Prime Minister John Key says the current superannuation scheme is affordable:
Mr Key, who said before the 2008 election he would quit parliament if the age was raised under his watch, says the government has carefully considered the scheme.
He says it’s running at 4.5 percent of GDP while in many other countries pension schemes cost well above seven per cent.
“Ours is likely, at the height of all the baby boomers getting super, to cost somewhere between seven and eight percent of GDP,” he said.
“We’ve modelled it, it’s affordable… we’ve made our choices about where we want to spend money and raise money.” . . .
Choice is the operative word – this government is choosing policies which promote economic growth which allows more choice on spending.
Money spent on one thing isn’t available for another. Labour’s choosing to offer welfare to families earning up t0 $150,000 when they have a baby and thereby restricting its ability to fund superannuation at the current rate.
It and its potential partners on the left are also choosing policies which will curtail growth which will further restrict choices for spending.
And he doesn’t see any merit in means testing for national super.
“Some countries means test but that would just discourage older New Zealanders from staying in employment,” he said.
“In New Zealand 20 percent of people over 65 continue to work, in Australia where it’s means tested it’s only 11 percent – it doesn’t make much sense for the economy to take those people out of the workforce.” . . .
Five of our staff are 65 or older – two of them are in their 80s.
They’re doing what they enjoy, staying active, earning money and paying tax on it.
Why disincentivise that by means testing their pensions?