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.