Compulsory or universal

Australia’s compulsory superannuation scheme is often held up as an example we should follow.

However, this exchange during Question Time yesterday threw up a little-known fact:

Hon David Parker: Does he accept that Australia’s successful universal workplace savings scheme, introduced a decade after National axed ours, is why Australia owns its banks and ours, and why Australians have higher wages?

Hon BILL ENGLISH: No, but I do know that two of the effects of it in Australia are that Australians have less money invested in businesses than New Zealanders—

Grant Robertson: Rubbish.

Hon BILL ENGLISH: —no, it is true—and its rise in household debt directly parallels its rise in nominal household savings. But if the member believes he wants the Australian system, he should be open with the New Zealand public that he is going to strictly means test national superannuation. There is nowhere in the world that has compulsory superannuation and universal national superannuation.

How many people who urge compulsory superannuation know that nowhere that has it also has a universal scheme?

If superannuation savings can be either compulsory or universal how popular would compulsion be?

Hon David Parker: Will the Minister now admit that National was wrong to vote against KiwiSaver, which it now supports, and to call the Cullen fund, which it now supports, a dog?

Hon BILL ENGLISH: No, but if the member is going to advocate what he calls universal but is actually compulsory superannuation, he needs to explain what impact that will have on New Zealand superannuation. I think those who have been in this Parliament for a while will recognise that we have spent—what—20 years in vigorous discussion over the nature of national superannuation. It ended up universal because that is what the public wanted, and Labour is now advocating the Australian scheme, which involves strict income testing of national superannuation. I invite the member to announce that at the next Grey Power meeting he goes to.

. . . Hon David Parker: Is the Minister able to table any document that he has received that proves the assertion he made in his last answer, which was that the Labour Party is moving to a meansbased superannuation when that, in fact, is not our policy?

Mr SPEAKER: Order! It is quite a different question, but carry on.

Hon BILL ENGLISH: If I could find a coherent, rational, sensible Labour Party document on this matter, I would table it. But I cannot, so I will table the results of the 1975 and 2008 elections, where these issues were litigated.

What we do know is that Labour plans to increase the age of eligibility for superannuation.

It also plans to tax more and spend more which will aggravate inflation which will erode the real value of wages making it more difficult to save and erode the real value of any savings, be they voluntary or compulsory.

 

4 Responses to Compulsory or universal

  1. Andrei says:

    If everybody saves for retirement, especially in a era of declining population then their savings will have become worthless by the time they need them.

    This is just the “thermodynamics” of money actually, something that few can grasp.

    If we have ten people engaged in productive economic activity for everyone who has passed the point where they can engage in economic activity then supporting those people who are no longer able to work is no problem

    If there are only two or three people engaging in economic activity for each who need support it becomes burdensome – this is where we are headed.

    That is why euthanasia is on the agenda

    Like

  2. Adolf Fiinkensein says:

    Andrei, you must be one of the few. Ever heard of productivity?

    Try getting out of your time warp and give humankind some credit for adaptability.

    You remind me of the sheep farmer in 1965 who looked after 500 ewes lambing at 95%. For him the industry was stuffed when prices dropped. Funny thing is, before too long individual sheep farmers were looking after 2,000 ewes lambing at 150%.

    Like

  3. Angry Tory says:

    There is nowhere in the world that has compulsory superannuation and universal national superannuation.

    Abso-fucking-lutely

    What we do know is that Labour plans to increase the age of eligibility for superannuation

    Completely common sense policy. As is Abbott’s plan, by the way, of increasing the age of eligibility for the dole and all other benefits.

    If superannuation savings can be either compulsory or universal how popular would compulsion be?

    Very popular indeed, I expect. I’m generation X, there’s not going to be any universal non-means tested super for me in 20 years time, or my kids in 50 years time. Wishing won’t make it so.

    More to the point:

    Universal superannuation is communism

    Compulsory superannuation is socialism

    National is asking us to choose between Stalin and Attlee – and choosing Stalin.

    Like Kathryn Ryan told Key: “lots of countries have these policies” — “yes, communist countries Mr Key!”.

    Like

  4. Denis Vincent says:

    propaganda and scare tactics from any political source is not adding anything to good political debate. Shame on you all.

    Like

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