Super age becomes an issue

entitlement from 65 up to 67 in line with Treasury thinking. This may seem politically brave, but English’s timeline is much more timid and has the science-fiction air of other recent Government promises. Treasury’s view, in its report Affording Our Future in 2013, is that the age of entitlement should be raised to 67 by six months each year, starting in 2019/20. English would rather start in 2037. No-one born before 1972 will be affected.

During the two days when English dithered, speculation rushed into the vacuum and NZ First leader Winston Peters was given a golden opportunity to reassert his position as champion of the elderly.

English can now test if his predecessor, John Key, was right to consider the superannuation age politically untouchable.

Our ageing population is at the heart of the question. The assumption is that the current scheme is not affordable when we are living longer. In the 2013 census, 14.3 per cent of the population was over 65. By 2063, that will have jumped to more than a quarter of us (26.7 per cent).

A Treasury fiscal update in 2016 said that the ageing population would push the cost of superannuation from 4.8 per cent of Gross Domestic Product to 7.9 per cent by 2060, if the age stayed at 65.

A more alarming way to frame it is to say that superannuation costs $11 billion now, but was forecast to cost $100b by 2060.

All politicians will be aware that the old vote more than the young. Voters aged 65 to 69 were the cohort most likely to vote in the 2014 election, with 88 per cent of them doing so.

Those aged 25 to 29 were the least likely to participate, with only 62 per cent voting. This is one reason the conventional wisdom said that revising superannuation is a vote loser.

English may have dodged that by pushing the date so far into the future and placing the burden on those born after 1972.

But he has clearly marked out points of difference with Labour, NZ First and the Maori Party, who want to keep the status quo, and Act, which wants to make a change much sooner.

New Zealanders are now able to have the full, informed discussion about the costs of an ageing population that Key avoided for so long.