Labour’s savings & retirement policy

Written By: - Date published: 6:37 am, October 28th, 2011 - 100 comments
Categories: election 2011, kiwisaver, national, superannuation - Tags:

Well, they said they were going to run this campaign on policy and make the bold moves, and Labour proved that with their savings policy. National is been left floundering. Labour has the policy-focused discourse it wanted and Key will look silly parading in front of the faithful on the weekend with nothing to say.

Brand Key is unraveling while Labour starts to dictate the play for the first time since Orewa. But the substance of the savings policy wants a closer look, it has both good and bad aspects.

Restarting Cullen Fund contributions

No real argument on this. It just makes sense to save now as a country for the retirement glut coming in the 2030s. National’s suspension of contributions will mean $30 billion less in the Fund in 2050. Key thought it was better to borrow for tax cuts for the rich than to build up our future wealth. That means more of the cost of super in the future will have to be funded from cutting other services or raising taxes. Or, lowering superannuation costs.

Raising the retirement age

Labour has grabbed a second of the so-called third rail issues of New Zealand politics and found that it hasn’t delivered the deadly shock everyone assumed.

Most people realise that, as people live longer (the life expectancy is rising at the rate of 3 months per year) and the population ages, the retirement age needs to go up.  Most people realise that the limited resources of the welfare system need to be fairly distributed over the whole population (see this plea by leading doctors in the NZ Medical Journal). The pension system was never intended to support the average retiree for 25 years as it does now (that average is rising). Nor was it intended to support one pensioner for every three working age people.

People are increasingly healthy and capable as they age. Every dollar spent on supporting 65 and 66 year olds who are capable of supporting themselves (and 40% of them are working) is a dollar that can’t be spent on higher priorities, like health, education, tackling climate change, and investing in an oil-free future.

In fact, John Key said:

“will lifting the retirement age by a couple of years in twenty years time be all that big a deal? I suspect not. If anything it is likely to be welcomed by the majority of New Zealanders who recognize that increased levels of longevity, inevitably means that any private capital they have squirreled away will need to be spread more thinly and last longer.”

Of course, that was back in 2004, when he still actually dared to say what he thinks, rather than always charting the path of less resistance, and before he discovered his talent for smiling and waving.

The big issue with raising the age people who are physically incapable of working longer and it’s good to see that Labour has said it will allow people who aren’t healthy enough to work at 65 (and don’t have private means) to get a transition allowance of the same value as the pension.

Keeping access to Kiwisaver at 65 is a good move for people who need to or want to retire earlier than 67 too.

But Labour could have been more creative. Why not allow the transition allowance for anyone over 60 who is too worn out from physical labour to work anymore?

And why we don’t means test in general as a way of reducing expenditure, rather than raising the age. Would that be fairer? Of course, there was pretty strong opposition when National tried to introduce means testing in the 90s.

In general, a good policy as long as it allows for people who aren’t up to working to 67.

Just having a universal basic income would get around all these issues.

Compulsory Kiwisaver

Compulsory Kiwisaver is great. It makes every worker an owner of capital as well. Given our poor savings culture, it will be the only way for some people to build a pool of wealth for their retirement and for building up to pay for a mortgage. From a wider view, it helps New Zealand to build a pool of capital wealth with which to build our future productive capacity, without having it all owned offshore with our country just a source of profits for foreign investors. It will further transfer investment out of housing into businsses.

But the employer contribution is worrying a lot of people. The employer contribution will ramp up at 0.5% a year from 3% to 7%. The Right’s moaning that will will hurt businesses but the worry is that they will rip the increased contributions out of workers’ wages.

You might remember that, when Kiwisaver came in, businesses were deducting their contributions from workers’ wages but Labour made that illegal. Then, National made it legal again. Under this new policy, Labour would leave it legal. The policy says:

“The impact of the 0.5 per cent annual increase on wage negotiations will be a matter for discussion between unions and employers.”

So, Labour is implicitly saying that employers will be able to offset their rising contributions against wage increases . So, workers would end up 4% worse off cash in hand, although with much bigger Kiwisaver nesteggs, as a result. It is going to end up being an employee contribution, not an employer contribution in many cases.

That’s no big deal if you’re getting the 4% average nominal wage growth that Treasury reckons is the norm but when was the last time you saw that kind of a rise? If you’re stuck going backwards in real terms in your wages anyway, then having another half a percent a year ratcheted off will be nasty. Especially for low wage workers who already worry that 2% is too much, being handed a pay cut by their employer will be another burden.

This is closely based on what happened when Aussie introduced their compulsory scheme. Unions agreed to forgo some wage rises in return for the employers’ 9% contributions. But, at the time, the Aussies had strong wage growth and that was driving high inflation. We don’t have strong wage growth.

Another reason to join your union, actually. Union workers have been getting pay hikes while nearly everyone else has been stagnating. And unions will fight hard to make sure that the employer absorbs the higher employer contributions, rather than passing them on.

Farrar is trumpeting this as Labour’s policy to cut wages. What a joke. He was just last week crying about Labour’s work and wages policy to increase wages. Nobody will buy his crocodile tears now.

But the possibility, well likelihood, that the higher employer contributions will end up as a compulsory tax hike on workers’ wages when workers are already struggling is a serious concern.

To be fair, Labour’s other policies will offset this somewhat, if not in full. The first $5,000 tax-free and the $15 minimum wage will make sure that lower paid workers aren’t left out of pocket (and will have much more when they retire). The work and wages policy will help raise wages, particularly for non-union workers. They’re sort of giving with one hand and taking with another (although, let’s not forget it’s your money still when it’s in Kiwisaver).

So why didn’t they make the work and wages policy their big one for the campaign launch? They practically tried to bury it.

And have they thought through the equity implications? If people are retiring with really large Kiwisaver nesteggs will the pressure come on to cut super payments? Australia’s pension is a lot lower because they all have their personal superannuation. But how much you have in your Kiwisaver depends on your income during your working life. The rich will have more to retire on. Will public, universal superannuation get edged out by private, universal but unequal superannuation?

Again, Labour could have been much more creative. Why not have an adjustable employee contribution rather than this employee contribution by stealth and use it to control inflation?

Singapore has something like that. Compulsory savings with a variable contribution level. Rather than increasing the profits to banks by hiking our mortgage rates when inflation goes up in an effort to constrain consumer demand, make us put more of our money into our savings instead (and, thereby, avoid cutting off credit to business as interest rate hikes do). It seems to work for them and it means sending fewer profits offshore.

And where’s the public Kiwisaver option run by Kiwibank with the mandate to buy strategic New Zealand assets? They could have made this much more of a tool for economic reliance and decreasing our level of foreign ownership.

So, compulsory Kiwisaver is good but, if wages don’t rise, the employer contribution will end up being a surprise sting for many workers. And another bloody good reason to join your union. (hey, Farrar, there’s a line for you ‘Labour’s stealth unionistation policy’)

So, it’s a mixed policy. They’ve tried to good things. These good things have some pretty bad side-effects and they haven’t really done enough to address them. And they haven’t been as inventive as they could have been.

Still, when the alternative is this guy ….

100 comments on “Labour’s savings & retirement policy ”

  1. Peak Oil is Near 1

    This isn’t a very credible policy given Labour left office last time with ever increasing debt and neverending deficits, and their spending track is to rack up billions more in debt. Do Labour think the rest of the country is so stupid, that people can’t separate the rhetoric of their outcomes versus the reality of their accumulated promises?

    • Colonial Viper 1.1

      Increasing debt? You mean like Bill English borrowing $300M per week?

      • *_* 1.1.1

        Right thicky, think about the economic consequences of not borrowing $300m a week.

        Do you actually want social sercices to be cut?

        • Bored 1.1.1.1

          Thick comment methinks…how about not borrowing $300 million a week in order to pay for tax cuts for those who don’t need them?

    • r0b 1.2

      That isn’t a very credible comment as the claims it makes are wrong.  Labour left office with zero net government debt.  Deficits were projected as a result of the global crisis. Labour had a package (much more credible than National’s) for addressing this and reducing projected debt quickly, but never had a chance to do a budget on it.

      • Peak Oil is Near 1.2.1

        Rob have a look at the PREFU before the election in 2008. It forecast ever increasing debt and neverending deficits. Please point out which claims are wrong.

        You can’t be serious when you say Labour had a package. They didn’t have a package. Not one they took to the election. They vaguely promised a mini budget afterwards.

        Who to believe, the Treasury whose job it is to forecast, or Labour who had the chance to come up with a plan before the election, didn’t, vaguely promised to fix things afterwards, and then after the election criticised every spending change that National made?

        • Lanthanide 1.2.1.1

          I’ve commented on this in the last couple of days.

          What exactly did National do in 2009 to turn this “decade of deficits” around? Window dressing on kiwisaver and cutting contributions to the cullen fund. That, and a tax cut which they went and repealed and replaced with something more regressive is essentially it. Lets just forget about the “do-fest not talk-fest” talk-fest jobs conference and the cycleway, shall we?

          I think the “decade of deficits” was overegged by treasury, and National grabbed it and ran with it. Now it’s become this cultural myth that millions of people believe because National keeps lying to them about it.

        • framu 1.2.1.2

          “had the chance to come up with a plan before the election, didn’t, vaguely promised to fix things afterwards, and then after the election criticised every spending change that (insert party) made?”

          that was nationals entire election strategy in 2008 and how they behaved once they won.

        • r0b 1.2.1.3

          Please point out which claims are wrong.

          This one for a start “Labour left office last time with ever increasing debt”. Labour left office with zero net government debt.

          Rob have a look at the PREFU before the election in 2008. It forecast ever increasing debt and neverending deficits.

          You might recall that the global economic situation changed rapidly in 2008, of course there were sudden changes in predictions.  Had Labour had the opportunity to do another budget they would have fixed it.  Since you clearly didn’t read the link I gave you above, I’ll repeat one of the main sources quoted, John Armstrong at the start of the 2008 election campaign:

          If actions speak louder than words, Labour was the winner on Day One of the official election campaign – game, set and match. In the fight over which of the two major parties is best at running the economy, Labour scored a significant tactical victory. …

          Key’s earlier speech at National’s campaign opening in Auckland’s SkyCity Convention Centre said nothing new on economic policy. In fact, it said nothing new about anything.

          If that was not bad enough, Labour was getting ready to lay out something really meaty just a few blocks away in the Auckland Town Hall. There, Helen Clark trumped Key by delivering the recovery package he had been demanding, including contingency plans to save jobs and the promise of a mini-budget in December. The upshot was that Labour looked like it was governing; National looked complacent and flat-footed.

          The right wing is desperate to try and rewrite history, but the facts are clear.  Labour were competent managers of the economy, and the Nats have stuffed up by borrowing to fund their unnecessary tax cuts for the rich. 

          • dave brown 1.2.1.3.1

            Exactly, Labour is swinging right again to prove that in a global crisis it is a better manager of the NZ economy that National. That’s what being tough is all about. Its signalling to international bankers that NZ is a safer bet with Labour’s fiscal responsibility than Nationals profligacy. Its no surprise the Lange government did it during another crisis and today Social Democratic governments are the ones ‘managing’ the debts in Greece, Spain, Portugal and sharing the task in Ireland. Why not right wing Labour in NZ?
            Here’s the price pensioners are paying for the crisis in Greece.
            http://thenextrecession.wordpress.com/2011/10/27/the-euro-non-solution/

            • Bored 1.2.1.3.1.1

              Gee Dave, I wont argue with you on that point, it is the core problem of our age: conventional thinking as opposed to checking reality and testing conventions against that. True proof that Labour cannot think outside of the status quo.

          • Bazar 1.2.1.3.2

            “Labour left office with zero net government debt.”

            Care to show how you came to that conclusion?
            i find that utterly baffling how you can state that, given the following budget.

      • Herodotus 1.2.2

        r0b Labour can into the 08 election with the promise of a mini budget Yet on the eve of the election there were limited details on what promises that they were then currently making were to be revoked, and what the mini budget contained. Perhaps even the Labour tax cuts promised were to go for a 2nd time. Some may not value your vote, but for me I would like to have some details on what to make a semi informed decision on.
        Nice to see Lab at least viewing this issue withsome credibility, and get my full support. It still confuses me why Lab have been so upfront here, and yet pander in regard to CGT with looking after rich minority interests with some of their exemptions e.g.
        “The family bach would be caught by the tax, but only if it was sold. If it was handed down through the generations, no CGT wuld be paid..”
        Pity Phil has been the sacrificial lamb in this election, leading in some good issues, but for past comments from Lab undermining decussions e.g. CGT, raising pension age. Perhaps this is a plan and establishing positioning for next time.

        • r0b 1.2.2.1

          Hi Herodotus – see reply to Peak Oil above (1.2.1.3).  Labour had a detailed plan for response to the crisis.  I don’t know if it exists on line anywhere now, but John Armstrong was clearly impressed by it.  It’s a real pity that Labour didn’t survive the ’08 election and have a chance to put the plan in to effect.  We’d be in a much better position now…

    • Eddie 1.3

      If peak oil is near, then moving to reform the fastest growing share of our economy – superannuation payments – is pretty important. Because if the growth Treasury predicts doesn’t happen then the cost of super as a share of our output is going to rapidly reach crisis level.

    • KJT 1.4

      Typical Neo-Liberal BS. Repeat a lie often enough and it becomes fact. (NACT is further into deficit and debt than Labour would ever have been and more austerity will make it worse, not better). Like the one that we cannot afford to keep our elderly in retirement.

      It is disappointing, after showing signs of becoming a real Labour party again, Labour has bought the TINA line on superannuation.

      Cutting benefits and taxes is not the answer. It is national suicide, as the UK has already proven.

      If super does become too expensive the answer is already in the article above.
      Cut it for those still working.
      Means test it.
      Have an abatement rate like other benefits.
      Increase tax on high incomes to Australian levels.

      Or

      A truly courageous Labour party would have made super universal, as a GMFI for all ages.
      Instead of having to beg WINZ for what should be every New Zealanders birth right. Enough to feed and house themselves.

      This shows that Labour is still too scared too take on our real problems.
      The need for a sustainable NZ centric economy.
      The dominance of corporates and the, mostly overseas, wealthy in our social and economic life.

      The way to make super sustainable in future is to invest in the future of our youth. Not in funds that gamble in dodgy financial markets overseas. Which are going to collapse in our lifetimes.

      • Carol 1.4.1

        If super does become too expensive the answer is already in the article above.
        Cut it for those still working.

        That is already being done in effect.

        Actually, the current rule is that, for people working over 65 years, NZ Super is reduced or at least clawed back through taxes, as a result of the amount of income they are earning.

        http://www.msd.govt.nz/what-we-can-do/seniorcitizens/entitlements/nz-superannuation/

        You can still receive your New Zealand Superannuation while you are working or receiving other income, but this may affect the amount of income tax you have to pay on your combined income.
        [..]
        If you earn more than $100 (before tax) a week your payments are reduced by 70 cents for every dollar of income over $100 (before tax).

        • Descendant Of Smith 1.4.1.1

          You missed an important bit out:

          Other income

          Receiving other income does not affect your NZ Super unless your partner is included in your payments. If your partner is included, you can have other income of up to $100 (before tax) a week between you before your NZ Super is affected. If you earn more than this, we will take 70c off your payment for each dollar of income over this limit.

          When a partner (usually aged under 65 and I know of one person who had an 18 year old partner) is included in your NZS it is income tested – when it is not or you both qualify yourselves for NZS then there is no income test.

          Unlike Australia where it is both income and asset tested and you cannot include underage partners.

          In some respects Labour’s changes do presumably asset test the first two years – 65 and 66 though I’m not sure they have said that the proposed transitional payment will be subject to income testing.

      • Draco T Bastard 1.4.2

        The way to make super sustainable in future is to invest in the future of our youth. Not in funds that gamble in dodgy financial markets overseas. Which are going to collapse in our lifetimes.

        Bingo.

        The present economic system we use doesn’t work as it’s not connected to reality and shifts all the wealth that the country has into the hands of the few – just as what happened under feudalism and every other dictatorship.

      • Vicky32 1.4.3

        If super does become too expensive the answer is already in the article above.
        Cut it for those still working.
        Means test it.
        Have an abatement rate like other benefits.
        Increase tax on high incomes to Australian levels.

        Excellent ideas! 😀

    • Bored 1.5

      Suggest you change your name to Peak Oil is PASSED. In the interests of accuracy.

      • insider 1.5.1

        Global Oil supply from IEA monthly report

        Jan 2000 – 74.6mbpd
        Jan 2009 – 85.2mbpd
        AUg 2011 – 89.1mbpd

  2. Labour is proving very adept at dominating the policy debates.

    It is also capable of describing in detail what the problem is and what needs to be done.

    Key by comparison struggles to keep up and resorts to telling fibs.  His statement that the increase in the age of retirement is required to fund spending increases is disingenuous in the extreme because the increase in age does not start for many years.

    And the Government will have increased costs in contributions to the Kiwisaver accounts of public servants.

    The real danger to National is that it shows how bereft of ideas and thinking they are.  Pretty scary when you think they have only been in office for one term.

    This will be an interesting election. 

  3. Uturn 3

    Good article, Eddie and I agree on the “good, but could be more creative” review. In my opinion, Labour needs someone like the Greens as some kind of influential partner to even out the sensible concentration of attention for the present with an overall destination.

    The Greens as least know there are going to be shortfalls in the future, since no one can simply turn off the metaphorical lights and walk into the ideological sunset, and they’ve made tentative plans. Labour’s ideas will apparently solve today’s problem from a numbers on paper point of view, but they need to realize they are transitioning to somewhere; whether they know where that somewhere is or not. It needn’t change their policy, but could improve their approach.

    If Labour entertained the idea that NZ is transitioning a little more eagerly, they might take a more dynamic view of their otherwise good policy. The Greens recognise that features of population control, employment, health and welfare will necessarily overlap and blend. From their policies we can see that what is good for Health, is also good for Welfare, which also supports Population and Employment, which links up with sustainable practices of land use.

    From street level, it looks like Labour still has the idea that here is Super, more or less in isolation, here is Welfare in isolation, here is Health in isolation. They may do that because it is easier to sell it that way, but the cracks of treating everything as a stand-alone unit become obvious – you point it out well in the article. If the Greens can get their head round a dynamic system (and I mean no disrespect by saying “if they can do it…”) then Labour could be at a disadvantage, long term, by committing to an older system of policy formation. Simply put, I think Labour can learn something off the Greens way of thinking that will improve our situation overall.

    You make other comments:

    “The pension system was never intended to support the average retiree for 25 years as it does now…”

    “Why not allow the transition allowance for anyone over 60 who is too worn out from physical labour…”

    “If you’re stuck going backwards in real terms in your wages anyway, then having another half a percent a year ratcheted off will be nasty…”

    And these highlight the fact that a dynamic system is in effect, but not being appreciated. If pensions must or should be the final hurrah before death, then a new attitude to work must begin: far earlier than when a person enters the workforce. So Super actually has links to education curriculums. The Greens recognise this with their social policy. It may also have links to employment law: if we accept people get worn out from manual labour (and they do, a lot sooner than 65, 60 or even 45) then a new system of holidays must come into effect. Which holidays? Well the old system of Christian holidays plus days in lieu simply isn’t enough or even remotely practical. Maybe Labour day becomes Labour week, instead. Maybe our week becomes a new arrangement of shift days, who knows. Technologies will change, methods will change. But once you start getting creative, you see that you’re not only adjusting Super and retirement age, you’re unavoidably reshaping society and it’s cultural norms. Naturally, if people work less or differently, the “economy” as we know it will change dramatically and the idea of money as a measure of wealth will shift.

    Anyway, I don’t suggest everyone should say hurray for The Greens policy and go vote for them, I just point out their thinking is at a more effective level.

  4. Something as important to get right long term as National Super deserves proper debate and wide agreement. Bundling it with a bunch of election rescue gimmicks is politics at it’s worst.

    Pushing up the age of eligibility severely disadvantages groups with life expectancy in the hight sixties – like Maori males and diabetics.

    • Colonial Viper 4.1

      PG just means that we now have 10 years to get the life expectancy issues with Maori males and diebetics sorted.

      • Tiger Mountain 4.1.1

        Yes CV approach it from the positive angle that the health stats can and will be improved.

      • Pete George 4.1.2

        There’s a problem with that. We are yet to see the worst of the effects of obesity and diabetes epidemics. In some demographics the outlook is not good for improving life expectancy, in fact there are some indications it could get worse.

    • ghostwhowalksnz 4.2

      How are they disadvantaged ? You cant spend the money if you are dead.
      While Maori have a shorter life expectancy – from birth- once they get to 65 the life expectancy is still just under 80 for Maori males
      http://www.stats.govt.nz/searchresults.aspx?q=life%20tables

      • uke 4.2.1

        There is also an argument that because Maori people die younger on average, they are in effect getting ripped off by the social contract/tax system, because they don’t to enjoy as much of the super or health-system benefits they have contributed to during their working lives.

        • insider 4.2.1.1

          But don’t they also earn less meaning they pay in far less yet die of nasty expensive diseases like cancer and diabetes. Maybe they are getting out more in services than they put in

          But how do you decide who is and isn’t Maori and so differentiate who gets paid out early?

          • McFlock 4.2.1.1.1

            But don’t they also earn less meaning they pay in far less yet die of nasty expensive diseases like cancer and diabetes. Maybe they are getting out more in services than they put in

            Seriously, take a step back and just have a look at how insane that comment is. I mean, yes it is possible for people to get into a bit of a tactical fixation and lose perspective around their statements, but this is just nuts. Completely and utterly nuts. Yes, I know it’s a continuation of a point, but seriously. Not to mention the wee slide from “they also earn less” to “they pay in far less” [my italics].

            • The Gormless Fool formerly known as Oleolebiscuitbarrell 4.2.1.1.1.1

              Don’t call people nuts, McFlock. r0b doesn’t like it.

              • r0b

                Oh don’t sulk GF. Everyone flings around labels (me too). I just happen to have a strong personal reaction to the “normal” label, which you triggered. I’m sorry I hurt your feelings!

                • The Gormless Fool formerly known as Oleolebiscuitbarrell

                  For some reason, I really believe that you are genuinely concerned you may have hurt my feelings. Which is nice, but not …what…normal?

                  Fear not, if I my feelings were so easily hurt, I wouldn’t be coming here quite so often.

        • Vicky32 4.2.1.2

          because Maori people die younger on average

          It’s important to note that they are not the only ones..

          • Jenny 4.2.1.2.1

            …..Maori people die younger on average. It’s important to note that they are not the only ones.

            Vicky 32

            Absolutely true Vicky, according to a study published in New Scientist a few years ago. (sorry I can’t locate the link), shift workers die on average seven years earlier than other workers.

            The study identified shift work as being as dangerous to your health as smoking.

            The damage is done through disruption of the body’s natural bio rhythms. Another deleterious side affect of shift work is weight gain, often leading to obesity due to the affect of eating meals when the digestion system is in it’s rest phase. This compounds the problem, as people suffering from obesity also die younger.

            Think of all the women who clean our offices and public buildings during the night, surely among the hardest working and most under appreciated section of the community.

            Most of them will never get to enjoy a pension as it is. This regressive austerity policy will make doubly sure of it.

            Would Labour consider a blanket exemption for shift workers?

            I doubt it.

            • Jenny 4.2.1.2.1.1

              Labour is “bravely” determined to drive an extra nail into Maori and Island shift workers coffin lid rather than tax rich speculators like John Key. It seems that in their commitment to Austerity measures, both National and Labour want to make us pay for an economic crisis not of our making.

            • Colonial Viper 4.2.1.2.1.2

              Anyone who works a regular night shift eg a cleaner or security on 6pm-2am should be quite fine. Its those who do rotating shifts who are in the most trouble eg. some healthcare professionals, mining industry, heavy manufacturing etc. You don’t want to stay in that kind of role for more than 10 years.

              I’m not a fan of Labour’s policy, as I believe that there are many other creative ways of solving the looming NZ super shortfalls (as already pointed out by other commentators). And if anything, the eligibility age should be lowered two years not increased two years.

              But the policy launch has done its job. Showed NZ that only one party in this election is willing to take the future seriously.

              btw plenty of time for the policy to be creatively changed through detailed community consultation once Labour is in power 😉

              • Jenny

                Labour’s savings in retirement policy

                Labour supporters have justified raising the age of retirement by claiming that modern work is less arduous and less physically damaging. That may be true. But workers are working longer hours and the pace of work has increased making it more stressful, not only this but since the invention of the 24 hour society, tens of thousands of workers now work shifts.

                The Working Nightmare

                How Labour’s plan will kill workers.

                “The older the worker, the less tolerant they are to withstanding the adverse effects of shift work… It disrupts the body’s circadian rhythms, that is, its daily cycle, causing tiredness, mental stress, cardio-vascular diseases, gastro-intestinal disorders, menstrual disorders, reproductive system dysfunction and increased accidents.”

                …..working odd hours puts the body under chronic stress, leading to a potentially fatal increase in abnormal heart rhythms. There is also an increased risk of breast cancer. A Danish study of 7,000 women who worked nights found they were one and a half times more likely to be diagnosed with the disease.

                “Often, women who work nights have delayed periods or missed periods. Sleeping patterns are disrupted, so the immune system is affected. People who work shifts are generally off sick more and there is anecdotal evidence it causes depression.”

                If Labour is to persist with this vicious anti-worker anti-woman austerity measure, all shift workers, (especially cleaners), should be exempt.

                • Vicky32

                  All this makes me worry about my son who’s a hospital staff nurse and who works rotating shifts, especially as he’s under 25 – he’s constantly irritable and it’s obvious why.. 🙁

            • Jenny 4.2.1.2.1.3

              A killing policy?

              Ergonomics for schools – A primer: Shift work

              As a human being, you have a ‘daily body clock’ or circadian rhythm (animals have this too). Your temperature, heart rate, blood pressure and mental ability are synchronised so that they are higher during daylight hours than at night, when the body is prepared to sleep and recover from the day’s activities. Even if the normal influences of day and night are taken away, such as natural light and knowledge of the time, this internal clock still works and operates a cycle of between 22 and 25 hours…..

              ……Night workers often suffer from disturbed daytime sleep, which may be due to increased noise, but it is more likely due to the body just not being ready to sleep during the day. This lack of good quality sleep among night workers can lead to chronic fatigue, which can be shown as tiredness, irritability and depression. They may also suffer from loss of appetite and digestive problems……

              ….Workers on late or night shifts often feel isolated from their family and friends because they are working when others are socialising. Family life can be difficult.

              About two-thirds of shift workers suffer from some kind of ill-health…..

              This primer on shift work says that because of it’s deleterious effects of “Night work is not recommended, but if it cannot be avoided, then the following guidelines should be considered:
              Ideally, night shift workers should be not be older than 50 years of age, or younger than 25.”

              Who hasn’t seen an elderly man in a baggy security guard’s uniform hanging off his elderly frame on the late shift.
              Increasing the risk of early mortality by forcing these workers to work for another two years, is guaranteed to save the government even more on more on Super Payments through increased mortality rates.

              A nasty attack on those least likely to fight back.

              A brave policy move? Indeed.

  5. RedLogix 5

    Yet another example of the media screwing the scrum.

    Labour releases a major piece of new policy and again the headline and the first para in the Herald piece are John Key slagging it off.

    • Draco T Bastard 5.1

      Yep, they need to do two or more articles. The release and then the responses from the various parties separately. Of course, the MSM won’t do this as they’re just a mouth piece for NAct.

  6. Lanthanide 6

    This could be an opening for Winston. He was on morning report this morning with a somewhat conflicted message that he didn’t support raising the retirement age, because we need solutions now not in 10 years time.

    Anyway, they can now campaign on: Don’t want National, but don’t want to raise retirement age? Vote NZ First.

    • Idiot/Savant at No Right Turn on Winston and Labour:

      … it’s a cynical, calculated ploy to wedge National against their own base while driving voters to Winston, who is Labour’s only hope of government. Winston, of course, will veto any increase as the price of his support, so its an empty threat, purely for show, dishonest as well as evil.

      A Clayton’s policy?

      It will be interesting to see what the Maori Party think of raising the entitlement age.

      • KJT 6.1.1

        Bullshit.

        Even though I disagree with this policy. And the fact that Labour has not entirely abandoned the Neo-liberal paradigm. I am sure they are bringing it in because they think it is the right thing to do.

        Unlike NACT, who are just going to throw us enough bones, to keep those who are silly enough to support them, docile until they complete another theft.
        Which will take them until 2014.
        Then they will want Labour back in to build things up again so they can repeat the theft in future.

        What is UF policy, apart from acting as driver/lookout for the thieves, that is?

  7. Blighty 7

    Rubbish. No party would ever engage in such a high risk play. Sacrificing 2 or 3 MPs in the hope that another party will then get over 5% and hoping that that party will be willing to work with them.

    Labour wouldn’t have done this if they thought it wasn’t the right thing to do and a vote winner.

    • Lanthanide 7.1

      Labour wouldn’t have set out to do it deliberately, I agree.

      It was probably a potential risk/outcome that they considered when drafting the policy, though, and pragmatically speaking it’s a better outcome for them than not forming government at all.

      • Jenny 7.1.1

        I don’t think you guys get it.

        Labour don’t want to win.

        They have made that very clear.

        The reasons are twofold.

        1/ Not being fully divorced from their support for neo-liberalism – in the face of the recession, Labour would have little choice than to impose an austerity package different to National’s only in the details.

        2/ Labour have a history of sectarian disdain for parties to their left. As a result, in the past Labour have favoured conservative coalition partners over left leaning ones. If forced to lead a coalition of left leaning parties, Labour would rather pass up the chance to regain the treasury benches till next time.

  8. Gosman 8

    Bravo Labour on the plans to increase the retirement age. It is the one policy area which Labour has it all over National. If the rest of the policy mix wasn’t such leftist nonsense it would almost make me think about voting for them. It is so refreshing to see a political party be willing to make a politically hard but necessary policy decision public before an election.

    • millsy 8.1

      Can you please explain to me why you think that having the lowest rate of senior poverty in the OECD is unacceptable to you, and if you are willing to accept a sharp increase in homelessness among the elderley?

      • Gosman 8.1.1

        Sorry???

        Homelessness has little to do with if someone is elderly or not and strategies to tackle it should be broadbased not focused on one particular demographic.

  9. Bill 9

    Numbers illustrative only.

    If there were 1 million kids between the ages of 1 and 18 being supported financially forty + years ago when it was commonplace to have a single ‘breadwinner’ in the family supporting generally larger families than today. And if women were generally excluded from the workforce 40 years ago, meaning that children and an adult were financially supported by a single wage and the taxes paid from it. And if the average life expectancy is not higher than 65 +18, then there are no more people for society to support financially than there was previously.

    Forty years ago, the people retiring today were children being financially supported by a workforce, proportionately half of what it is today. (PAYE etc going to provide welfare provisions) and today, families are generally smaller than in previous decades.

    So it seems the situation is that the population ‘bulge’ is simply moving from the lower age bracket (children) to the older age bracket (those same children in older age). Meanwhile our workforce encompasses a larger proportion of the population (roughly x2 since women no longer being excluded)

    And many people die before retirement age. And the majority die before the age of 83 (retirement age + 18).

    Seems to me that if ever there was an argument for people before profit, then this is it.

    • Colonial Viper 9.1

      More people working Bill, but earning a smaller share of national income individually than ever before.

      • Draco T Bastard 9.1.1

        And that is the problem that Bill is highlighting. The neo-liberal reforms have made it so that a lot more people are working harder than ever before while getting less. The result is, of course, rampant poverty.

  10. Joshua Hitchcock blogs on the problem for Māori with Labour’s super age bump and comes to the same common sense flexi-super conclusion.

    The Value of Ngā Tāne Māori

  11. randal 11

    the fact of the matter is that giving anything to anybody is an alien concept to national party voters.
    Their personal psychology is that there is never enough to go round and therefore they have to grab everything in case it runs out.
    so acquisitiveness becomes psychopathology and then they have to work it out in public.
    boot the tories out I say.

  12. Afewknowtheturth 12

    Eddie.

    ‘No real argument on this. It just makes sense to save now as a country for the retirement glut coming in the 2030s. National’s suspension of contributions will mean $30 billion less in the Fund in 2050. ‘

    This sort of statement is utterly absurd. Nobody in their right mind expects western societies to even exist in 2050, let alone know how much shorfall there will be in government funds.

    The International Energy Agency admitted Peak Oil was in 2005 and the only reason there is no panic in ‘the markets’ is becaise most people are totally unaware and many of those who are believe the bizarre drivel the IEA came up with that yet-to-be-dicovered oil, equivalent to four Saudi Arabia’s in the short term and ten Saudi Arabia’s in the long term, will keep the world supplied: the reality is, of course, that little of that ‘yet-to-be-dicovered’ oil actually exists and what does exist is in in places where it cannot be easily extracted. So the entire global economy will be down the drain by 2020, if not well before then.

    And there is the matter of abrupt climate change. Every credible report on climate change points to the Earth becoming largely unhabitable by the end of this century, and many reports indicate we will reach the point of a largely unihabitable planet by mid-century. The video embedded here expalins it both the oil and the temprature predicaments succinctly

    http://guymcpherson.com/2011/09/couchsurfing-with-my-soapbox/

    Alternatively, if you prefer the mathematical approach, the most important video you will ever see (or not, as the case might be if you don’t bother to look):

    http://www.youtube.com/watch?v=F-QA2rkpBSY

    The total unsustainability of present financial arrengements is clearly explained here:

    http://www.chrismartenson.com/crashcourse

    It is incredibly easy to get ‘up to speed’ on all this stuff but people seem to find hanging on to delusions preferable to becoming informed.

    So, I and others go over the same things week after week and nothing sinks in.

    It all reminds me of what Einstein said: “The difference between genius and stupidity is that genius has limits.” (Or words ot that effect)

  13. Here is my view on Labour’s very,very unfortunate plans

    • The Gormless Fool formerly known as Oleolebiscuitbarrell 13.1

      Phill Goff has shown his true allegiance: That of the financial terrorist scamming the world into indentured slavery!

      Yeah, that’s what he’s doing, Ev. There are no shades with you, are there?

      • travellerev 13.1.1

        As far as the big parties are concerned not really, no.
        If they perpetuate the international financial terrorist scam to the detriment of their people they have made their choice. 

        Here is a nice one from Max Keiser on RT today: http://www.youtube.com/watch?v=P8sK9gZEUac&feature=player_embedded

        • The Gormless Fool formerly known as Oleolebiscuitbarrell 13.1.1.1

          Raising the age of entitlement to superannuation by five years over a twelve year period is terrorism?

          Really?

          Really?

          Are you sure?

          Really?

          • travellerev 13.1.1.1.1

            Perpetuating the fiat currency hoax and trying to tax people to the hilt because you have been gambling and expecting governments to put austerity measures in place so you can keep on rorting is. Did you watch the Max Keiser video? Here’s you next assignment Crash Course.

            Here is another great series of documentaries about the financial crisis:

            Inside the meltdown

            Not that I will be holding my breath that you’ll be watching them but who knows there might be others reading this.

            • The Gormless Fool formerly known as Oleolebiscuitbarrell 13.1.1.1.1.1

              No, Ev. I won’t be watching them.

              Because I am normal.

              • r0b

                Baaaaa!  Baaaaa!

                • The Gormless Fool formerly known as Oleolebiscuitbarrell

                  Yes, r0b. It is conformist in the extreme to refuse to believe that the Labour Party are engaging in terrorism by raising the age of entitlement to superannuation by five years over a twelve year period or that Mike Moore is part of a secret cabal of bankers keeping everyone poor.

                  I balance this conformism out by insisting on believing that Jon Denver and Martina Navratilova are the same person.

                  • r0b

                    Don’t reckon that Ev’s links were about those topics GF!  

                    Sorry – the sheep thing was just a reaction to “normal”.  What folk usually mean by “normal” is “like me” – hadn’t picked you for a “mainstream New Zealanders” type…

                    • The Gormless Fool formerly known as Oleolebiscuitbarrell

                      I would rather set fire to my own legs than watch Ev’s videos. However, she considers every problem in the world can be explained by the so-called 911 conspiracy and/or the so-called international banking conspiracy so I have just guessed that her links were about that.

                      Was I wrong?

                      I think those birther consipracy people are not normal. I think people who eat meatloaf are not normal. And yes, I think Ev is not normal.

                    • r0b

                      Was I wrong?

                      On this occasion, yes you were.

                      I think those birther consipracy people are not normal. I think people who eat meatloaf are not normal. And yes, I think Ev is not normal.

                      I think you’re a bit too quick to be flinging round the labels.

              • Draco T Bastard

                No, you’re a fucken idiot and delusional.

                • The Gormless Fool formerly known as Oleolebiscuitbarrell

                  Draco’s unafraid to hand out the labels, I see.

                  Good on you, man. Coming from you, that means a lot.

                  xxx

  14. The Gormless Fool formerly known as Oleolebiscuitbarrell 14

    I know the authors at the Standard always have a keen eye for a flip flop.

    Must have missed this one, I guess:

    http://www.radionz.co.nz/news/national/79832/government-says-no-to-raising-pension-age

    In July 2011 Mr Goff was saying:

    Labour leader Phil Goff says his party has a plan to meet the future costs of superannuation without raising the pension age.

    • r0b 14.1

      GF I know you always have a keen eye for lunacy.  So should we ignore double downgrades of international confidence in our economic future (that mention out superannuation costs as a risk)?  Or should we – I dunno – do something?

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 14.1.1

        I think the raising of the age of entitlement is an excellent and inevitable policy. However, I just know that if John Key ruled something out and then did that very thing three months later, you would all be calling him a liar. In fact, the post points to a difference in Key’s position over a seven year period and makes much of it as an inconsistency. Yet a 180 degree turn in 3 months by Goff is somehow laudable.

        • r0b 14.1.1.1

          Hate to get all semantics on you, but Goff didn’t rule anything out.  

          Key has ruled out changes to the retirement age (big time).  

          Goff said he had a plan that didn’t require it.  Then circumstances changed (downgrades) so the plan changed.

          Sound pretty reasonable, no? 

          • The Gormless Fool formerly known as Oleolebiscuitbarrell 14.1.1.1.1

            So Key’s change of plan in relation to raising the rate of GST was a reasonable response to the changed economic circumstances between him saying he wouldn’t and him raising it?

            Or is that different semantically, or in some other way?

            • Puddleglum 14.1.1.1.1.1

              Not sure how the changed economic circumstances had anything to do with the GST increase.

              Wasn’t that whole ‘tax switch’ thing aimed at being fiscally neutral and setting us up for a ‘fairer’ tax system rather than being a change brought about by straightened economic circumstances?

            • r0b 14.1.1.1.1.2

              Key tends to make strong promises (no GST raises, no super raises). Some he keeps (super), some he goes back on (GST). When he breaks a promise it’s fair to call him on it.

              Goff’s statements are more circumspect. In this case he had a plan, circumstance changed, he changed the plan.

              So yeah – different ballparks. Key needs to tone down the unrealistic, grandstanding promises.

  15. It needs to be emphasised that it is not only the physical nature of manual, often unskilled, work that undermines human health.

    We’re not just talking about back problems.

    Just as important is the stress associated with a lifetime of low status work carried out (by adults) at the beck and call of others (unemployment is even lower status, of course, and represents the Scylla to employment’s Charybdis). That is one of the most stressful and dispiriting situations that the human animal can experience.

    I made a similar point here, in yesterday’s Open Mike. The link in that comment points out the stressful nature of being low status (especially true in an increasingly unequal society).

    Increasing rates of depression and anxiety are related to increased feelings people have that their lives are not under their control. (I can provide links to support these claims – mentioned in other comments I’ve made in the past on this site.) The employer-employee relationship is a prime example of the structural imposition of this experience of a lack of control.

    The aim should be to reduce people’s reliance on the employee-employer relationship for their material survival, not increase it.

    A UBI (or whatever the appropriate acronym is) seems more and more appealing. 

    As for freeing up tax money for health, education, etc. … tax cuts anyone?

    It’s an open door for the next round. Why do you think ACT are in favour of raising the entitlement age? 

    • Bored 15.1

      Nicely put Puddle. When I saw comments on the raising of the age I thought that nobody on either side was thinking at all. Somebody is, well done.

      My take is that the social allocation of work, the age and gender who do it , and the ascribed economic value needs to be examined. For example my generation are sitting in mortgage free homes earning the most we ever have and with heaps of surplus cash we probably dont need doing commercial work with low social value. Meanwhile young people with high needs and families are out of work or underpaid…..myself I would rather be paid to retire at 60, give my job to somebody who needs it and made to spend some time working in an educational institute passing on core life / commercial skills in order to qualify for the pension.

      • Puddleglum 15.1.1

        My take is that the social allocation of work, the age and gender who do it , and the ascribed economic value needs to be examined.

        Yes, that’s very true.

        We’d have to be one of the few societies that doesn’t explicitly acknowledge the changing nature and needs of work as we age (let alone other differences between people).

        Apparently, one theory for human longevity is the adaptation of ‘grandparenting’ and its value as an aid to reproduction/cultural reproduction.

        Erikson called this tendency ‘generativity’ – the need to ensure that the next generation are well supported – and it is a characteristic of mid to late adulthood. There’s no support for that progression and, as you point out, and paradoxically, maximum individual income (and, sometimes, minimum outgoings) kicks in at the point when many people are predisposed to think about something other than their own individual needs.

        Irrespective, it’s also well known (in the literature on wellbeing) that a simple and incredibly effective way to improve  wellbeing is to be altruistic.

        There’s a lot of evidence and support for what you suggest, and for pushing policies accordingly. I don’t mean forcing people to abandon ‘normal’ jobs against their will, but the right structure needs to be there to give people the chance to be more human without putting their survival on the line. 

        • RedLogix 15.1.1.1

          We’d have to be one of the few societies that doesn’t explicitly acknowledge the changing nature and needs of work as we age (let alone other differences between people).

          Because mostly we only measure the worth of people by money.

          • Bored 15.1.1.1.1

            Which is probably where I suspect Puddlegum and myself are going, i.e suggesting money might not be the best determinant of what is socially useful or individually satisfying. The prescriptive thinking around money is laced with the poison of oppressive “needs”.

  16. Deadly_NZ 16

    In the realms of “the sky is falling” is this little gem by DPF in the granny Herald. I had to read it twice to make sure that my eyeballs were not deceiving my brain.

    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10762233

  17. randal 17

    yeah randal read fatboys guff in the herald and its all crap.
    the byline picy looks like a trailer for a bad british horro movie.
    hell no, its real and its happening here.
    The only thing he knows for sure is where are the sausage rolls.
    and the KEY issue is will the nats give out free rubber chickens to the nats faithful.

  18. Afewknowtheturth 18

    Gormless.

    ‘No, Ev. I won’t be watching them. Because I am normal.’

    Normal is trapped in the Matrix, totally uninformed and refusing to become informed, believing that ignorance is strength and freedom is slavery (as George Orwell put it).

    That is why exactly NZ society is ‘fucked’, along with all other industrial societies.

  19. Jenny 19

    After a separation lasting more than 20 years, Labour finally get their ACT together.

    Zealand First leader Winston Peters, who said there was no need if KiwiSaver was ”cranked up” and the Government lifted economic growth and began to buy back overseas-owned assets.

    New Zealanders were being forced to fight over ”pieces of a shrinking cake” instead the size of the cake being increased, he said.

    ”Many people in their sixties are simply unable to work and employers do not as a rule employ older people.

    ”It is mean spirited to expect a person who has raised a family and paid his or her taxes to go out job seeking at the age of 66 – particularly if there are not enough jobs to go around as is the situation now.”

    The Green Party’s policy is to keep the retirement age unchanged at 65, but co-leader Russel Norman says an urgent national conversation on raising the age should now be held.

    The ACT Party said Labour was ”finally” promoting a sensible idea.

    Stuff.co.nz

    After deliberately alienating ALL of the most likely contenders for the role, it seems that Labour may have gained a potential new support party.

  20. Jenny 20

    While the Labour Party becomes more Narrow, the Catholic Church jumps aboard the financial speculation tax bandwagon. This is becoming a very broad movement indeed.

    The Catholic Church’s Pontifical Council for Justice and Peace released a document this week calling for, amongst other things, taxation measures on financial transactions.

    http://www.radiovaticana.org/en1/Articolo.asp?c=532223

    My question is:

    Why is the New Zealand Labour Party “bravely” prepared to embrace a regressive austerity measure like raising the age at which flax roots Kiwis can retire, but too scared to even discuss, the benefits of a Financial Transaction Tax targeting the bankers and other financial speculators.

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