I feel a bit sorry for Key and co. The coming term isn’t going to be nearly as much fun as the first one. Here, for example, is one issue that they’d desperately like to go away. But Treasury have dumped it right in their laps:
Treasury warning over cost of super
The Treasury has warned Finance Minister Bill English the Government must start addressing the pressures of future superannuation costs and it makes a case for lifting the retirement age – one of Labour’s policies going into the election.
The government wants to do no such thing of course. That’s a hard problem, and they don’t do hard stuff.
It [Treasury] also argues the case for less variation in taxing capital – again similar to Labour’s election policy of a capital gains tax.
Yes, Labour’s policies actually realistically addressed the elephants in the economic room, and set out a clear way forward. Too late to cry abut it now though, that ship has sailed and we’ve got the Nats. If they can’t drill it, mine it or sell it they haven’t got an answer.
In the hard-hitting advice on superannuation, the Treasury says leaving the retirement income settings in place would have to lead to higher taxes, which would harm growth, or large cuts in spending on other areas such as health and education.
It says that as the baby-boomers move into retirement, New Zealand’s 65-and-over population is projected to grow nearly four times more quickly than the total population over the next 15 years, contributing to a rapid rise in health, aged care and New Zealand Superannuation costs. … It says the current acceleration in the growth of the older population makes it “a matter of priority for New Zealand”.
The Nats will ignore the issue. It isn’t going to explode in the next three years, so as far as they’re concerned it’s not their problem.