Source: Radio New Zealand
Opportunity Party leader Qiulae Wong said her party would replace NZ Super – along with all other forms of government assistance – with a new citizens’ income. RNZ / Supplied
The Opportunity Party says New Zealanders would be better served by dropping NZ Super and replacing it with an entirely new support system.
Questions about the sustainability of NZ Super have been raised again, this time at the Waikato University economics forum, by Milford Asset Management chief executive Blair Turnbull.
It follows earlier [https://www.rnz.co.nz/news/business/574085/gst-at-32-percent-pension-age-of-72-among-treasury-solutions-to-financial-crunch
warnings from Treasury] about the increasing cost of an ageing population.
TOP leader Qiulae Wong spoke to Midday Report and said it was a huge structural problem for New Zealand that had been known about for a long time.
She said it was frustrating that successive governments had “continued to kick it down the road”.
Wong said TOP would replace NZ Super – along with all other forms of government assistance – with a new citizens’ income.
This is similar to a universal basic income but is means tested so that people who earn more than $350,000 a year cannot access it.
She said this weekly payment would be a bit lower than NZ Super but in the interim a top-up would be paid for people who qualify for NZ Super.
Then, over time, means testing would be applied so high-income earners were not receiving extra.
Wong said it would be fairer that raising the pension age or taxes to pay.
The policy would be paid for by a land value tax, and savings on the benefits that would be replaced.
Financial coach Liz Koh said there were some other factors being missed in the discussion at the Waikato forum.
“At present, average KiwiSaver balances are relatively low at retirement because people haven’t been saving into it for their entire working life.
“This will change over time. In 20 years time, most people retiring will have been in KiwiSaver for about 40 years and the average balance at retirement will be significantly more than it is now. Between now and then the average balance will gradually increase.”
She said people could be given more encouragement to save more, although that could be difficult for people on low incomes.
“Secondly, most people want to work past the age of 65 through a desire to keep active and have a purposeful life. I believe attitudes towards retirement have changed and most people now understand that, due to increased life expectancy, retirement can last a very long time and there are some real downsides to retiring early – not only financial downsides but psychological ones.
“It may be that the age of eligibility for NZ Superannuation increases over time. If it does, I believe people should have options to still retire at 65 if they choose but perhaps on lower payment than those who choose to retire later.
“This is important, as increasing the age has negative effects for some people, for example, people of ethnicities whose life expectancy is lower on average or people whose job requires physical strength and agility.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
