NZ retirement age in question with Key exit

A National government under a new leader may be more willing to lift the age of eligibility for New Zealand Superannuation, economists said after John Key announced he will step down as prime minister.

"The fiscal viability of current NZ Superannuation would potentially be more open to debate, as Mr Key has long said he would resign rather than change the current scheme," ASB Bank chief economist Nick Tuffley said in a note.

Mr Key said a new leader would be elected by the party caucus on December 12 and he will vote for his deputy Bill English if he is put forward. Mr Key cited family reasons for his decision to go. He said in all likelihood, he would not want to serve a fourth term as prime minister.

Labour leader Andrew Little told the media he would not consider raising the NZ Super age beyond 65.

"I want to make sure NZ Super is there for all future generations. I come from a background of representing working people. The idea of lifting the age is a step too far for many people."

Mr Little praised Mr Key for his contribution to government.

"Labour is ready and willing to contest the 2017 general election. We will present a credible choice for people and look forward to the opportunity to contest the election on our values and vision for New Zealand."

Economists at ASB said the implications for the New Zealand economy for the remainder of the current parliamentary term "are quite minimal," arguing the senior leaders of the government are likely to remain broadly unchanged.

"It is possible that business confidence will dip slightly in the short term and the usual pre-election slowdown of business investment decisions may be larger than normal," he said.

The NZX50 was trading at 6906 before the unexpected news, falling to as low as 6879, a drop of 0.4%. A short while ago it was trading at 6880.

The NZ dollar fell from 71.13USc to a low of 70.76USc in response to Mr Key's announcement. It's now trading at 70.79c.

(BusinessDesk)

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