Pension changes risk a backlash

Old people vote, despite the frailties that come with age.

At the 2014 election, voter turnout exceeded the 80 per cent threshold only among those aged 50 or older, and turnout was highest (at nearly 86 per cent) among those aged between 60 and 64 years of age. That’s why politicians hate to act against the self-interest of the aged.

With age comes a heightened sense of anxiety. Anything that smacks of messing with pensioner entitlements risks a backlash.

The young, by contrast, seem to be fair game. Only 62 per cent of the 20-24 age group voted at the last election.

Last week, such realities explained why the government was at pains to provide a reassuringly long lead time for its planned change to the age of eligibility for national superannuation, which it aims to raise from 65 to 67.

However, the process won’t start to be phased in until 2037 and won’t become fully operational until 2041. Across the Tasman, the politicians have been far more bold.

Australia announced a similar intention in 2009, and its changes to pension eligibility will take full effect as early as 2023.

No-one disputes the need to have a phase-in period. Yet the over-riding reason for proceeding slowly is that governments want to give themselves plenty of time to bed in public acceptance of the inevitability of change, and to ride out the initial wave of voter disapproval.

Again, Australia offers some useful insights. A poll last year showed that only one in four Australians support raising the age of pension entitlement to 67.

This level of opposition may explain why the Turnbull government has quietly shelved a related plan to hike the pension age to 70 by 2035.

In this country, it was hard to escape the conclusion that the government’s policy rollout last week was driven by National’s perceived need to guard its flank in an election year.

If National becomes reliant on NZF for forming a coalition government, any date earlier than 2037 would have been bound to incur the deadly ire of Winston Peters. Before then, it may well need NZF to pass the enabling legislation.

To further sweeten any possible post-election deal with NZF, the government also announced its intention to crack down on immigrants – who will now be required to double their period of residence in this country before being able to draw a pension.

If wooing Peters was a major consideration in the framing of the government’s super policy, the man himself seemed unimpressed, for now at least.