NZ Super no deal breaker, say experts
The chasm between the superannuation policies of National and NZ First is wide, but pensions experts believe it can be bridged.
National leader Bill English pledged in March that, should he retain the position of prime minister, he would lift the age at which people become eligible for NZ Super to 67.
NZ First is the self-styled defender of the government pension, and its leader, Winston Peters, is committed to universal superannuation at age 65.
But one superannuation commentator believed National would be willing to put the rise to age 67 on hold in return for being able to retain power.
Michael Littlewood could also see the two parties doing a deal to make it harder for immigrants to qualify for NZ Super.
‘‘It is significant that the changes that National announced [in March] were not legislated. I have had the distinct impression that there was one eye on the election, and that National would be dealing with NZ First,’’ said Littlewood, who recently retired from the University of Auckland’s Retirement Policy and Research Centre.
Rather than die in a ditch over the policy of raising the age of eligibility of NZ Super gradually to 67 by 2040, which would effect nobody born before 1974, there may have been a tactical element to announcing the policy well before the general election.
‘‘It was something they could concede,’’ Littlewood said.
He saw common ground between the two parties on making immigrants wait longer to qualify for full NZ Super. National proposed to double the residency requirements so that applicants must have lived in New Zealand for 20 years, with five of those after the age of 50, to get it.
NZ First had already proposed to raise the minimum residency requirement for full NZ Super from 10 to 25 years after age 20.
There was a key difference, however. National’s plan excluded current residents or citizens, many of whom live in Australia, while NZ First believes the entitlement should be earned through residency in New Zealand.
‘‘NZ Super will not be affordable if mass immigration continues and present migrant access to Super does not change,’’ Peters told Grey Power members in Dargaville in July.
Another pensions campaigner, Susan St John, believed the parties could strike a deal, and hoped it would end some deep unfairnesses in the system.
She said lengthening the residency requirements could pave the way to the repeal of section 70 of the Social Security Act, under which people with overseas pensions have their NZ Super payments reduced.
With an ageing population and more than half a million Kiwis in Australia, some like St John believed it was time for a 25-year residency rule to manage the scheme’s future cost.
‘‘It would be really positive to push up the residency [requirement] to 25 years, and to get rid of section 70,’’ St John said.
Peters would not disclose what he was taking to the negotiating table with National. ‘‘If I’m going to the negotiating table to talk about things why would I tell you?’’ he told reporters yesterday.