The Retirement Income Problem

Once again New Zealand is being subjected to more lies, damn lies and statistics. I've listened to the barrage of propaganda that NZ's universal form of superannuation is unaffordable and most of what I've heard is untrue or skewed toward an agenda.

That agenda is to raise the age of entitlement to national superannuation. Superannuation started out at age 60, then it was raised to 65, now NZ's incompetent Prime Minister, Simon "Bill" English, wants to kick-start another 'debate' on the issue. That's a coded message for lifting the age of entitlement to 67 or even 68.

Winston Peters, leader of NZ First opposes the move and good for him. He's said he won't allow any coalition involving NZ First to countenance such a move.

New Zealand superannuation is not a large sum of money for each person who qualifies, but it is paid twice monthly for their entire life from age 65 and even if they work fulltime and no matter how rich they are.

What New Zealanders are told when this debate arises, is that the population of those aged over 65 is going to rise to an unsustainable level and will become unaffordable. What is never mentioned is that this is a population bubble and when the cost will begin to fall due to natural attrition. Kiwis are left to imagine the cost remaining high indefinitely.

I've got a few suggestions and these do not involve changing the official retirement age of 65:

1. Allow people to retire earlier but receive less. A sliding scale could be used but anyone choosing the earlier option would not catch up to those retiring at age 65 until they were 70 (for those who chose 60);
2. Currently immigrants need to be resident for 10 years and no less than 5 of those over 50 years of age. Change that to 15 years permanently resident, no less than 7 years of which over the age of 50.
3. Anyone over the age of 65 and in fulltime employment cannot qualify for national superannuation but they can receive a tax credit at 40% of national superannuation (encourages staying in employment).

The following are macro policies the NZ government could employ:

A. Reduce the size of government. Halve it, that's the head count I'm talking about. And sink the cost of departments by moving them to the regions.
B. Own overseas infrastructure. That's right, when a toilet flushes in London, NZ gets paid. Or if goods are put on a train in the US for export, NZ gets paid.
C. Borrow.

Do these things.

[Update: Simon English has quickly followed up his comments by announcing the retirement age will rise to 67 by 2040. National has decided to screw over the young. Never underestimate National's pure greed, they always line their own pockets first. But even this shows English is an idiot, it's more decisions that are not really decisions at all. He did the same thing back when he was Treasurer in the late 90's with his pathetic and microscopic tax cuts (Helen Clark won the next election, everyone went to sleep listening to Simon the Sleep Inducer).

The policy as announced will exacerbate the brain drain as the young won't want to stay around to fund everyone's retirement but them, and student loans on top of that, as well as facing ridiculous house prices created by successive governments unwilling to do anything about it.]