Should there be a referendum on the future of superannuation?
ACT Leader David Seymour is challenging other parties to support a binding referendum to determine the future of New Zealand’s superannuation system.
"This is smart politics, maybe a bit too smart," says NBR political editor Rob Hosking.
"It makes John Key's policy of not lifting the age above 65 — when every other country with a state pension is doing just that — look like the gutless dodge it is," Hosking says.
"But it also gives Key an out, if a referendum votes on raising the age. If that happens, it will be good for the country."
Hosking says Seymour looks waffly. He seems to be calling for a referendum on a commission to look at the issue, not for a referendum on raising the age of entitlement. On this point, Seymour tells NBR, "Idea is to follow flag process: appoint expert group, have them lead effort to create alternative options. Have a vote on the preferred option, then a binding run off between preferred option and status quo."
With Labour arguing vehemently for raising the age above 65 at the last two elections, "Labour can't not support this without looking like a bunch of shallow opportunists," Hosking adds.
But although raising the age of entitlement was a central Labour policy plan in 2014, new leader Andrew Little has backed away from the policy, ironically citing the same argument as National leader John Key: that a lift would be tough on blue collar workers. One of the few concrete proposals has come from UnitedFuture leader Peter Dunne, who has proposed a system whereby people who retire earlier get less super.
If ACT does get its wish, it would not necessarily lead to change. As NBR has previously noted, both Labour and National have a history of cheerfully ignoring referendum results on issues from smacking to asset sales.
Mr Seymour made his call during his party’s annual conference, being held on Alan Gibbs' farm and sculpture park at Kaipara Harbour.
A last-minute ACT email invite cheekily noted Gibbs' 1000 hectare property had a capacity for 10 million attendees at one person per square metre. Conservative blogger David Farrar reports around 200 are at the conference.
“If the public can vote on the New Zealand flag, a matter that is largely symbolic, why not follow the same process for another intractable problem, one that politicians have been dodging for decades," Mr Seymour says.
“It is vital that we ensure NZ Superannuation is viable over the longer term, avoiding undue fiscal stress and pressure on tax rates, and achieving fairness across generations.
“National won’t address the issue. Labour tried and are now backing away. This is a political Mexican stand-off, with the guns pointed at the younger generations.
“Almost everybody realises that change must be made eventually. We are living longer, and the baby boom generation is starting to hit retirement age. On current settings the cost of NZ Super will rise from over 4% of GDP now to close to 8% by 2060, with most of the increase happening in the two decades to 2030.
“Policy must adapt to people’s increasing life expectancy. But there are other issues to consider and options to weigh, like provisions for those unable to work past 65, whether there should be some element of means testing, indexation issues, the relationship with KiwiSaver arrangements, the possibility of flexible starting dates for taking up superannuation, and the arrangements for new migrants and citizens returning after decades away from the country.
“The best option is, as with the flag referendum, to establish an independent body to consult with the community and establish a range of options on which voters can express a view in a referendum.”
Mr Seymour called for a cooperative approach on the issue, directly challenging each political party to support this process for resolving the political impasse of NZ Superannuation.
“In short, let’s resolve this Mexican Standoff.”
RAW DATA: ACT information sheet
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