Labour threatening superannuation

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.

29 Responses to Labour threatening superannuation

  1. Andrei says:

    The flaw in this reasoning is this – if wages increase so does the governments tax take thus, in theory anyway the government will have more money to pay out in super.

    All in all superannuation and an aging population are a ticking time bomb though but not one that can be fixed by treasury playing around with money, tax rates or changing the age of eligibility. At best these efforts will just be applying sticking plasters to a hemorrhage, buying a little time perhaps.

    The genesis of the problem lays in the willful denial of the reality of the human life cycle particularly the concept that each individuals productive years are finite.

    So we have been delaying the onset of adulthood and at the same time we are extending the years of dotage through medical advances, shortening the percentage of productive years that make up each individuals life span.

    And we are not currently producing the young who will make up the productive sector of society twenty or forty years from now.

    We are actually bankrupt and living on borrowed time

  2. TraceyS says:

    Nice – Labour wants to increase taxes, no doubt including those on private-sector business’ profits. While at the same time increasing public sector wages and salaries, thus making it very harder for private sector employers to compete with public ones. What a disgrace. How could anyone vote for that?

  3. Armchair Critic says:

    National shifted taxation away from people with high incomes and asset bases, and on to people with lower incomes and asset bases. What a disgrace. How could anyone vote for that?

  4. Viv K says:

    Greedy, selfish people who think it is OK for employers to profit from the labour of people who are not paid a living wage would vote for that.

  5. Gravedodger says:

    So we follow the lead of the three stooges and give every one $2000 a week tax free, a free four bedroom home, a beach house, a Merevale taxi, a Prius, a season pass to the skifield and the local footy stadium, a laptop, an Ipad, an Iphone, a mountain bike, two weeks in Bali, a Koro Club pass, $10k in taxi chits, a railway to everywhere, and pay for it all by borrowing Wussel’s 3D printer.

    Feckless whingers who make poor choices, sit on their arses, do drugs, bash their kids, (and the odd policeman)will get everything while contributing nothing to society while the hard workers who manage their affairs, organise their priorities and live outside the megaopolis will get nothing extra for their efforts.

    That’l work well, not.

    Welfare is the problem not the freaking answer.

  6. Armchair Critic says:

    I want a pony too. No, make that a unicorn.

  7. Viv K says:

    Hyperbolic bullsh*t Gravedodger. Employers who do not pay a living wage to their workers are benefiting from taxpayer subsidies paid to those same workers so their families can survive. Those employers are the beneficiaries ripping off the system. A living wage is NOT welfare.

  8. Gravedodger says:

    Employers being subsidised by WFF is welfare, muppet
    WFF is welfare

    @ A Critic, the pony will need a groom as the kids will be too busy on the interwebby to feed the poor thingy, ooh look we have created a job, pity nobody will want to get off their couch to do it.

    Dont worry about me hyped bowl it can double for a porridge plate.

    ps my rubbish theory is as viable as the dreamtime from the three stooges.

  9. Andrei says:

    Employers being subsidised by WFF is welfare, muppet
    WFF is welfare

    Bullshit! WFF is a confidence trick, smoke and mirrors – the thieving pricks in Government take the money the working man has earned by the sweat of his brow as tax and then act all virtuous as they give him some of his own money back to feed his kids, like some generous uncle rather than the parasites they really are.

    The way you characters go on you’ld think the be all and end all of Government was to collect tax and that was what government was all about.

    No wonder you are so easily sucked in by these third rate con men we call politicians who bloat themselves on the hard labour of their compatriots

  10. Viv K says:

    You wouldn’t perchance be a hypocritical old rambler would you Gravedodger? Government superannuation paying for the booze that lubricates the flow coming from your computer keyboard? No, surely someone as principled as you would not accept ‘welfare’.

  11. Viv K says:

    Andrei, no working women in your 19th century world then? No, we’re all meant to be having lots of babies and relying on a man to support us.

  12. TraceyS says:

    Well you could always make employers of people receiving WFF to pay the WFF directly rather than the government and to reduce their taxes to help them pay it. Increasing taxes will only make it harder for these employers to pay increased wages.

    None of our employees receive it. Why should we pay more tax to fund it? I would rather use our profits to grow and to provide another job that is above the threshold.

  13. Andrei says:

    You think that raising a family isn’t “work” Viv? Perhaps you think it is menial work, akin cleaning public toilets?

    Or do think a woman is can only be fully fulfilled if she has a real job like producing important policy papers for the Government on banning the sale of “sugary drinks” within 2 kilometers of a primary schools and so forth.

    Which is a bit sad for all the woman who cannot secure such a cosy sinecures. C’est la vie

    The women who out of necessity, the need to feed and clothe their young, start work after the real people have gone home or to their yuppie bars and clean the offices where the real people do their important things during the day

  14. TraceyS says:

    This is a very narrow view which assumes employers who pay low wages do not reinvest their profits back into their businesses to create more jobs. Sure, they may be low paying jobs, but better than no jobs at all.

  15. Viv K says:

    Might be news to you Andrei, but women can do more than office work and cleaning.
    Having had 3 kids, I do know that raising a family is extremely important, rewarding work, but it’s not paid work and that was what the discussion is about.

  16. Viv K says:

    “They may be low paying jobs, but better than no jobs at all”
    It is not right that someone could work 40 hours a week for $463.25 in the hand and that the taxpayer is subsidising that business (whatever they do with their profits). Many aged care workers are paid the minimum wage so that the corporations who employ them can make money for their shareholders. It is wrong.

  17. Viv K says:

    If you use your profits to ‘grow’ your business, you are increasing the value of your business and YOU are the one who benefits most from that in the long run. And if you are paying a living wage, then it wasn’t your business I was commenting on.

    Unless you know exactly what the total combined family income of all your staff is and how many dependent children they have, you should have no idea whether or not they receive working for families payments, it’s between the IRD and individual families .

  18. TraceyS says:

    “If you use your profits to ‘grow’ your business, you are increasing the value of your business and YOU are the one who benefits most from that in the long run.”

    You do not understand the importance of business in our society do you Viv?

    So what if a business owner retires a bit better off then their employees? They might have provided work for hundreds of people during their time in business, risked everything to do so, made services and products available to improve the lives of people, and had many stressful times the likes of which their employees will proibably never know.

    Nothing is stopping anyone in thei country from becoming self-employed and growing a business. You do not need a flash education or to have been born with a silver spoon in your mouth. Your race, gender, or sexuality won’t stop you either. The message we should be sending young people is to get off their butts while young and make it happen. There are major sacrifices involved in starting from nought and working your way up. The attitude that all growers of capital are greedy is just plain wrong.

    Your business-profits-bad mentality is, to put it midly, frightening.

    It is what is done with the profits that matters.

    Labour’s plan to increase taxes will not discriminate I wouldn’t imagine. So employers who are paying all their staff good wages and doing well and growing by using their profits to reinvest in themselves will be taxed to subsidise those who aren’t. The result will be greater dependency on the State. Just what Labour wants.

  19. TraceyS says:

    Can I suggest that you have it out with Helen Clark who could not see this coming.

  20. Andrei says:

    The discussion is about superannuation, in particular the spin that raising the minimum wage will increase the governments superannuation liability and therefore (and this is a very long bow) force the Government to raise taxes.

    This is of course nothing but partisan BS, the Nats need to do this sort of thing because they too are a party totally bankrupt where it comes to vision and they a pretty deficient in the integrity department as well – its all about winning the next election, which they will because as appalling as National is Labour is a damn sight worse

  21. Gravedodger says:

    Nice one Viv.
    Yes I am in reciept of a state pension that until a serious health issue proscribed my ability to work between 10 and 30 hours a week for no pay in my community for 13 years, the first 7 funded by my own savings, I feel very little hypocrisy.
    Yes I do imbibe a little nectar from my ancestral homeland,, north of Hadrians Wall, but the last intake was in celebration of the kicking the unelectable leader administered to the destructive Greens and the internecine squabbling remnants of the once proud Labor party in the West island on Saturday night.
    My rambling is also seriously impeded by the visitation of health challenging issues and the subsequent struggle to match medication, symptoms, relief and enjoyment of life. That said I did find considerable time last Friday to stand on the street of ‘Paradise’ with a bucket collecting for Parkinsons and Multiple Sclerocis.
    Have a nice day, I am.

  22. Armchair Critic says:

    Can I suggest that you…
    You already did.

    Every now and then I read a comment of yours, Tracey, and I think to myself “That was a really stupid comment, how will its stupidity ever be surpassed?” This is your best yet, so I suppose congratulations are in order. It would be futile for Viv K to “have it out with Helen Clark” because Helen Clark has not been PM since 2008, and has not been an MP since 2009. It seems very unlikely that Helen Clark will run for parliament again, and she will never be PM again. So “having it out” with her would achieve nothing. Issues like this are best addressed to the people who have the skills and power to effect change.

  23. Viv K says:

    I do NOT have a ‘business profits bad’ mentality, you have a problem debating because you often make up stuff. Profits made from the labour of people not being paid a living wage are unethical profits. As for a business owner employing hundreds of people retiring only slightly better off than their employees -yeah right! I’m sure you’ll find one somewhere, but that will not be the norm.

  24. TraceyS says:

    Really AC? Then why do you ever bother arguing with ME?

  25. TraceyS says:

    You need to get out more.

  26. Viv K says:

    “The result will be greater dependency on the State. Just what Labour wants”. That’s just rubbish.
    “Nothing is stopping anyone in thei country from becoming self-employed and growing a business.”- well in my line of business a $100K student loan + $100-200K set up costs are pretty big barriers. Also required is a population that are paid enough to use the services provided.
    I get out enough Tracey.

  27. Viv K says:

    Gravedodger, I have a family member with MS, I didn’t have time to collect for the appeal. I appreciate you taking the time and effort to do so, thank you.

  28. TraceyS says:

    To Viv @8:59am. Not all businesses have the prohibitive entry costs of dentistry. But then we don’t all need to be dentists, nor could we be. Other businesses have lower entry costs. And many people are highly successful in business without very much of an education. Rich parents are definitely not required. What is? Nous. Business nous and lots of it. Don’t knock those who have it. We need them. Dunedin especially needs them.

  29. TraceyS says:

    It would be a boring debate if all we did was regurgitate what one another said almost word for word.

    It is childish to frequently repeat “I didn’t say that”.

    If you comment, you run the risk of being misunderstood. That’s what the next reply box appearing below is for!

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