them.
“The main advantage of means testing is that, of course, you’re not giving money to people who patently don’t need it,” she said.
“A main disadvantage is that it reduces the disincentive to work and even to some extent, to save.”
Another option could be indexing super payments to inflation rather than wages.
“On average, inflation is lower than wage growth, so over time those savings could accumulate as well.”
Ultimately unfairness, especially for young New Zealanders, was already “baked in” to the issue.
She described the whole situation as a “complicated, slow-moving train wreck”.
If Treasury’s report is followed and the retirement age is increased to 72 years, Retirement Commissioner Jane Wrightson said it would “detrimentally” and “catastrophically” affect women, Māori, Pasifika, and those in labour-intensive industries.
“The problem with retirement income discussion is that it tends to laser focus on just one thing, and as Sharon said, there are a number of levers to pull, and we have to look at NZ Super and KiwiSaver together alongside any other things like Government incentives, maybe even tax.
“We’re not serving New Zealanders well if we don’t do this once and do this right. One intervention is not going to solve problems.”
Wrightson wanted to see a “grown-up” and bipartisan conversation
“Intractable nothing will change is not very good, intractable blow it all up is also not very good.
“The question is what’s good for New Zealanders, and if we can get at least the major parties in a room behind closed doors to start thrashing out some of these issues and come to a more agreed long-term plan, that would be the trick.
“There is no simple answer here.”
The morning's headlines in 90 seconds, including Winston Peters fires back amid superannuation debate, the Māori Queen meets Prince William, and Sir Rod Stewart’s serve at Donald Trump. (Source: Breakfast)
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