Kiwiblog points out that if Labour enacts what is an effective minimum wage of $18.40 it will have an impact on superannuation.
The pension is based on 66% of the average wage for a couple. If the average wage goes up, as it will if the ‘living wage’ is introduced then superannuation will too unless Labour changes the way it is calculated.
The party is already proposing to increase the age of eligibility for superannuation because it says it’s not affordable now.
What changes will they have to make to ensure it’s affordable if they keep it based on 66% of the average wage?
Even if, as is inevitable, they have to accept that the ‘living wage’ is unsustainable, one of their other policies will impact on superannuation.
They’re promising tax increases.
The pension is based on the average wage after tax.
When taxes fall, as they have under National, the average after-tax wage increases and so does the pension.
When taxes increase the average after-tax wage will fall. It would be political suicide to cut the pension but if they increase taxes and do nothing else pensions won’t increase or will do so more slowly.
Whichever of the policies you look at, the current rate of superannuation is under threat under a LabourGreen government.