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The Standard

Don’t blame MMP for Nat stupidity

Written By: - Date published: 9:32 am, December 18th, 2012 - 18 comments
Categories: john key, national, superannuation - Tags: , , ,

Two pieces in The Herald last weekend repeated the well known warnings – that the government is failing to face up to the responsibilities of an aging population. As ever Bernard Hickey pulled no punches:

Relax and be overburdened

This week’s conference on the sustainability of our Government’s finances reinforced the immense power of ageing.

Treasury forecast the ageing of our population would increase health and superannuation spending to 19.1 per cent of GDP by 2060, from 11.3 per cent in 2010. More importantly, the population paying for this will be smaller than today’s. Treasury estimated the number of people aged 15-65 supporting each person over 65 will fall from just over five in 2010 to just over two by 2060.

Without changes in taxation policies, retirement age and universal access to pensions and health, the Government’s debt is forecast to explode towards 200 per cent of GDP by 2060 and interest costs to 11.4 per cent of GDP by 2060 from around 1.2 per cent in 2010.

Essentially, the generations running governments of today have decided to consume the future now and pass crushing debts to the next generation. …

In the second piece John Armstrong identifies the same problems:

Let’s not grow old waiting for action

… The conference delivered two messages: first, that early implementation of the trade-offs required to meet additional pension and health costs is preferable to last-minute panic measures which might be more severe in their impact on the working population.

Second, that the power that can be exercised by age cohorts under MMP makes it paramount that the search for consensus begins even earlier.

With its timely early flagging of its intention to raise the pension age to 67, Labour seems to have worked that out.

The same cannot be said of National. Are you listening, Mr Key?

But, bizarrely, John tries to blame MMP:

Problem of ageing population will put MMP to the test … Will the staunch critics of MMP finally be shown to have been right all along? Does their long-held assertion that the policy compromises flowing from a proportional voting system work against the long-term national interest have some basis after all?

Oh please. MMP was not to blame when Muldoon cancelled Labour’s compulsory super saver scheme. That was just Nat stupidity. And MMP is not to blame for Key’s election bribes (the promise not to change super was made at a time when National entertained hopes of governing alone, and since when did their support parties ever stand for anything?). Once again plain Nat stupidity. We’re consuming our future all right, in more ways than one, but MMP is not to blame.

18 comments on “Don’t blame MMP for Nat stupidity”

  1. Draco T Bastard 1

    The real problem is the financial system and not the economy. If we lived within the real economy rather than chasing more money we’d easily be able to maintain the present retirement set up. Not that I’m supportive of that as I prefer a Universal Income.

    • Lefty 1.1

       
      You are so right Draco.

      The debate on superannuation between National, Labour, various economists and commentators is infantile.

      They entirely miss the point of why we have super, fail to examine the linkages between work and wealth distribution, refuse to look at the amount of socially necessary work to be done now and into the future, and assume the financial system we have at present is the only one possible.

      There is, and will continue to be, plenty to go around if distributed fairly.

      A Universal Basic Income system would be a great first step towards achieving a fair and sustainable sharing of the value created through the collective labour of us all throughout our lifetimes.

      As for basing anything on Treasury projections to 2060: the useless bastards can’t even get it right a few months ahead.

  2. Dv 2

    So how does MMP stop Nats joining with Lab to sort out super?

  3. Enough is Enough 3

    The answer is not increasing the elegibility age either. It is having an appropriate tax system.

    Universal Super to those aged 65 and above is affordable now and will be for the next 50 years. But only if we begin taxing those who can afford it approriatley.

    A 65 year old labourer who has sweated for 45 years shouldn’t have to work for an extra two years just so the rich can pay minimal tax.

    When will the Labour party stand up for the workers of this country?

    • r0b 3.1

      A 65 year old labourer who has sweated for 45 years shouldn’t have to work for an extra two years just so the rich can pay minimal tax.
       
      Which is why Labour’s policy included exemptions for manual workers.
       
      When will the Labour party stand up for the workers of this country?
       
      They do – it helps if you know their policies.
       

      • Napkins 3.1.1

        In an age of massive financial assets, investment capital and liquidity, why are we forcing some older workers to work years longer than they really want to.
        While at the same time there are tens of thousands of young workers desperate for those same positions and who cannot get steady full time employment?
        It’s pretty easy to see that something is very wrong.

      • Lefty 3.1.2

         
        I recently saw David Shearer at a meeting of low paid workers. He said he was all about fairness and so he was going to raise the retirement age.
        When somebody from the floor pointed out that many workers, especially Maori were dead by the time they are 65 he said they would make some exceptions and pay a lesser amount earlier.
        Presumably this means if you jump through the right hoops and can prove you are worthy you will get a bit of a pension before you die. We all know how good and fair the state is at giving these sorts of entitlements.
        Entitlements that are not universal quickly become shambolic and unfair in their administration.
        Like many of the middle class Shearer seemed incapable of understanding what a lifetime of drudery is like.
        Many of the people he was talking to are on the minimun wage. They put in long, hard hours at soul destroying jobs being abused and harrased by bastard employers. There is no pleasure and very little income in what they do.
        Some of us started physical work at fifteen. We have put in ten years hard labour and paid a shit load of tax before middle class kids had finished uni. Our bodies were already starting to show the first damage about that time.
        If we are lucky we manage to find something less strenuous, but not necessarily less soul destroying in our middle years.
        By the time we are 60 many of us are already totolly buggered, painfully forcing ourselves to go to work each day and just hanging on grimly until we hit 65.
        We don’t have a genteel and satisfying job to look forward to after we turn 65 years old.
        We don’t have a fat Kiwisaver pension, sucked out of the exploitation of people like us through your investments in companies that exploit our labour and we don’t even necessarily want that. Being
        Raising super is all about the same spoilt middle class kids screwing us again and pricks like Shearer, who has spent most of his life prancing around paid very well to do interesting and undemanding stuff, that he wants to screw some more hard labour out of us in the name of fairness.
         
         
         

        • outofbed 3.1.2.1

          what lefty said

        • Roy 3.1.2.2

          Which is why I support means-testing super rather than raising the age. I know too many oldies who are getting super when in terms of assets they are already multi-millionaires.

  4. JonL 4

    “When will the Labour party stand up for the workers of this country?”

    Not under the current regime…….sorry – Labour has gone the way of most Labour parties around the western world – old, senile and conservative!
    Without a massive influx of young blood and /or ideas, they’re doomed to remain just another conservative, right leaning party….

  5. bobo 5

    +1 Draco
    A fair few on this site have been cheer-leading raising the age of super as some fix it.. The Greens & Labour seem to have adopted Don Brash’s 1990s neo-lib ideology on this, which is sad all round from a left perspective. This policy hurt Labour at the last election whether they will admit it or not, it went against their original core values.. Back to work till you drop.

    • The Gormless Fool formerly known as Oleolebiscuitbarrell 5.1

      That’s right, what the present situtation demands is a policy whereby everyone, regardless of need, gets free money from everyone else.

      • bobo 5.1.1

        You seem to have got bankers and actual people confused regarding “free money”

      • Draco T Bastard 5.1.2

        Well Gormless, you just proved that you have NFI how the economy works. But you’re in good company – niether do the economists.

  6. KJT 6

    Here we go again.

    Endlessly repeating the right wing meme of “we cannot afford it” and TINA endlessly about super affordability does not make it true.

    http://kjt-kt.blogspot.co.nz/2012/06/on-new-zealands-retirement-income.html

    “Since the 70’s they have been constant in the meme that we cannot afford super. A meme that has been driven entirely by the self interest of those, who are too wealthy to need super and too mean to pay taxes, and a greedy finance industry.

    Unfortunately, it is true, that if you repeat bullshit often enough, even those who should know better come to believe it.

    We cannot afford super is code for, “we should leave our elderly to beg on the streets”. So that wealthy people can pay less tax and the finance industry can again lose our savings for us.

    In fact the idea that State super is unaffordable is crap from the same people that cry TINA and reckon that all social insurance is unaffordable.

    If they win with super, they will just start on other social wages.

    In reality it is much more affordable than the finance company bailouts, which would be necessary with private super.
    .
    http://norightturn.blogspot.co.nz/2012/06/what-superannuation-crisis.html
    “So, in 2050, we’re projected to be paying only 1% of GDP more in superannuation than we were paying in 1990. Quelle horreur! This is not a difference to be terrified of, and it is easily manageable with a modest increase in taxation, either now or in the future (though that perhaps is exactly what those pushing for change are frightened of: higher taxes)”. “”

  7. Mike 7

    In fairness to Armstrong, I think he was raising a question rather than blaming MMP?

    Just as a matter of interest. If we average the same rate of inflation over the next 50 years that we have had over the last 50 years and super is raised in line with official (not the same as real) inflation rate, then by 2060 the lowest pension (single, living alone) will be over $200,000 per annum. Yahoo!!! (Only yahooed until I remembered that if we used the same rate calculation, a bottle of milk will cost 300 bucks and an average 3 bedroom house in Auckland will cost close to 20 million dollars!!)

    Oh the joys of continuous growth and the exponential function. Don’t get me started on compound interest, but if you were around when Jesus supposedly was and borrowed 5 pennies at 5% interest, never intending to pay the loan back, then the amount owed today would be equivalent to something like 34 billion globes of solid gold, each globe being the size of planet earth.

    hehehe, I should really find something productive to do.

    • RedLogix 7.1

      In other words mike in any system which features exponential growth, repeated cycles of boom and bust are an inherent feature.
       
      Capitalism is an inherently unstable system, only this time the boom cycle has been so monstrous that the resulting bust threatens to take down most life on this planet.

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