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English puts super back on the line

Written By: - Date published: 1:41 pm, March 4th, 2017 - 93 comments
Categories: bill english, superannuation - Tags: , , ,

In what was apparently a pretty dire interview on The Nation this morning, Bill English dropped one bombshell:

Bill English won’t make same superannuation promise as John Key

Talking to Three’s The Nation, Prime Minister Bill English said people need to know what’s happening before the election, hinting there could be tweaks made.

I’m surprised, and I’m going to say good on English for committing to getting his policy out there before the election.

But with Mr Key’s departure, the fiscally conservative new Prime Minister says it’s a chance to “reset” expectations, with an aging population and more people working into their late 60s.

“I haven’t made the same undertaking as John, so we have the opportunity for a bit of a reset there.” But whether that means a change to the age of eligibility or its annual indexing to wages, he won’t say. “You’ll just have to wait and see. We would not anticipate any drastic changes.”

So we have a complete reversal from 2014. This time round it is Labour promising to leave super unchanged, and National proposing changes. For the record I believe that changes should be made to reduce the cost of super (as long as any rise in the age of eligibility has exceptions for manual workers or others whose health forces early retirement). Given our population structure we need to make savings in the cost of super in cases where the elderly are able to take care of themselves, and use the savings to reduce poverty and create opportunities for the young.

In short, I think English is right on this. For a change. Sure would have helped if he hadn’t stupidly gutted the Cullen fund though.

93 comments on “English puts super back on the line ”

  1. Draco T Bastard 1

    Sure would have helped if he hadn’t stupidly gutted the Cullen fund though.

    In what way?

    It’s not money that’s going to keep all of us out of poverty but productivity and our productivity isn’t increasing enough because we’re not diversifying enough. We’re still far too dependent upon farming especially in a warming world where we’re going to have to regenerate most of our farmland back into native bush.

    The biggest problem that we have, IMO, is that we keep focussing upon money rather than the reality that surrounds us.

    • Sacha 1.1

      “In what way?”

      He has renounced a way to make the future cost more pre-paid, and without offering any others.

      • Glenn 1.1.1

        Agree.

      • Draco T Bastard 1.1.2

        You can’t pre-pay the cost. No matter what, all that will be available is what will be physically available through the work done at the time.

        And that comes back to productivity and the fact that productivity isn’t rising fast enough to have everyone retire at 65.

        People try to put it in terms of money but that just hides the physical reality and thus prevents understanding.

  2. Antoine 2

    Seems promising

    A.

  3. English said he would let voters know what National views on Super before the election, but regardless of what he says, and what Labour might say, if NZ First call the shots in forming the next Government then any changes to the entitlement age or indexing of payments are likely to be one of the first and most emphatic things off the negotiating table.

  4. Carolyn_nth 4

    On the Nation discussion about English’s comment about super, they talked about the possibility of changing the 10 year rule for immigrants to 25 years. they also talked about how NZ First would influence a 4th term Nat-led government, by vetoing any change to age of elligibility.

    The last I looked, the NZ First policy was that the amount of eligibility for super was related to the amount of time a person has lived in NZ. This then stops the situation where Kiwis who have lived overseas – in the UK and Aussie mainly – have their income from overseas pensions gets deducted from their NZ super entitlement. Thus WINZ forces people to apply for overseas pensions, of which the Aussie form is a trial.

    the NZ First policy looks to me much easier to administer, and also responds to criticisms of recent immigrants getting the full entitlement of super.

  5. Lots of moving targets.

  6. Sanctuary 6

    Change the age of super eligibility? Bye Bye Bill.

    • NewsFlash 6.1

      The age of eligibility should NOT be changed, but I don’t understand why we’re paying millionaires and the very wealthy, personally I think asset testing is the only fair change that can be made to the super system, the point that the Nats simply didn’t care about the future of ordinary Kiwi’s by decimating the super fund set by Cullen is evidence enough to know who will likely bear the brunt of any changes.

      Failure of the Nats to recognise the looming problem of the number of super recipients as a percentage of the number of employed will be a serious problem for whoever is in charge.

      Failure to have a super scheme that is payed for by the employer is the BIGGEST mistake of all, wages are too low to expect ordinary workers to fund out there own income, in places like Aus, where the super has been going since the 80’s, has generated a huge amount of wealth for many, being redistributed throughout the economy, the difference in foresight (Aus) and the head in the sand policy from the Nats.

      Asset testing is the only Fair way to alter the current scheme, those who don’t need it, shouldn’t receive it.

      • dv 6.1.1

        There is a form of asset testing by the tax system.

        • Carolyn_nth 6.1.1.1

          Yep. And on the Nation today, Blinglish said the super fund was in a healthy state – better than they had anticipated because of the increased number of 65+ people working.

          Of course, while working, part or full time, seniors are also paying tax.

          The problem with the wealthy is too many avoid paying tax. For wealthy and diligent tax payers there probably is little money (if any) for them in applying for super. It isn’t automatically given to people when they reach 65. Why bother applying if it all goes in tax payments?

          • dukeofurl 6.1.1.1.1

            Something like 20% of the super payout comes back in taxes from the over 65s.
            There could be ways of getting those who are asset rich but cash poor .
            We used to have death duties but national gutted that along with gift taxes and the pay as you earn super that Muldoon abolished.
            Is there no end to nationals clumsy handling of these issues.

      • Draco T Bastard 6.1.2

        The age of eligibility should NOT be changed, but I don’t understand why we’re paying millionaires and the very wealthy, personally I think asset testing is the only fair change that can be made to the super system

        You’re asking the wrong question.

        Why are people paid millions of dollars?
        Why are people paid for ownership of a business but do no work?

        The problem isn’t that we’d be paying everybody a universal income, the problem is that we have millionaires.

        • Good framing of the problem.

          This is why folding super into a UBI as a negative tax intercept instead of the current system is actually more sustainable: Because it allows us to raise the effective level of tax on millionaires, effectively “eating” their UBI without ever talking about eligibility levels or having to spend money administering asset tests.

        • NewsFlash 6.1.2.2

          DB

          You know the answer to your questions, but at the moment, this is how things work in the real world, some millionaires actually worked pretty damn hard to get there, but as you know there are many freeloaders as well.

          Many wealthy retirees boast about their benefits around investment and how little tax they need to pay, at the expense of those who don’t have the same opportunities.

          There will always be individuals who have more than others, no matter what the socio economic system is, some seek material rewards in life, while others find value in non material rewards.

          A UBI is not answer to the problem either, as it does not address the route cause, it’s just a sticking plaster, a temporary fix.

          • Draco T Bastard 6.1.2.2.1

            some millionaires actually worked pretty damn hard to get there

            IIRC, it’s less than 5%. All the rest inherited it.

            And that 5% is dropping.

      • mikesh 6.1.3

        The surcharge, introduced by Labour in the eighties and scrapped, somewhat reluctantly, by Bolger in the early nineties, achieved much the same thing.

        • dukeofurl 6.1.3.1

          Not at all. Bolger increased the ‘surcharge ‘ from 20 to 25% and exemption lowered ,contrary to their election promises and made other changes such as age of entitlement moved up from 60 to 65 ( 2001)
          It was Peters and his coalition which forced Bolger to backtrack after 96.

          http://www.goodreturns.co.nz/article/976486067/super-history-understanding-recent-changes.html

          Muldoons scheme had pension at The original legislation had provided for gross pensions to be set at 80 percent of gross ordinary time wages.

          1998 the National minority government introduced and passed legislation that:
          • removed the 65 percent “floor” on the pension wage ratio
          • specified that New Zealand Superannuation was to be adjusted on the basis of prices subject to a new 60 percent pension-wage ratio floor.

          Which was partly reversed :
          Labour-Alliance coalition which took office after the 1999 election reversed the pension-wage ratio decision of the previous government. It announced the restoration of a 65 percent floor for the ratio of the married couple rate of NZ Superannuation to average net ordinary time wages

          Along with $2 billion per year to the Super fund

          You see how national has wrecked the whole process all along

      • Thinkerr 6.1.4

        Superannuation is not another welfare benefit, that’s why means testing is inappropriate.

        It’s also why it should be regarded separately in the government accounts, and not tinkered with to balance the books.

    • fisiani 6.2

      Having to work another 3 or 6 or 9 months is hardly political poison.

  7. infused 7

    It’s not surprising. He’s always said he’d change it.

  8. Ad 8

    If Prime Minister English proposed limiting NZ SUPER eligibility for immigrants who’d been here 20 plus years, I’d support it and I think many other New Zealanders would as well.

    This government won’t change just on housing issues alone.

    • I don’t quite understand – if someone has made their home here for over 20 years you would want to restrict or limit their entitlement to NZ Super?

      Have I got that right?

      and if that is correct – why do you think that’s a good idea?

      • Ad 8.1.1

        Limit the liability.
        Retirement Commissioner is very keen on it.

        Need a higher benchmark on immigration.

        • marty mars 8.1.1.1

          maybe those that don’t need it should get a cut amount (to keep the universal bit) or be means tested, or property/capital gains taxed (reduce liability) and those that do – say Māori for instance get theirs early – after all the life expectancy is lower for Māori (less liability) and there are often major commitments for kaumatua from a cultural point of view.

          • Ad 8.1.1.1.1

            Administratively messy and full of bureaucratic make work.

            I think sending a signal to new migrants that we only support permanent super as a benefit only to those with absolute commitment to the country would be proper.

            Could also consider stopping it altogether and permanently for any citizen who is on else as more than 6 months. If they can afford that scale of jaunt, they don’t need it.

            Need to keep universality but shave off the edges indirectly.

  9. Michael 9

    Do you have a private pension fund, Anthony Robins, just like Bill English (albeit paid by taxpayers)? I also think the qualifying age for NZ Super should be increased, except for those who cannot work because their health won’t stand it. But that raises a problem: who gets to determine disability? For years now, a small cabal of second-rate doctors have been making a fortune, conducting medicolegal assessments of disability for ACC, managing insurers and, now, WINZ. In these characters’ opinions (which the legal system treats as sacrosanct) everyone can still do a full week’s work, irrespective of their health condition. It is virtually impossible to challenge the ipse dixit statements of the medical police. Without a clean out of their ranks a fair means of assessing disability will remain impossible and hundreds of thousands of elderly New Zealanders will be shafted. Of course, few of them are likely to be within Labour’s new target demography, so I guess there’s no harm in whacking the retirement age up to 75, as Treasury recommended a few years ago.

    • weka 9.1

      On those grounds alone the retirement age should never be touched. If we ever manage to change the culture in NZ away from bashing ill and disabled people or entrenching the deserving ill meme, then maybe we can then look at fair ways to raise the Super age. But in the meantime there is no way to do this policy change that won’t both hurt individuals and add to the culture of bash a sick person that NZ has developed. The state certainly is not to be trusted as per your examples of ACC and WINZ (I would add the MoH in there too). Also, where there is a clear conflict of interest between people’s need to cap budgets and them being in an assessing role, it just shouldn’t be happening.

      • Carolyn_nth 9.1.1

        Yep. And for seniors who only get super and don’t own property or have savings, super isn’t enough to live on. They may physically be up to working part time to supplement their super, but not sturdy enough to work full time.

        • Michael 9.1.1.1

          That’s not what the medical police will report (in return for the usual consideration).

    • Red Hand 9.2

      An accurate means of assessing disability is preferable to a fair means because an accurate assessment will be more predictive of outcome, based as it is on research findings.

      https://www.ncbi.nlm.nih.gov/pubmed/20482853

      Fairness by comparison is too subjective, exemplified by your presumably subjective “second-rate doctors” assessment, which is a trivial opinion, unless you have some credible data to back it up.

      • Michael 9.2.1

        Medicolegal assessment of disability is now iredeemably politicised. Not sure how to post links here but there’s plenty of it. The people shafted by your friends, Red Hand (aka the “second rate doctors”) feel believe it is far from “trivial”.

  10. fisiani 10

    Bill might raise the age of eligibility to 75 or perhaps 70.

    • I hope that’s his announcement, if that’s all there is to it, I can’t see him winning the election with that anchor around his neck.

      Boomers are just starting to get Super, if he takes it away from them they are gonna be mad as hell.

    • NewsFlash 10.2

      What would Bill do for an income for 5 to 10 years if he did that.

      I thought yo would be more concerned about the non citizen changes that affect those who have not in lived in NZ for 20 years.

      • fisiani 10.2.1

        The 75 year eligibility will not come into force until 2058 . A raise of just 3/12 every year. i.e. 2022 66 2026 67….

  11. mac1 11

    “Hence, Prime Minister John Key has said he would rather retire than touch Super. Labour campaigned on raising the age to 67, but lost badly, and have now backed down” 25 May 2016.

    http://www.stuff.co.nz/national/politics/80223200/Budget-2016-Can-we-afford-the-superannuation-status-quo

    Six months later, Key retires.

    Meanwhile English states that he is not bound by a John Key promise, which is surely Party policy, and two elections were fought with this as a major difference between Labour and National, no doubt influencing many superannuitant-oriented votes.

    Another broken promise? Was this a reason for Key’s hasty departure?

    • Draco T Bastard 11.1

      Was this a reason for Key’s hasty departure?

      Probably.

      National know that they’ve screwed over the economy and that they’re going to have to put the bill on the poor so as not to tax the rich.

      • greg 11.1.1

        this is from the party that sabotaged every attempt to pre fund super in the last 40 years these wankers cost the cullen fund billions they cut kiwi saver this is the party that has blown up the property bubble to point of creating a debt bomb and savers are paying by being screwed over with low interest rates i am gen x there is no way we should except being fucked over by national they were quite happy to screw our future for the benefit of property owning baby boomer’s .its about time the national reap what they have sowed

  12. Enough is Enough 12

    r0b I have never quite understood your support for cutting the eligibility to Super.

    Increased costs for Super is not a reason to make cuts. If you buy into that argument then you should support National with all their other cuts. Lets look at health, with an ageing population costs are increasing. Lets just cuts people’s eligibility to public health.

    That is what National like to do.

    Or we could look at the other side of the balance sheet and see how we fund Super. Lets collect tax to pay for Super rather than cut it.

    • solkta 12.1

      Super and Public Health are not comparable. Public Health is available to all citizens whether they need it or not. Super is available to only those over 65 whether they need it or not.

      • Enough is Enough 12.1.1

        No shit sherlock

        The point I am making is you don’t cut elegibilty to something because it is getting expensive. You get a better funding model.

        The right cut cost

        The left look after people and find ways to fund it.

        • solkta 12.1.1.1

          The current Super model is looking after wealthy people by giving them a welfare benefit they do not need. My father has used his for spending money on his annual European holiday. That is not a left wing thing but just stupidity. These people have a sense of entitlement because Muldoon made them a promise that was not sustainable.

          • weka 12.1.1.1.1

            “My father has used his for spending money on his annual European holiday.”

            You mean he chose that over paying rent and eating?

            • solkta 12.1.1.1.1.1

              I’m not sure what you mean. I think my father paid rent for three years when he was first married.

      • Actually Super prevents a lot of issues that would cause problems to the health system. It’s led to us having a markedly low level of poverty for seniors. It’s been a highly successful, if costly, policy.

        There are ways to transition to a less costly system that’s less of a giveaway to more wealthy seniors while still retaining that success. Further eligibility tests are costly and will make Super more difficult to get, so seem like a poor answer, even though the principle behind them is reasonable: people who can already support their own retirement will need less government assistance. I highly suspect Bill’s answer is going to be to simply cut elibility, when it’s at least partly his fault the government will have difficult affording Super costs soon, because of his wasteful tax cuts and refusal continue payments to the Super fund.

        (Of course, there will need to be some progress about that transition by the time boomers are solidly on Super, because it will quickly escalate costs if we continue to fund retirement for the already-wealthy when so much of our population falls into the qualifying bracket for Super, so he’s right to have the discussion)

        • Carolyn_nth 12.1.2.1

          RNZ article tonight, says that Super has become more affordable than 15 years ago, because people are working for longer.

          Little says:

          <blockquotethe government's decision to stop contributing to the New Zealand Superannuation Fund meant there was now a $20 billion funding gap.

          Mr Little said Labour would not raise the age of eligibility and would resume making payments to the fund.

          • solkta 12.1.2.1.1

            I think you mean to say that the RNZ article says that English says..

          • Matthew Whitehead 12.1.2.1.2

            Super being more affordable at the moment doesn’t change the maths of it not being affordable in its current form in the long-run. I don’t support changing the age or means-testing as the best solutions, but we can’t continue to subsidise retirement for people who are already wealthy in perpetuity.

            Besides, even though Super has done great things, it was never conceived as what it was today. Most people died before being eligible for Super when it was implemented, it’s just nobody ever updated the ages to keep the policy the same, so it’s gotten progressively more generous as medicine has kept people healthy longer. It’s not unreasonable to say that we can try and keep the good things its done for keeping seniors out of poverty, while still setting it up so that we’re actually spending the money where it’s needed most, while still maintaining the accessibility of the fact the only gating to Super was age-based.

            If we set up a proper basic income system that’s properly funded, we can have it do the same thing Super’s done for the whole population, on a sustainable basis, and it will be much harder to repeal or “reform,” because every single voter will be on the side of keeping it for self-interested reasons, not just seniors and soon-to-be-seniors.

            • Carolyn_nth 12.1.2.1.2.1

              I don’t know the figures for super re- continued sustainability with the current system.

              I do agree we need a very good, comprehensive, cradle-to-the-grave social security system. That means a big overhaul of the entire system as various aspects of society are interwoven.

              Everything now is tarnished by the growing/entrenched wealth and income inequality gap — most noticeable at the top and bottom 10%.

              I notice many comfortably middle-class people in their 60s and 50s have health/medical insurance. So they get fast-track attention, while the elderly relying on the public system are languishing on big queues, waiting for attention.

              And elderly on fixed incomes in Auckland are struggling with ever increasing rates, rent and other essential bills. Meanwhile younger people are also struggling to find affordable housing, a living income, to pay the bills, etc.

              Meanwhile the speculators, real estate moguls and investment bankers are creaming it.

              • Whispering Kate

                I don’t know who your friends are but the modestly comfortable middle-class I know , got a hell of a fright when they reached 65 at the rate their Private Health Insurance was rarked up. There is nobody I know who is modestly comfortable who is still paying out their monthly premiums. Instead they are placing their health in the hands of a precarious health system and going on lists a mile long for treatment. Only the very wealthy can keep up sustained pricey premiums on an on-going long term basis.

                • Carolyn_nth

                  Hmmm. Interesting. I wouldn’t describe anyone I know as very wealthy. Just professional people – from lower level professionals to more business types.

                  Though not all are in their 60s. And only 1 or 2 are over 65.

                  My GP seems to treat me as a bit unusual in not having health insurance – me being a well educated person in an Auckland, renting in a fairly central suburb.

                  Most own their own homes – and one in late 50s in Auckland has health insurance and is a renter. Can’t afford to buy.

                  So, yes, I’d pretty much describe them as mostly modestly comfortable middle class. Maybe a couple could be described as comfortable middle class. But not very wealthy.

        • solkta 12.1.2.2

          Yes, but if we paid Super to everybody that would prevent a lot more issues that do cause problems to the health system.

          I’m not saying that we should leave old people high and dry. A means tested benefit at a similar amount would have achieved the same result.

          • Matthew Whitehead 12.1.2.2.1

            I support a UBI at a level comparable to NZ Super and Super being rolled into that UBI with conditional assistance for those in additional need, combined with a tax package that will pay for it in a way that will effectively get us to the same place as means-testing, and will also treat the UBI as a negative income tax for those not in employment. For those in employment, we can have a simplified income tax, and they’ll still get a fraction of the UBI if they’re earning under a certain amount, which will likely taper off around $45k annually, but actually depending on what exact settings you use for the UBI and simplified tax.

            Super as-is won’t be there for my generation, full stop, and we all know it, the maths of the costs of super and the demographics of Boomers going onto it aren’t deniable. It’s part of why Kiwisaver was implemented. So we need something new. And trying to get rid of a UBI will be even harder than cutting Super if Labour implements a good one with help from the Greens, and sets the basic income to a level that’s livable, say starting at $20k for every adult. (There are arguments it should go higher, but $20k is definitely affordable if coupled with some basic wealth taxes like a CGT, and starting lower will allow time for the savings from universalising benefits to become apparent. Savings? Yep, it’s likely to reduce medical costs, lower the number of remaining conditional benefits needed, and address) This will simplify welfare provision, get most people out of the WINZ office, and let them focus on actually providing help to people who genuinely need it instead of trying to kick people off benefits.

            Means testing is actually an expensive and inefficient way to solve the problem, it will make it even less convenient to apply for super than it is now, and it frames the issue the wrong way.

            Besides, I don’t want someone whose wealth suddenly dries up to suddenly have to re-apply. We should make the process easier than that, and integrating a UBI into the tax system is a great way to do it all easily and transparently.

            • solkta 12.1.2.2.1.1

              I’ve been a supporter of UBI for a long time but I think it would be really hard to sell it to the public. I think it would be great if the Greens and Labour could introduce it but my concern would be that it would cost them an election before they could get it fully implemented.

              • I think any serious attempt at a UBI would need to start at the beginning of a government’s term in office so it could get off the ground and functioning and people get used to the transfers before the next election.

                I think a proper UBI would be unpopular with the wealthy, but massively popular with everyone else. It would play out similarly to Working For Families in terms of the political optics: the Right would hate it, right up until their less wealthy supporters actually started getting it, then it would be political suicide not to support it in some limited form. They’d most likely try to “death by a thousand cuts” it by lowering the benefit level gradually, or repeal the tax offsets required to make it affordable, if they felt emboldened enough to touch it.

                I think you underestimate how well a UBI will play, especially one that’s structured not to entirely abate payments for people who work for what are currently low wages. The real winner of a UBI is people who’d still get roughly half the benefit while in low-paid jobs to supplement their income.

                Much of the incentive against getting into work on the benefit is that abatement formula. If you’re forced to take a shitty job instead of getting kicked off the benefit, you’re often getting paid no different, and you’re in a job you expect won’t be around for long that you hate while you’re trying to find something more permanent. I expect in the long-run, a UBI will actually address unemployment better than Jobseeker Support does. It’s possible that will not make a difference with benefit-bashers, but if they really care about people getting into work they should actually be happy, and they should be happy that it’ll give them better income security, letting them switch jobs more easily, or even take a break between jobs to study something new and change directions.

                • solkta

                  I think bene-bashing is a big thing in this country and not just on the right. You would be basically selling an idea that we should pay people to do nothing, or at least that is how many and maybe most would see it. For a government to implement it at the start of their term it would have to be policy at the election just passed lest they be be toast at the next. I think there is many years of developing the idea needed and perhaps some success in other countries before Green/Labour could win an election on it.

                  • The evidence actually shows it works better than restricting payments in getting people into employment though, so why shouldn’t we do it? And if the government is quick on their feet, they could have two or more years of evidence that the unemployment rate actually went down afterwards.

                    Most people if they’re given the support they need will go on to work. Not all of them, because sometimes there are other issues that come down to more than money, (gang involvement, drug abuse, undiagnosed mental illness can all be contributory to unemployment) but that’s why we’ll still need social workers and conditional benefits even after the UBI replaces Jobseeker Support. It may sound naive to skeptical bene bashers, but humans want to be respected, want to do things, and like extra money. If you can earn more by getting a job, even if you can survive on the UBI, why not try?

                    The idea isn’t to “pay people to do nothing.” Most people want to do something with their lives, it might not work out the way they planned, and they might need help, but most people want to do some sort of work, it’s how we’re wired, and the people who give up are often depressed because they legitimately can’t find work. WINZ’s engagement with the unemployed could then be switched to helping them solve any non-financial issues, to employment coaching for those having legitimate trouble, and basically a more constructive engagement with the community than their current adversarial relationship. At worst, you’re paying some deadbeat to produce bad poetry and get by at a cheap rental eating mince on toast. Besides, you might also get a lot of good poetry in the mix. Or a great New Zealand novel.

                    If they’re getting the UBI and can’t find a job, then they’re more likely to volunteer for charity work or help out their local community, because they’ll be under less time pressure to fulfill WINZ’s crazy requirements. Unpaid work is hugely valuable, and it’s possible a UBI would cause people to re-prioritise their time and make more volunteer hours available.

                    Besides, the workers technically get the UBI too, even if their income tax will sometimes exceed it. The settings I modeled had everyone under the average wage paying less tax, and everyone under about $44k p/a being net UBI recipients, although you could structure things less generously if you wanted to be less aggressive on collecting taxes from sources other than income. It’s perfectly fair to all workers, and it can be paid for largely out of wealth taxes and the direct savings it provides in retiring the programs it’d replace such as Jobseeker Support and NZ Super. My model *assumed* a lot of people would quit their jobs or take less hours, and even that about 50,000 extra people would register for tax to receive the UBI, and it still worked out to make the government an extra $700m compared to the current income tax regime.

                    The media bashed the UBI policies because they made no mentions of cost offsets or savings from the policy, which are natural concerns as the raw cost of a generous UBI could be as much as $70-90 billion. (my model had a gross cost of $72b) If they’re educated about the benefits and the fact that the costs are in fact manageable with reasonable tax offsets, it won’t be so controversial.

                • Draco T Bastard

                  It’s possible that will not make a difference with benefit-bashers, but if they really care about people getting into work they should actually be happy, and they should be happy that it’ll give them better income security, letting them switch jobs more easily, or even take a break between jobs to study something new and change directions.

                  And that is why businesses will absolutely hate it. They’ll have to pay people and treat them well enough for them to come to work.

                  National’s attacks on beneficiaries has nothing to do with how much it costs – it has to do with forcing people into work and thus lower wages.

                  A UBI that actually gives people choice? Yeah, nah, they won’t support that – ever.

                  • Well, that kinda depends. If you’re an employer whose jobs are in high demand, you probably like the prospect of increased portabality between employers, because it will afford you the possibility to poach workers from other people who have been under-utilised. If you’re say, a shitty temping agency, maybe not so much.

                    Of course, on this site I think most people know which of those two types of employer is breathing more heavily down the necks of the National Party, and would love to destroy any UBI as soon as it’s implemented. But it’s not employers who are the majority of beneficiary bashers. It’s middle-class people who don’t know better, but should. The question of whether going full-on wealth taxes and going for a UBI rather than simply funding Super makes sense comes down to whether you think those people are more persuadable by us than by employers. I think they are.

              • Do you mean the coming election?

                • solkta

                  No. UBI is not current policy for either party but just something they are both looking at. When Labour floated the idea a while back they got a bit of a hiding in the media.

                  • Thanks. got a bit scared things were perhaps being rushed. Seems to me english and co are going to have to announce their intentions in perhaps the budget re super,-Andrew and Greens can sit back until after any announcement.

                    • solkta

                      I think you will see a very careful and considered approach by the Greens to UBI. They are not like Labour, they do not change policy as if underpants.

        • greywarshark 12.1.2.3

          Get real Bill English. Why raise super cost, and make people look for jobs that younger people could do. The farce of being forced to go to workshops on how to get a job when you are over 55 is bad enough, but when you are 65!

          And the diminished self-respect you feel if you have to trail round as a rather tired old body looking for some dead end poorly paid job that stops you being able to plan your life! Keep it as it is and require everyone who receives super to do some useful task in the community. Professional people could do pro bono work, there could be reading help, gardening help, cutting back clematis or other weeds, there could be more help with so called wrap around services for disabled people and their carers in the community.

          All would have to find something to do if they were mentally fit. If they were disabled, they would be able to join a group getting transport to their work in their area. Or the able bodied could help out with seasonal work, supervising trainee young people.
          The wealthy would gradually take a 33 per cent drop for doing nothing for the community, and the community services card group would lose 10%.

          Don’t stop older people getting super, get them doing jobs that need doing. Volunteer NZ would be over the moon. People could get one-off help with tasks beyond their capacity. There’s too much of the second childhood with super these days, all centred on self as if money grows on trees. And that’s justified with ‘I’ve paid taxes all my life’. The answer to that is that they were spent on and around you at the time you paid them. Also the fact that super comes out of current tax, and no-one can reliably save enough to fund old age. Funds crash, assets disappear, fraud is carried out by the wealthy looking for a quick return on some deal. Bang go your savings.

          Pay part of the super in NZ vouchers that have to be spent in NZ within a month, and not on food, but on local industry. Be creative, we can afford the administration if we start being more generous with social welfare eligibility and therefore not needing the Scrooges there. Cut it all out and get people registering for volunteer work, and get paid a living wage for that plus a base benefit. Sounds like UBI perhaps?

        • jcuknz 12.1.2.4

          If you asset test super you remove the need to save during the working life.
          although I have read indirect argument against my position above I think any change should be downwards to look after those whose working life is shorter than the average … lets say 50 and ability tested [health-wise] up to 70.*

          I was made redundant at 59 and existed on the dole at $7 a week or fortnight for about a year until Muldoon’s 60 pension took effect.. But was still healthy enough to build a retirement cottage. But also my savings lost out by about 20% because of the reduced work period. So many flies in the ointment.

          I suggest taxation is the way to claw back from those who do not need super but with realistic allowance which doesn’t discourage saving during one’s worklife. By the by with employers contribution I was saving 15% and this had gradually built up over the years from quite a low rate on a low starting salary so I view the Cullen fund deductions as foolishly small. Plus having private funds running it is a complete scam where they earn big salaries while savings suffer,

          *Reasonable in full employment times but today I doubt it. another fly

      • Andrea 12.1.3

        “Public Health is available to all citizens whether they need it or not. ”

        Eventually. If you make it alive to the head of the waiting list. If there’s a specialist in the country. If you can afford to travel to another region.

        And Super is also conditional.

        • solkta 12.1.3.1

          Super is conditional on what?

          • Carolyn_nth 12.1.3.1.1

            Conditional on not getting a state pension from another country, even though the schemes in other countries are not comparable. Amount of state pensions received from other countries (eg UK, Aussie) gets deducted from NZ super entitlement.

            Also conditional on having lived in NZ a certain amount of time.

    • r0b 12.2

      r0b I have never quite understood your support for cutting the eligibility to Super.

      I’m not happy about it, but I find the population maths compelling.

      Increased costs for Super is not a reason to make cuts. If you buy into that argument then you should support National with all their other cuts.

      No, just that (1) some problems are bigger than others and (2) I don’t understand the logic of giving money to rich old people who don’t need it when there poor / young people who need it desperately.

      Lets collect tax to pay for Super rather than cut it.

      Let’s collect tax to fund a UBI, that’s fair. But tax young workers to pay for those old rich who don’t need it?

      • Or we could actually tax wealth, which we don’t currently do. Ignoring the indirect savings you can’t necessarily count on immediately, you’d need somewhere between $20b and $40b to get a really decent UBI rate, assuming you don’t mind flattening and raising income tax a little in return.

        Vic Uni modelled a CGT with about $16.6b in revenue. That’s most of the way there to the low-end figure. You could institute a proper carbon tax to go with that, or a land tax, and you’re probably home. You could also consider financial transaction taxes or estate taxes in the mix, but those two are more about ethical concerns and behaviour change than they would be about serious revenue offsets, and then you could rely on those indirect savings to bump up the rate towards the current rate of NZ Super.

        The advantage of paying for it with a wealth tax is that it essentially means-tests the UBI already, as the wealthy will be the ones paying for most of it.

      • weka 12.2.2

        “I don’t understand the logic of giving money to rich old people who don’t need it when there poor / young people who need it desperately.”

        Shouldn’t you be arguing for an asset/income tested Super then, rather than raising the eligibility age? Given it’s almost impossible for the state to fairly judge the conditions you want to set (illness/disability and manual labour), why are you arguing the age thing rather than wealth assessment?

        And what about the those that don’t have the exemptions you prefer but aren’t rich?

        (and there is the whole ethnicity thing too).

        • NewsFlash 12.2.2.1

          +1

          A quote from a commenter (who I think has been banned), here on TS a few years ago.

          ” The airplane is full of super recipients heading for the south of France for their annual winter holidays”

          Why should the tax payer fund extravagant holidays for wealthy pensioners?

          The commenter also boasted about have a $1M asset that accrued a 6% return for which no tax was required to be paid.

          There are too many pensioners living week to week to have parasites working the system for their advantage, the govts prepared to crack down on dishonest bene’s, they should apply this across the board, as the pension is a welfare benefit, and cost the country more than 10 times of that of any other benefit.

      • Enough is Enough 12.2.3

        If you can find a way of means testing that actually works then I want to hear it.

        Just like the one that applies to student loans where rich kids receive a full allowance because their filthy rich parents have clever accountants and lawyers.

        Means testing does not work as it is too easy for the wealthy to structure their affairs so that they do not have any personal wealth at all.

        As soon as you remove universality of eligibility you create exceptions and rules which bring about loopholes.

        Don’t look at it as young workers paying for rich old people to retire (that is a similar bullshit argument Farrar’s pulls out with student fees – where he argues why should low paid workers be subsidising future lawyers and doctors).

        • weka 12.2.3.1

          “Means testing does not work as it is too easy for the wealthy to structure their affairs so that they do not have any personal wealth at all.”

          Can you give some examples? e.g. if a family has a Trust, it could be a requirement that that is disclosed (this is already a requirement for WINZ I think).

          • Enough is Enough 12.2.3.1.1

            There is a whole industry centred on doing this very thing called Asset Planning. You structure your affairs so that you have no personal assets at all.

            The Weka Family Trust is structured like this:

            Lawyer A and Accountant B are the trustees and legal owners of all the Trust’s assets (the Million dollar home, the million dollar bach, the two Audis, the boat, the diamond rings)

            The Trust is for the benefit of Weka’s two kids. With the trusts assets being transferred to them on Weka’s death. Weka is however permitted use the Trust’s asset’s during Weka’s lifetime.

            Subsequently Weka has no assets. When Weka fills out Weka’s means tested Super application, Weka can legitimately declare zero assets.

  13. mickysavage 13

    My first thought was you fuckers, you have previously sacrificed the possibility of a decent discussion for purely political reasons.

    Similar to National’s treatment of the climate change issue.

    At least now there can be a discussion. And suddenly the parties are reverting to type.

    Labour should go strong with a UBI.

    • solkta 13.1

      First thought? I still can’t get that thought out of my head. National set up Super and have scuttled every attempt since to make it sustainable. Fuckers just does not cover it.

      • dukeofurl 13.1.1

        Its much much worse than even that.

        Kiwisaver they have sabotaged that as well, Cullen Fund, dropped the annual payments.
        Now English has the cheek to come along and hint at the age of payment and or other cutbacks.

        • Sacha 13.1.1.1

          Selfish short horizons are their thing.
          ‘How can I minimise what I pay now regardless of what others will need to pay in future?’

    • Sacha 13.2

      “Labour should go strong with a UBI”

      Yes please.

      • weka 13.2.1

        Someone should. Unfortunately I’ve yet to see a decent UBI proposal* that won’t make some vulnerable people worse off than they are now, due to loss of supplementary benefits.

        *apart from Matthew Whitehead’s, which puts the UBI rate at the Super rate. That still won’t solve the supplementary benefit issue, but it is a vast improvement on the ones setting the rate at the dole rate.

      • Antoine 13.2.2

        >> “Labour should go strong with a UBI”
        > Yes please.

        +1

        Would be another 3 terms for National

        A.

        • jcuknz 13.2.2.1

          Does that matter A. ? National are pretty left wing already and we just need to curb the RW extremists the party contains. I would be more confident of that if Key had not resigned, for all the KDS displayed here. I never liked the guy by the way.

  14. RedBaronCV 14

    If it’s a right wing party proposing this measure then you can bet with certainty on one thing- the rich will get richer & the poor poorer. The rich are just deciding they can’t afford you.

    And just raising the age is a blunt instrument that will still leave trails of issues behind it. The retirement commissioner also needs to stop being a one trick pony.

    So I think it needs to be a wide ranging discussion covering all age groups. There are a lot of questions to look at:

    Do private savings enable any state pension to be whittled away to next to nothing so the working poor become destitute on retirement?
    Younger age groups that cannot afford to own a house are also forced to save for a retirement from meager earnings – how do we cope with that?
    Does user pays retirement further strip assets from the poor – so there is no inheritance for the poorer sections of society and too much for richer sections?
    Do we continue to import labour when older & younger people are being excluded from the workforce despite being willing to work.
    Does the discriminate against those with lower lifetime earnings – working poor & women?
    Do we have a pension bump for the very elderly – say 85 plus ? so any individual planning is to a known horizon.
    What contribution & engagement in our society is needed before we give welfare benefits? Is 10 year’s residency enough?
    Does a lack of pensions increase family size- the classic response to no pensions?

    But at the heart of all these discussions is a need to redistribute wealth in our society much more fairly than at present ( and so that all get the benefits of increasing automation?)

  15. Glenn 15

    Make the superannuation age 75 …as long as those voting on it pass laws that they can’t receive their parliamentary pension until they are 75 as well. This includes all the perks as well..and cut all this free airflight shit for them and their spouses as well.
    Fucking pariahs!

    They will keep first dibs on their sip of the trough while they expect the great unwashed to work longer before they either get super or pass on. And if you are a Maori the chances are you will not make it to super age.

    They tried this in France a number of years ago and after folk rioted and a dozen or so buses were torched the idea was forgotten.
    Alas we are too complacent.
    AUX BARRICADES !!

  16. fisiani 16

    75 it is.Treasury has decreed it.

  17. millsy 17

    The ones who are going to be shafted by this are those who have spent their lives in insecure or low paid work, and have not been in a position to build any sort of asset base, beyond the family home at least, ACC and supported living/invalid benefit claimants in their early 60’s who are hanging out for National Super to kick in so they dont have to justify the right to that income anymore.

    Moving the pension age or reducing the payments is just going to break a lot of people financially and emotionally.

    All you will have is a large number of elderly homeless people, like you see in the US.

  18. david 18

    Saving in the form of “Cullen” fund is from budget surpluses. We need budget surpluses first. Otherwise it is not savings but bets that sharemarket returns will be better than the cost of debt. I don’t want government gambling with borrowed money.

    • Whispering Kate 18.1

      To release more positions in work for the unemployed why don’t they only pay National Super out to people who quit work permanently after the age of 65. This way retirees could get on with voluntary work by the spades and leave vacant positions for the unemployed.

      How many people working past 65 are there in this country – lots I’ll bet- there are some MP’s I can think of, how many sit on Boards or have honorary positions, even sit on boards of DHB’s perhaps. Its great that they are extending their working lives but it isn’t necessary that they draw the National Super while they are at it. Most retirees still working full time will be in jobs that don’t break their backs and they will be bringing in big money – it doesn’t seem right that they can get National Super as well to supplement their overseas holidays or their fortnightly booze bill.

  19. timeforacupoftea 19

    I would promote a 80% income tax on income over $100,000 per annum.
    Leave age 65 to collect National Super.

    Many people were paying 60% income tax on a fairly low wage in the 1960’s 1970’s

  20. jcuknz 20

    I remember my guardian telling me that he paid 19/6 in the pound on the top of his income at the end of WWII. At the time there was no Health Service and he was paying for his wife’s treatment as she died of cancer, and nursing her too..
    In calculating tax do not forget that not all income is taxed at those high rate, only the top %. Also if you pay 80% income tax that is another 15% GST added on stuff you buy [ 95% ] unless you are a business person and can fiddle expenses.

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