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Hickey on how Key’s failing the kids

Written By: - Date published: 11:20 am, October 30th, 2011 - 15 comments
Categories: debt / deficit, john key, superannuation - Tags:

To: Sir John Key (former PM of New Zealand)
Address: Somewhere warm and comfortable
Date: August 6, 2026
From: New Zealanders born from 2002 to 2011, living in New Zealand, Australia, UK, US and Asia.
Subject: Happy 65th birthday

Dear Sir John,

We congratulate you on your 65th birthday.

We hope you are enjoying your retirement after your 24 years of service as an MP and your 12 years as Prime Minister.

We understand you are due to receive the New Zealand Superannuation from the taxpayers which, when combined with your wife Bronagh’s pension, still works out at 66 per cent of the average wage.

We also understand you will also be receiving a pension on top of that from the government from your years of service as an MP and Prime Minister. And we understand you have retained your wealth from your years as a successful foreign exchange trader and investment banker, including the tax-free capital gains made on the various properties you owned.

We had thought of buying you a present to go with your pension, the NZ Super and your own private savings, but we’re a bit short of cash at the moment.

In fact, we’re not that thrilled with some of the decisions you made 15 years ago, which mean we’re not feeling that flush right now.

We are the generation born between 2002, when you became an MP, and 2011, when you won your second of four terms as Prime Minister.

We wonder why you insisted on spending our inheritance to ensure you were voted back in.

We’re now either about to graduate, are unemployed or have just started work. Our taxes are about to go up to pay the interest costs on the debt you incurred and to pay for the healthcare and pension costs of your generation.

We understand your government borrowed $20 billion alone in the 2010/11 year. We remember the appalling earthquake, but most of this was to pay for middle-class welfare measures that Labour and National used during the 2000s to get themselves elected.

The tax cuts you delivered to your fellow wealthy New Zealanders had to be paid for with borrowings of $2.8 billion in the 2010/11 year alone. What happened to that money?

All we see now are excruciatingly high house prices in Auckland in particular.

We can’t afford to even think about buying a house here.

Those people of your generation that owned property when we started being born in 2002 became fabulously wealthy and paid no tax on those capital gains.

You and your generation then decided to keep the retirement age at 65 and the payment for a couple at 66 per cent of the average wage, even though the Retirement Commission, Treasury and a host of other experts told you that you could not afford to keep doing it, particularly now.

We understand you even said you would resign if you ever increased the retirement age or changed the 66 per cent payout.

We had a look through Hansard and found a quote from October 4, 2011, where you said you weren’t concerned about economic outlook beyond 2025. Why? We care. Why didn’t you?

Kind regards,

Bernard.

———————————————-
A chilling vision of the future. The way to avoid it seems to be to make sure that Key doesn’t get four terms, but only the one.

15 comments on “Hickey on how Key’s failing the kids”

  1. Zaphod Beeblebrox 1

    Those tax cuts amount to generational theft. Give tax cuts to high earners now and don’t pay into the super fund. Whats more important ? Higher house prices in 2011 or not having the ratings agencies slashing our credit rating because we are too hedonistic to save for the future?

    Hickey is right on to it.

  2. Lanthanide 2

    I can’t really take anything Hickey says seriously because he’s essentially spouting double-talk and I’ve never seen him actually acknowledge or address it.

    One of his favourite topics is young New Zealanders moving off to Australia after they’ve graduated here because there are no jobs and the jobs in Oz are better paid. Then, in the next breath, he is calling on the government to get rid of interest free student loans because it’s unaffordable middle-class welfare and driving up the deficit.

    Well which is it? You take away interest-free student loans and you’re giving even more incentive for these graduates to move to Australia, where they will *need* to get a job with a higher salary in order to pay back the loan in any realistic time frame.

    • Nick C 2.1

      I’ve never understood this as an arguement for interest free loans. Reduced government expenditure as a result of abolishing IFSL would mean lower taxes and lower interest rates on other borrowing such as mortgages. You would pay the interest on the loan whether you live in Aussie or NZ, but you would only get the benefit of lower taxes if you live in NZ. So there is just as much or more incentive to stay in NZ.

      I also just dont buy the idea that people are mainly motivated to seek higher incomes overseas because they have debts. From my experience the people who move overseas for work arent the ones in financial hardship due to loans. They are people who are already quite comfortable, but got job offers with vastly higher salaries which they couldnt really refuse.

  3. Phaedrus 3

    So correct. Hickey’s credibility is high, especially as a reformed monetarist. Great to see this in the NZ Herald as well. The smile and wave facade is cracking, the mask is slipping and the real Key is being revealed.

  4. gingercrush 4

    Hickey looks seriously sick.

  5. gingercrush 5

    Its the same thing he does every few months. Just a rant that gets slightly adjusted whenever someone announces something. Of course prior to 2008 he was calling for a low flat rate. Since he went the other way that part has been removed. But the gist of it remains the same.

    • Colonial Viper 5.1

      Not a ‘rant’ – a narrative of where we are going wrong and why as a nation.

      We ignore it at our peril.

      If it seems to you that Hickey is being a broken record, fair enough. Its because NZ’s underlying economic themes which need to be changed have not been changed.

      And it seems to me that the 3000 New Zealanders leaving for Australia every month (including his family members) agrees.

      • Zaphod Beeblebrox 5.1.1

        So do Fitch’s and Standard and Poors- unlike the NZ media they can see what is going on.

      • gingercrush 5.1.2

        So lets remove working for families then and get interest back on student loans and implement a land tax on everything and reduce government spending to a pittance of what it is now. For that is Hickey’s wishlist.

        • McFlock 5.1.2.1

          His solution might not be something I agree with (although I’m not sure your summary does it justice), but he certainly identifies the problem. A bit like Marx, in that respect.

    • bbfloyd 5.2

      not a very convincing effort to shoot the messenger really…. insulting and patronising pseudo analysis, while occasionally momentarily amusing, is still pointless…. there’s more than a hint of “rant” about your comment itself…. is there a personal issue you aren’t sharing with us?

  6. Nick C 6

    Absolutely raise the age to 67. Annoyed by Key being hamstrung by this stupid promise, and I suspect that once he retires there will be a consensus that we should. To be fair to him I think he was motivated to do it in 08 to a) Try get rid of Winston b) As a responce to Clarks hysterical cries that Key would cut and sell everything, its entirely reasonable for him to think she would have started talking about superannuation to scare seniors when people realised that he wasn’t going to sell every state asset the minute he got elected.

    The other thing we should do is means test. I used to find it odd that Labour opposed means testing: Surely it allows more money to be saved which could be spent helping their poorest constituents. Then I realised that Labour dont care about their poorest constituents as much as they care about power.

    • dazed & confused 6.1

      Means testing? How would that work?

      Perhaps the supposed “well-off” at a certain cut off point have to sell their house and pay their rent and live off the invested income perhaps. Those who have the family home in an ideal trust world would of course be exempt. A targeted Super would not work, as it would just be avoided through trusts.

      In theory I like the United Party’s policy framework that appears to give flexibility, letting those people who work and stay active for longer opt for a larger amount later and a lesser amount for those who wish to take it up earlier…I’d need to really study the figures, but it could help address certain demographics and professions where premature aging is a characteristic.

      • Nick C 6.1.1

        You would have a dual asset and income test, with a sliding scale as to how much benefit is recieved. Only those who were very wealthy would recieve nothing, most people who go into retirement with good savings built up would still be recieving money.

        I disagree that you could use trusts to avoid the laws. Many aspects of the have to deal with the fact that people keep a substantial number of their assets in trust and have developed to do so, bankrupcy laws being an example.

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