Superannuation can’t be considered in isolation

Discussions on the affordability of superannuation focus on the aging population and likely costs.

That is only a small part of a complex issue.

Prime Minister John Key pointed out in Question Time :

Of course superannuation is an issue, but one thing that is worth noting is that increasing the age of eligibility has much less of an impact than commentators might imagine. For instance, moving the age to 67 makes a difference of about 0.7 percent of GDP, and that is not until 2030. So it is an issue, but growing the economy and fixing some of the other issues we inherited from Labour are more significant. 

Pete George has started a BADASS (Bloggers Advancing Debate About Super Solutions) campaign.

I agree with him on the importance of having the debate but no solutions will be found if we concentrate on superannuation alone.

It is a major, and growing, part of government expenditure but discussion must look at all other expenditure and revenue.

The country can afford superannuation as it is if it spends less or makes more elsewhere.

One question to ask is, whether we want superannuation as it is.

Regardless of the answer to that discussion then must consider at what we need, what else we might want and whether the government is the best provider of  it all.

It must also look at government income. Tax increases and more user-pays charges are the left’s usual answer to increasing that but more taxes and higher tax rates can and do reduce the tax take

The PM’s answer provided the only sustainable solution – that’s growing the economy.

7 Responses to Superannuation can’t be considered in isolation

  1. If people are living healthier and longer, why would we want to maintain the same age for entitlement even if we had massive surpluses? I can understand the arguments for giving poor people money; I have a harder time seeing why we ought to give older people money just because they’re older. Is it fair to tax poorer young people to give money to relatively asset-rich old folks when they’re still relatively healthy and able to work?


  2. JC says:

    A couple of things..

    There will be people who can provide for themselves but currently don’t fully because they will automatically receive Govt Super. If we want them to fully fund their retirement and *not* receive Super, then we have to offer an incentive through the tax system.

    Increasing the age for eligibility requires a U turn from ACC policy where many ailments that cannot be attributed directly to an accident is age related “wear and tear” and thus not claimable. You can hardly require people to spend another two years in the workforce without injury cover.

    We also need to be innovative with people who die 8-10 years earlier than Pakeha.. we aren’t talking smoking and drinking here but genetics. It shouldn’t be difficult to allow people to retire earlier and receive a (smaller) Super package.. at least initially.



  3. homepaddock says:

    Eric – I agree that being old by itself doesn’t mean you need public money.

    JC – the idea of retiring earlier and getting less or working longer and getting a bit more super makes sense to me. We’ve got 2 80 year olds working for us.


  4. adam2314 says:


    You ask..

    ” One question to ask is, whether we want superannuation as it is “.

    Is it not obvious that the question is already being asked ??..

    Is this not the reason for this debate ??

    Time to get real !!..

    Todays Superannuation payments are a long way from the original intention..

    Me ??.. YES I am Receiving the Super payment..
    Do I need it ?? No..
    73 years old and still working..

    My Grandfather died in the fields working..

    Age ??..

    I do not really know.. About late 50’s..

    The whole system in my self interested opinion is ripe for an overhaul !!


  5. adam2314 says:

    Make that ..

    OVER- RIPE for an overhaul !!


  6. homepaddock says:

    Adam, obvious to you – and me but not everyone thinks it needs to change.


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