English’s bombshell is a super-sized gamble
Bill English’s pension bombshell is a huge political gamble that could wake up grumpy voters and leave no one happy.
English has tried to sweeten the pill by pushing out the date when the new retirement age of 67 kicks in to 2040.
But rather than make it easier to swallow, it could stoke the fires of the war already raging between younger voters and the baby boomers over student loans and skyrocketing house prices.
The take out for younger voters from English’s announcement is that National doesn’t want to alienate the powerful boomer bloc so is targeting socalled generation rent instead.
That’s the group that already feel that they have been unfairly saddled with student debt and priced out of the housing market by baby boomers relying on property to fund their retirement.
Now they’re being told they must support the boomers in retirement while knowing they will have to work longer themselves. But English is not just courting a backlash from younger voters.
Andrew Little can tell him what happens when you rile the grey vote by tinkering with the pension.
When Labour proposed raising the retirement age at the last election it stirred up the most fear among older voters who were already at or close to retirement age and weren’t even affected by the change.
That’s the legacy of a generation of distrust between politicians and older voters who remember a string of broken promises on pensions.
That was the reason for John Key’s promise to resign as prime minister rather than fiddle with pensions; he felt that National was so mistrusted among older voters it was almost unelectable.
So why is English grabbing the pension tiger by the tail?
It will probably get a lukewarm welcome from economists and the likes of Treasury, who have long argued that pensions are unsustainable.
But the changes are so far out in the future that English will more likely be criticised for not moving soon enough.
English may also be banking on voters seeing this as a fiscally responsible and necessary - if unpopular - move. But as Labour found at the last election, getting kudos for making the tough decisions on pensions doesn’t translate into votes.
Prime Minister Bill English announced the changes to national superannuation at Parliament on Monday.