The case for raising super age

Written By: - Date published: 8:22 am, July 9th, 2011 - 69 comments
Categories: child welfare, superannuation - Tags: ,

A very interesting report appeared in yesterday’s NZ Medical Journal, as reported by The Herald here:

Raise super age, doctors say

Doctors are calling for higher family welfare benefits and taking GST off healthy food – with the extra costs funded by raising the retirement pension age.

An editorial by three leading doctors in today’s NZ Medical Journal says the country has got its priorities wrong, paying a generous pension to everyone from age 65 while 22 per cent of children are living in poverty, mainly because their parents are on inadequate benefits.

The Medical Association has published a position statement on health equity that proposes taking GST off healthy food, banning cigarettes by 2020, “fair employment” and a “minimum income for healthy living” for everyone – a list taken largely from a British taskforce on health inequities chaired by researcher Sir Michael Marmot. …

Governments worldwide are responding to evidence that poorer people suffer more illness and die sooner than richer people.

The gap between rich and poor is wider in New Zealand than in all but seven of the 30 nations in the Organisation for Economic Co-operation and Development (OECD). …

… by far and away the largest expenditure on welfare benefits in New Zealand is that on superannuation,” they say. “Yet the age of entitlement to government superannuation, 65 years, is the same as that in 1899 when life expectancy was 25 years less. …

POVERTY BY AGE
Per cent living in households with under half of median income after housing costs (2009)
* Couple aged 65-plus: 5%
* Single aged 65-plus: 15%
* Two parents with children: 13%
* Sole parent with children: 50%
* All children: 22%

We are going to have to have this debate some time. Maybe it will be possible now that Labour has shown how to stare down supposed “electoral suicide”.

69 comments on “The case for raising super age ”

  1. I agree that this is a debate we need to have, it’s something that needs to be addressed and a plan put in place in with plenty of warning so people can plan around it.

    It’s a fundamental part of our future, so it deserves cross party co-operation.

    It’s far more important than being used as an election football.

    • Well go on then SS.  State a position.  Be brave.  None of this namby pamby “it is important that we have a real debate” stuff.  Put a line in the sand and justify it.

      • It’s not for me to make the decision, it should be debated and decided on collectively, I’m not a policy maker in the Labour party.

        I agree on something like a commonly suggested sort of plan – starting in maybe ten years the pension age should be eased out a few years over maybe ten years.

        That seems reasonable warning and phasing in, but it still leaves us with a super sizing super bill.

        Have you got an opinion? Or will you just leave it to the Labour back room?

        • Colonial Viper 1.1.1.1

          Have you got an opinion? Or will you just leave it to the Labour back room?

          That’s a brave thing to ask since it appears you refuse to give an opinion yourself even when asked.

          Here’s my position: 45 years in the workforce is enough for anyone. Especially for those doing hard physical back breaking labour. At 65 people should have the option of participating in more community and volunteer work, the unpaid and non profit sector.

          The docs are quite right in pointing out that poverty levels in this country are over the top and need to be alleviated and that one way of funding that is to cut super. Its not the only way however, and the implementation of things like an assets tax and guaranteed minimum wage could greatly improve poverty and wealth inequality in this society.

          • Draco T Bastard 1.1.1.1.1

            Especially for those doing hard physical back breaking labour.

            20 years for that sort of stuff. Much more than that and you’re really start to wear your body out. IMO, nobody over 30ish should be doing hard physical labour.

      • Jim Nald 1.1.2

        That’s a tall order for someone who is better at putting a line in the water.

  2. Policy Parrot 2

    How much money would be saved if the pension started at 66 rather than 65? If it was an overwhelming money saver, the move to 66 could even be softened with a hike in super once you got there.

    Pension should also be means-tested for high incomes (drawback say from full pension at $100k through to $150k to 0), its a poor look for Roger Douglas and Jim Anderton to receiving state pensions on top of their MPs superannuation and parliamentary salaries. If senior citizens are working, they really shouldn’t be entitled to the pension, however I understand that financial pressure (and finance company failures) force some to continue to work. But again, this is a minority, how many elderly construction workers or hospital cleaners do you see?

    Note: There are some elderly who work part-time to keep occupied in light industry/labour/customer service and to earn a bit of extra cash. This is not who should be targeted, but the senior business executives, politicians, and management positions who continue with their careers as before the were 65, and do not need state pensions to live.

    These are two relatively small compromises that could help open up funding to put into young families and their children. Its not about targeting senior citizens, its about rebalancing so they are not so overwhelmingly favoured.

    • Colonial Viper 2.1

      But again, this is a minority, how many elderly construction workers or hospital cleaners do you see?

      Or road workers, forestry workers, courier drivers, professional rugby players etc

      There are physical age related reasons for that.

    • Draco T Bastard 2.2

      A Universal Income actually addresses that. Everyone gets it, even the super rich, but it’s clawed back in the fairly high flat rate income taxes pretty quickly. It ensures that nobody is in poverty while also ensuring that going to work is worthwhile.

      Retirement then becomes a personal choice.

    • If we expropriated the capitalists who live off the surplus-value of the working class then there would be enough to pay a ‘healthy’ wage (courtesy of Medical Council bless them) and (ever heard of ‘prevention’ Medical Council, save yourself some work) no need to put up the retirement age. In fact it could be reduced and the pension phased in according to the individual as long as pension plus wage was taxed at marginal tax rate. This would apply equally to the expropriated property speculators, bankers and assorted wankers.

    • Reality Bytes 2.4

      I think a couple of things.

      You need to be very careful with penalizing those who are past retirement age and choose to continue to work, PARTICULARLY in activities that provide a net overall benefit, and are not merely taking away a job from someone younger that deserves their chance. It’s very hard to fairly manage this, it is a real quandary.

      And secondly. I read some article not so long ago about when the retirement age was first introduced, most people died about 5 or so years later. Since then the retirement age hasn’t changed, but now people live 20ish years past it. This is an important issue to consider. I’m not saying raising the age necessarily is the answer to it, but we do need to be realistic that this is another spanner in the works.

      • Vicky32 2.4.1

        Since then the retirement age hasn’t changed, but now people live 20ish years past it.

        Not all of them! My two parents and my brother didn’t (in fact two of the three of them didn’t make it anywhere near retirement age.) I hope I do, as it’s my only chance of ever getting off UB, (8 years to go), but those who do physical work are not the only ones who need to be taken into account).

        • Reality Bytes 2.4.1.1

          Sorry to hear that, I was meaning merely on average, since the average kiwi lifespan is what, well into the 80s these days?

          The thing is though, if we are getting better as a society and things are improving, we should be aiming to lower the retirement age, this would be an indication of our success imo. Surely the end goal of work should be improved outcomes for society and better quality of life.

          • Vicky32 2.4.1.1.1

            we should be aiming to lower the retirement age, this would be an indication of our success imo. Surely the end goal of work should be improved outcomes for society and better quality of life.

            Oh yes, agreed!

    • Vicky32 2.5

      But again, this is a minority, how many elderly construction workers or hospital cleaners do you see?

      I have in fact seen some elderly cleaners! (In offices though, not hospitals).

  3. mikesh 3

    National Super was means tested at one time (the so called “surcharge”). Superannuitants raised merry hell, though I believe only about 15% of them were affected. It was perhaps short sighted of them.

  4. RedLogix 4

    I don’t think you could ever draw a line in the sand here. The problem is that after 40 or more years of life and work, peoples circumstances are so varied, from healthy and wealthy, to impoverished and ill… that once size truly does not fit all.

    For instance, while it might seem fine and dandy for me to work until I’m 70 or more (after all I’m a programmer/engineer whose main work hazard is a shiny arse) I truly could not see myself doing hard building work at that age.

    Whatever policy you come up with, it needs to give people some power of choice.

  5. RobM 5

    Leave the age and means test it. Why am I means tested at 35 for Working for Families and the accommodation supplement, but not at 65 for Super?

    • Colonial Viper 5.1

      Yeah there’s a whole network of family trusts out there built up in anticipation of means/asset testing.

      • RobM 5.1.1

        Bit defeatist CV. The Working for Families rules have changed so attributable trustee income (whether of not it is taxable) is used to determine WFF eligibility and payments.

        Same goes for gifts over 5k. So I can give 10k to my 65 year old father to help him pay the mortgage but not my my 34 year old brother to help him pay the rent.

        Of course the NACTs abolishing gift duty doesn’t help matters but are you saying there is no possibility for reform of trust/tax law?

        • Lanthanide 5.1.1.1

          “The Working for Families rules have changed so attributable trustee income (whether of not it is taxable) is used to determine WFF eligibility and payments.”

          Yes, but they *only* changed WFF. They could have gone and changed any number of other benefits at the same time, including student allowance, but simply chose not to.

  6. I’m always very wary of these ‘trade-off’ arguments – the idea that we have to decide between impoverished children, healthy minimum wages, fair employment (all on the one hand) and superannuation at 65 (on the other).

    Trade-off situations – in policy – usually hide hidden assumptions and questions that have been begged.

    What we can or can’t ‘afford’ depends upon the cost of something, the ‘income’ and borrowing potential of the country, and willingness to pay. Of those elements only the last has seen a negative shift. I admit, that is, that the ideological shift in the population has been away from a ‘willingness to pay’. I do not admit that we don’t have the economic capacity to attain all of those goals that the doctors/researchers see as competing priorities.

    To be honest, I get a bit tired of middle-class experts – who often enjoy relatively benign forms of employment – dominating debate that will have its greatest negative effect on people in markedly worse employment circumstances. After having been in the workforce for up to fifty years superannuation is the least that society can offer its members – given what it imposes on people through the economic institution we call ’employment’.  

    Fifty years of arduous or repetitive work that drains the body, mind and emotions is enough for anyone to have to put up with. That, on average, we live longer now than we did in 1899 is irrelevant to that judgment. As ever, the middle classes are looking at what it will cost them – not at what it gains in terms of extra years without the grinding slow death that, for many, is their workplace experience.

    • Draco T Bastard 6.1

      What we can or can’t ‘afford’ depends upon the cost of something, the ‘income’ and borrowing potential of the country, and willingness to pay.

      No it doesn’t, well, not in reality anyway – it does in the delusional socio-economic system we use. In reality it depends upon what physical resources we have available and we enough of those to do whatever we want (as long as we cap population).

      • Puddleglum 6.1.1

        Yes. All consumption comes down to available ‘resources’ (a term I dislike). I was focused on distribution of the benefits of (any level of) resource use rather than total resource use.

        • Draco T Bastard 6.1.1.1

          Total resource use is more important as “money” doesn’t tell us anything which is how we’ve ended up with anthropogenic climate change and massive over-population. We need to determine what resources we have, determine what sort of living standard we want and then minimise consumption within those limits. The only possible way to be sustainable is by having a population cap and living within the environments limits.

    • just saying 6.2

      Those who have used their bodies up in physical toil, or through working with toxic materials are often worn-out by their mid-fifties. These people are rarely on high incomes with transferrable skills for “lighter” work. They, along with invalids beneficiaries, who have often struggled to survive below the poverty-line for years, certainly deserve the dignity and relative security of a full-pension at 55, in my opinion.

      Whether the age for those who enjoy good health, and the ability to continue earning their income, is raised or not, I think it should certainly be means-tested above a reasonable and comfortable threshold.

      My old man gets his super direct-credited to the TAB. He has a generous work pension, and is well-off. I don’t think taxpayers owe him a pension in addition to this.

  7. Afewknowthetruth 7

    Children don’t have the vote.

    Not that voting makes any difference. If it did make any difference the powers that be would ban it.

    We’re all on the Titanic together: the present GDP-based system is geared to converting nature into waste at an ever faster rate, so nobody stands much a chance beyond 2015 anyway, especially when we consider that the world is suffering from population overshoot of around 500%. And then there are the decline in oil extraction and climate chaos to consider.

    In fact there are plenty of unpalatable truths that are constantly swept under the carpet so that people can keep pretending present economic an social arrangements have a future.

  8. Rog Chapman 8

    If Kiwisaver was made compulsory then at age 65 people might choose to draw down this and reduce work hours, while awaiting the state pension, say three years later. It would encourage people to save, and give them an incentive with a pension a little later.

  9. prism 9

    It can be horrible going to the Soc Welf department when you need help. It is distressing dealing with the Department because of the loss of identity and command of your life at the whim of some sour, jaded or prejudiced worker, the abolition of case managers so that everything has to be explained each time, the wait to be seen if appointments aren’t the norm, the documentation to back up your case. Many people just put up with difficulties and bad conditions than apply for the assistance which is supposed to be available. Which suits the Department and the government and they preen themselves with being clever at limiting welfare payouts and numbers.

    Then if the age for superannuation (age benefit) is raised from 65 what will happen to those affected? The difference in attitude by the Soc Welf between those on unemployment benefit or others, and Superannuation is strikingly different. There is a pleasant, helpful attitude to you just because you are over 65 now. Under, you are just another bludger but the same person in the same circumstances as when you turn the magic age.

    Having Gold Cards giving free travel to Waiheke Island is one example of poor spending, a travesty of what is needed by the elderly, though they should receive necessary generous travel concessions. But the retired can have so much spare time when they are healthy and mobile between 65 and 75, there is no reason for them to not participate in assisting wider society or perhaps in childcare for their family. Part time paid or volunteer work with time to travel and see family would provide them and their support group, the earning population, with a benefit.
    If they did not want to participate then they need not receive superannuation though they would still be entitled to concessions for necessary travel or doctor’s visits. Simple.

    It is my belief that everyone receiving any benefit should be putting something back into society. But it shouldn’t have to be paid work, they could train for suitable volunteer work, go into labouring groups, contracting for work. People with mobility problems who have the right attitude, might give individual reading help after training, child care, care of their own age group. Councils could have green groups helping contain weeds, litter etc.

    If beneficiaries are in low paid work or have limited hours, then there should be top-ups available to ensure they can manage and meet the necessary costs. This should be done without having to go into the Department and be grilled. Each person should receive a regular accounting of the financial help being received, say every quarter. At present there is very little information as to the payment of a benefit or grant or how it is calculated.

    • Lanthanide 9.1

      You know, it just struck me about the “we don’t take appointments any more because too many people wouldn’t turn up”.

      Have an option where you pay a $10-20 deposit for a meeting time. If you fail to turn up, you lose your money. This would be entirely optional – if you don’t want to (or can’t) afford the deposit, then you’re free to use the “turn up and wait your turn” system.

      That way there’d be more incentive to meet your appointments and people who were more motivated wouldn’t have to be dicked around by the system.

      • weka 9.1.1

        Except that WINZ are generally incompetent at administering even basic benerfits, so adding another thing they have to keep track of is insane.
         
        Besides, there’s nothing wrong with the appointments system they had. If (and I really mean if) some offices had a problem with broken appointments they might want to ask themselves why. And if there was a problem they could still run an appointments system *and* a queueing system – if someone doesn’t turn up then the person waiting gets seen. 
         
        I’ve not heard that the reason they changed is because too many people didn’t turn up. Where did you hear that Lanthanide? And would you want penalties for any other citizen who didn’t turn up to an appointment with a government department?
         
        The reason we don’t have ‘case management’ (such as it was, it was never really case management) is because under right wing govts it’s deemed better to control beneficiaries and easier to not pay them money if no-one n the system knows the person and their situation. It’s actually against WINZ policy – most benefict entitlements are supposed to be assessed in the context of the beneficiary’s overall situation. You can’t do that if you don’t know the person, and you can’t find out in a half hour appointment.

      • Vicky32 9.1.2

        You know, it just struck me about the “we don’t take appointments any more because too many people wouldn’t turn up”.

        Oh, is that the rationalisation? You truly are a middle-class kiddie, Lanth. That same rationalisation was being used at National Womens ante-natal clinic in 1986, although against pregnant women of most socio-economic groups (I presume the truly upper class ladies went private..) But it’s complete shite to say that either pregnant women or beneficiaries are too irresponsible to be counted on to turn up for appointments. The men hadn’t caught on to the fact that in the 1980s, most preggies were also working in actual jobs. From your suggested ‘solution’ it would seem that the men don’t seem to have caught on that beneficiaries are no longer brain-dead substance-abusing teenagers who sleep til noon every day, if they ever were! Instead, we’re people who really can’t afford to pay $10.00-20.00 to make an appointment. and when we say “I can’t afford it” we’re not just saying that to piss you off!

  10. Jenny 10

    .
    Kia ora Anthony,

    A similar post by Marty G earlier this year championed the same issue.

    But do you really think that the Labour Party intend to deliver us up to the tender mercies of the National and ACT Parties at the next election, which adopting this policy would mean?

    Raising the retirement age, if ever adopted by the Labour opposition, would be rightly be seen by vast majority of young and old New Zealanders as a threatened attack on them.

    Particularly as the Nacts have disavowed themselves of such an extremist right wing position.

    With youth unemployment at dangerously high levels. Plans to force retirees to stay in the workforce longer will be seen as a direct attack on young New Zealander job seekers.

    As well as being an attack on young New Zealander’s job prospects –

    Older people vote at much higher levels than any other section of the population. The accepted wisdom of decades is that to alienate this section of the voting public is willful electoral folly.

    Why would the Labour Party deliberately court almost universal voter disdain?

    Anthony, are Labour supporters like yourself trying to open up a gap in the electorate for New Zealand First to make a comeback?

    Do you think NZF could be returned to parliament on this issue?

    If they did, this would certainly be an upset for the predicted National Party majority.

    • r0b 10.1

      Hi Jenny.  I think a change  needs to be made gradually, and signalled well (a decade or more) in advance.  I hope it wouldn’t be seen to be “attacking” anyone.

      And I agree that whichever party moves first on this is likely to get hammered.  It’s a very tough sell.  That’s why I’d like to see cross party consensus on this (and on all matters to do with super).  The question of super is too big, and too difficult, to be a political football.

  11. Gareth 11

    Surely there are a finite number of jobs available in our country, if we make people at one end of the work force work longer it will mean that there will be less opportunity for those starting out.
    To my mind I would prefer to pay super than unemployment benefit….

    • Lanthanide 11.1

      “Surely there are a finite number of jobs available in our country”

      No.

      http://en.wikipedia.org/wiki/Lump_of_labour_fallacy

      • Jenny 11.1.1


        In fact Lanthanide, there are less jobs available at the moment, than there are people who want them.

        In light of this fact I would like to ask you, or even Anthony at what level of unemployment do you think it would be acceptable to introduce your plan to raise the retirement age?

        5 percent?

        2.5 percent?

        0.5 percent?

        less than 0.5 percent?

  12. KJT 12

    I can only repeat my earlier comments on this issue.

    http://thestandard.org.nz/support-for-raising-retirement-age/#comment-335490

    “This is a mantra. “We cannot afford superannuation” which has been repeated so long and so often that even those who should know better repeat it”.

    It is only a problem because our society, especially the wealthiest, are becoming so mean spirited and greedy.

    I would prefer to see a universal GMI (On the same universal basis as our current super) for everyone at any age.

    “In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally”.

    In fact our super cost is low compared with many OECD countries.

    Do you want to return to having the elderly living in poverty.

    It is not either/or. That mantra comes from those who will do anything to avoid paying their fair share of the costs of living in a community.

    Lastly. Extending the age of entitlement impacts unfairly on manual workers, Maori and Males. 🙁

    • Jim Nald 12.1

      Don Brash who has a ‘manual job’ at his telephone and desk, is not Maori, and is male would love to extend the age of his entitlement. He knows a lot about work from the sweat of his brow (in a climate-controlled room), screams hysterically that those maarees have have too many rights … and he doesn’t have periods.

    • Vicky32 12.2

      Extending the age of entitlement impacts unfairly on manual workers, Maori and Males

      Oh I am so off-piste with that statement! Do you seriously not believe that there are any women, white, Indian, Chinese, Arab or African  people and/or non-manual workers who would have or do have serious problems working until they’re over 65? Give me a break! 🙁 🙁 🙁

  13. This call for the raising of the retirement age doesn’t consider groups of people who have shorter/lower longevity than others. What about them? It doesn’t seem fair that they should wait longer. Sure let’s have the debate – a long and thoughtful debate – not tainted by the baubles of power up for grabs via the election.

  14. lefty 14

    When have we ever had a debate where the voices of the poor and the powerless are heard?

    These are the people that will get screwed if the retirement age gets raised.

    Simon Collins writes about how the poor die young in this mornings NZ Herald (sorry I can’t find a link), and he appears a lot more grounded than a bunch of Remuera doctors.

    A universal basic income should be considered, and may provide an improvement in how we deal with retirement, but we should be looking at it because it would be more efficient and provide more options – not because it would be cheaper.

    Despite the ranting of the usual right wing suspects there is no reason to believe we cannot afford super into the future if we run our economy better. A good start would be to stop the concentration of wealth in the hands of a few (probably the same few who are screaming for the pension age to be raised).

    It is far more important to be getting young people into work than it is to be keeping old people struggling away long past their use by date.

    Nor should we be fooled that all the old codgers still working are doing a great job. Some people are able to function very well at an advanced age but others do not yet stubbornly refuse to retire or find work they are better able to cope with.

    I am a baby boomer and am embarrased at how a section of my contemporaries have taken all the priviliges previous generations struggled for, hogged advantages for ourselves, then pulled the ladder away for the next generation.

    Make no mistake about it – calls to raise the pension age are just another example of this.

    • deservingpoor 14.1

      “I am a baby boomer and am embarrased at how a section of my contemporaries have taken all the priviliges previous generations struggled for, hogged advantages for ourselves, then pulled the ladder away for the next generation”.

      The pension is pretty much the last rung of that ladder that is left and $20 says that sooner or later the pension age will either rise significantly (70+ perhaps) or new pensions will be abolished. That won’t happen until all the boomers are tucked up safely on their super, leaving my generation to get screwed. Again.

  15. weka 15

    I’m surprised to see this argument being made by the left. There are fairly obvious inequities by class and ethnicity. There is also the community and whanau undermining effect – we need older people to help raise kids and keep our communities running well. They can’t do that if they have to keep working in a paid job as well.
     
    I applaud the NZMJ for being staunch on child poverty, but they’ve obviously not thought through taking from the old to give to the young.

  16. Adrian 16

    A few years ago a comprehensive study ( sorry don’t know where to find it ) found that in general, Maori drew less benefit money on a whole of life basis than any other group simply because of lower life expectancy. Extending the 65 figure before we are able to get Maori life expectancy to an equal level would be unfair and discriminatory. What I would like to see is research on whether fitter healtheir working over 65s in the future really draw down that much from the benefit system given the amount of tax they would be paying. Even Just Sayings old man and his direct credit to the TAB is immediately returning 30% to the gummint.

  17. Daz 17

    When medical professional start trying to dictate national financial policy, it’s strange that their suggestions never include paying health professionals less.

    Now doing that would REALLY bring down the cost of health care, and free up a lot of the earnings of the poor… .

    • Colonial Viper 17.1

      Our doctors and nurses should be paid very well.

      Its the cost of new prescription medsa and medical tech which is well over the top. Pharmac needs to be strengthened, not traded away.

    • Draco T Bastard 17.2

      When business people start trying to dictate national financial policy, it’s strange that their suggestions never include them paying more tax to cover the costs of their suggestions.

      Oh, wait…

      The business people have been dictating our national financial policy for the last 30 years. It always included them paying less tax with the resultant shortfall being met by the poor and by government borrowing.

  18. red blooded 18

    Anthony’s right that this is an important public policy discussion to be having; that doesn’t mean that he’s got all the answers (and to be fair to him, I don’t think that he ever made that claim). I seem to remember a Retirement Savings Commission set by the last Labour government (the genesis of Kiwsaver) and I’m pretty sure these issues were canvassed then. At the time there was a lot of posturing by self-interested groups such as Grey Power, but there was also some reasonable debate about the issues of class, race and gender that mix together to see life expectancies and the experience of old age differ so markedly between the different groups of people who would be affected by any change. Having said that, the real unfairness isn’t that working class folk, Maori or men get to spend less time on superannuation, it’s that they live shorter lives, and trying to address the reasons for this requires a re-evaluation of how we spend our social capital and how we can give all people better access to lifestyles and healthcare that could help carry them experiences old age as healthy and independent individuals for as long as possible.

    Personally, I favour the kind of guaranteed income system that lefty is promoting, so long as there’s enough flexibility to recognise changing circumstances (kids, income from part time work etc) and a level of case management for the long term unemployed. We do no one any favours by locking them (and their families) into long term dependency. It’s easy to lose a sense of motivation and connection with the rest of society.

    Having said that it’s an important policy debate, I’m not holding my breath in anticipation of seeing it canvassed this election. Frankly, anything that gave Winston Peters an edge would be too high a cost, especially at this point in time. If we want to retain MMP, the last thing we need is Peters posturing and primping on our screens. He’s a boil on the NZ body politic. (And needs to be lanced.)

    • r0b 18.1

      Hi red blooded.  All the answers?  No – certainly not me!  But when a statement like this comes out from three senior medical professionals, I think we certainly need to look at the questions.

  19. Jenny 19

    Kia ora Anthony

    Carl Gibson co-founder of US uncut, asks us to question the need for these sorts of cuts. If this demand was being made by violent terrorist thugs would we be debating how to give it to them?

    As the hostage negotiators know, capitulating to bullies just encourages them.

    And before you know it, they will be back demanding cuts in other sectors. (as they are)

    What if there was a group of terrorists holding your family hostage with a gun pointed at themselves, demanding the account number to your pension fund?…….

    ………Through modest taxation of speculative Wall Street trading, we could bring in another $150 billion per year. With higher income tax brackets for households earning over $1 million annually, as Rep. Jan Schakowsky has proposed, we would gain another $100 billion. And progressively taxing estates worth $5 million or more would mean an extra $45 billion in tax revenue.

    A truly principled leader would refuse to negotiate with terrorists, and allow them to turn the gun on themselves. Our President needs to stand firmly behind these common-sense proposals, and remove from the table any cuts to the programs we’ve spent our lives funding from our own paychecks. No exceptions.

    Carl Gibson

    Tax the rich. Problem Solved

    • KJT 19.1

      Greek young people are opposing cuts to pensions. They know it is just a wedge driven by those who want to cut everything except their own entitlements.

    • r0b 19.2

      Hi Jenny.  I find it an odd analogy – “If this demand was being made by violent terrorist thugs”.  It isn’t a demand made by people, it’s a simple function of population demographics.  Even if we tax the rich to smithereens, there’s still going to be a lot more super-annuitants, and a lot fewer working age people per super-annuitant, in NZ’s future.  It’s a real problem.

      I don’t think you could call me a right winger of any description, and I certainly don’t want to see the elderly suffer (recalling that my own retirement is not so far away as it used to be!).  But I certainly think that it’s valid to ask how we face our future population structure.

      • Jenny 19.2.1

        “It isn’t a demand made by people……..”

        You’re right Anthony, I should’ve written:

        If this demand was being made by violent terrorist thugs,
        [instead of financiers, banksters, unimaginative neo-liberal bean counters and narrow minded policy wonks and sectarian flunkies],
        would we be debating how to give it to them?

        It is “…….a simple function of population demographics”

        Yes it is true that the population is greyer and comparatively the workforce is smaller.

        But what this one eyed view willfully ignores, is actually how productive the modern workforce is.

        New Zealand has never been richer or more productive.

        In the Factories – ‘Automation’ and ‘Just In Time’ methods; In the offices, banks and planning departments – ‘Computerisation’; In construction, Hydraulic Heavy Machinery and ‘Electric and electronic Power Tools; In freight and cargo – ‘Containerisation’, and Modern communications and Information Technology has revolutionised the work place. What used to be done by ten or twenty workers is now done by one. Far more wealth is produced per head. In theory this should be able to support a much bigger infrastructure.

        In the 1960s hundreds were employed on the Auckland waterfront, now less than 30 stevedores move much more freight over the wharves in a fraction of the time.

        This revolution in productivity began in the 1960s alongside the developments in medical science, birth control and increased longevity which has altered the demographics of the population that Anthony gave us as the reason for raising the pension age.

        In fact on the basis of this huge increase in productivity you could easily make a very good case for lowering the retirement age.

        In the 1940s, long before this revolution in productivity, we were easily able to support a huge war effort a free health service and a comprehensive universal pension, alongside war invalids and war widow pensions. Alongside a hugely unproductive war industry.

        In I945 the productivity was many factors less than it is today while most of the productive workforce were overseas.

        As well as all the this there was the huge cost of the war itself.

        Yet despite this we could afford a fully funded health care and universal pensions.

        Yet working people paid no income tax.

        So how was it done?

        Well for the one thing at the height of the international crisis in the 40s the top tax rates in this country went up to 90%.

        It could be easily argued that the current global climate and economic crises are just as dangerous and severe, requiring the same staunch policy responses.

        As in the ’30s and ’40s we must decide whether to support a minority rentier class of billionaires or cut back in spending on social Goods, like pensions or health or the environment.

        Yet since 1945 there has been a massive dialing back in the amount of tax the wealthy have been required to pay. This has been partly (but not completely) offset by putting more and more of the tax burden onto working people.

        In 1958 income tax was levied on workers wages for the first time.

        In 1986 a regressive flat tax of GST which impacts on those on lower incomes, was tied with big tax cuts for the wealthy.

        This trend has increased, till the present situation where there is no longer the tax income necessary to support the welfare state, or to deal with the crises of global warming.

        The irony of all this, is that most of this dismantling and restructuring of the tax system was done by the organisation that originally championed the welfare state and took the measures necessary to prosecute the war on fascism. Is it a coincidence that this surrender to what came to be called neo-liberalism, paralleled the Labour Party’s drop in popularity with working people?

        Instead of competing with the Nats for cuts to the Welfare State, maybe Labour should be looking at cutting GST and income tax for working people replaced with the levies on the wealthy at a level that were the norm in past decades.

        • r0b 19.2.1.1

          Yes it is true that the population is greyer and comparatively the workforce is smaller.

          You’re very well informed Jenny, I’m sure you know that it’s going to get much worse:

          A total dependency on future taxpayers is unrealistic because the ratio of taxpayers, those between 25 and 64, to retirees is dropping dramatically. In other words there will be fewer and fewer workers per retiree to pay these huge bills.

          The last column in the accompanying table shows there were 5.3 taxpayers for every retiree in 1950 and 4.3 to one in 2005. This ratio is predicted to drop to 2.4 workers for every retiree in 2030 and 2.1 to one in 2040.

          1.8 to 1 in 2050. The costs of super are going double over the next 50 years, from the current 4 percent of GDP to around 9 percent. This is a huge demographic change. I really don’t think that we should be taxing the not yet born to fund our retirement, we should (those of us who can) be taking care of ourselves.

          New Zealand has never been richer or more productive.

          Never been more productive, and the rich have never been richer. But (despite some improvement under Labour) the poor haven’t done so well since the 90’s. And I don’t think we can count on economic growth to save us. We’re going to get stuffed by both peak oil and climate change in that timeframe. Things are likely to get worse for all of us.

          So yeah, I’m happy to see taxes for top earners raised, and CGT etc, to pay for social programmes. That’s why I’m with Labour. Bring it on. I just don’t think that that approach can cope with the coming challenges when it comes to superannuation.

          Cheers and goodnight…

          • just saying 19.2.1.1.1

            Never been more productive, and the rich have never been richer. But (despite some improvement under Labour) the poor haven’t done so well since the 90′s.

            How much more “I’m alright Jack” could you be Rob. I find this understatement downright offensive.

            “And I don’t think we can count on economic growth to save us. We’re going to get stuffed by both peak oil and climate change in that timeframe. Things are likely to get worse for all of us.”

            No, not all of us Rob, not economically anyway, and this is what you have failed to address from Jenny’s argument. Instead of representing our interests, neoliberal governments, including the one you support, have been progressively weakening the rights of ordinary citizens, concentrating power and wealth in the hands of the elites,and legislating for a police state to protect the interests of the plutocrats against what will be an increasingly angry majority.

            It’s not a lack of resources that is the problem, it’s a lack of morality.

          • Draco T Bastard 19.2.1.1.2

            I just don’t think that that approach can cope with the coming challenges when it comes to superannuation.

            Our economy can though – as long as we realise that the dream run we’ve been on for the last few decades is at an end and we start planning how to survive the coming crunch. We have enough resources, even without oil, to maintain a good living standard for everyone. We just have to drop the delusional monetary hypothesis that our economy is based upon and start to think in terms of the resources we have and they how should be distributed.

        • just saying 19.2.1.2

          Go Jenny!

  20. vto 20

    I think the debate should be equally about means / asset testing to get super, as it is raising the age.

    The fact that the super-rich get super paid to them by hardworking people who earn far less than them galls.

    edit: the argument that they have paid taxes all their lives so they should get some return carries no weight. These generations have voted in governments like Muldoon to can super schemes and piss the money against the wall.

  21. Bill 21

    Seems too many have forgotten the source of the job culture.

    It was developed as an answer to slavery…or more precisely its abolition… with one touted ‘advantage’ being that you could ‘buy’ your freedom after giving up your best years to enrich others.

    But if slavery is morally repugnant, then the job culture which, let’s face it, merely perpetuates slavery at one step removed (ie, the master rather than being visible and obvious, is remote and their relationship with their slaves is moderated through the abstraction of market relations) is also morally repugnant.

    There are no grounds on which to base arguments for extending the period of enslavement for workers.

      • Colonial Viper 21.1.1

        Blacks are a huge proportion of the US prison population.

        With these changes they now get housed, fed and clothed, and in exchange they get to do laborious work with no pay, with no freedom with regards to their own movements, accommodation or decision making.

        Well done USA you’ve just brought back slavery.

    • Colonial Viper 21.2

      In that case, bring the age for super down to 64 and make it possible to earn a living income on a 4 day working week 🙂

      • Bill 21.2.1

        Rather than have ‘retirement’ at the end of life, why not at the beginning?

        Why not base a number of years of non-job eligibility based on the average life expectancy of a population and have those years allocated at the beginning of adulthood?

        Among other things, this would mean more fairness in the number of non-job years enjoyed by people. And would mean that young people would have time to explore life and have a chance of becoming more well rounded individuals, rather than being railroaded into ‘earning a crust’ and becoming limited by the parameters of job cultures.

        And it would mean that anyone who fancied them-self as ‘a master’ would have a far greater challenge in convincing prospective slaves to not develop autonomous and democratic means of production and distribution instead.

        So it won’t happen. But I’d love to hear any rational argument from those that would rather defend the status quo 🙂

  22. marsman 22

    Why did these doctors pick on an increase in the age of superannuation entitlement why not on the introduction of a financial transactions tax?

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  • NZDF’s Red Sea deployment extended
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  • Huge opportunity for educators and students as charter school applications open
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  • Providers of military assistance to Russia targeted in new sanctions
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  • Prime Minister’s scholarships awarded
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