Rich oldies don’t need our welfare
Remember last year when NZ First leader Winston Peters threw a paddy about his state superannuation over-payment being leaked?
I still wonder if Peters was more upset about the image of him and his wealthy businesswoman partner Jan Trotman turning up at Work and Income in their finery, to sign up for their pension, than the actual leak itself.
Rich senior New Zealanders like Peters (73 this year) and his partner don’t need the state pension to live very nicely but that doesn’t stop most of them lining up with their hands out.
And why shouldn’t they?
I get that the state pension is seen as an entitlement and who can blame comfortable oldies for claiming the money if it is just waiting there for them? Some, no doubt, will give most of it away.
But if you don’t need the state pension to live well, I would argue you have a moral duty to leave the money in the public coffers for needier people.
We need to remember that state superannuation is a welfare benefit. It is mainly money provided by the working population for those that cannot provide for themselves.
So all power to Wellington millionaire and former leader of The Opportunities Party, Gareth Morgan, who turned 65 on Wednesday.
He wants Kiwis to help him decide what to do with his super by setting up a poll asking whether he should use his pension to buy a new motorcycle every year, give it to charity or let the government keep it.
Very commendable. Of course, losing his pension won’t make a bit of difference to the super-rich Morgan.
I’m not sure statistics will tell us how many rich oldies like Morgan claim the pension but it is not hard to estimate.
About 750,000 New Zealanders receive superannuation, costing the country about $12b a year.
We are told around 40 per cent of pensioners have no income other than their super and for another 20 per cent, the pension is 80 per cent of their income.
I suspect that at least about ten per cent of superannuitants really don’t need the money. If they declined their super, the country would save about $1.5b which would buy a lot of hip replacements, heart medication and pensioner housing for the less well off.
I mention housing because, compared to the past, fewer people entering retirement own a home and this trend will only increase. The amount spent on accommodation supplements for pensioners is on the rise.
More superannuitants will also enter retirement still paying off their mortgages.
So the $1.5b saving could stay in the old age sector. It could go directly to the old poor. In other words, rich oldies helping poor oldies of which there are going to be a lot more in the future.
Gareth Morgan forgot to mention another little bonus for superannuitants this year.
From July, the taxpayer will be gifting senior couples an extra $700 (singles will get $450) a year as a winter energy payment. The money will be paid automatically but pensioners will be able to opt out although how that will be done has yet to be announced.
I’m betting the travel industry will have a bumper winter thanks to this outrageous giveaway.
Lots of poor students and young working families paying big mortgages or rents will freeze but never mind about them.
When looking at whether pensioners are getting too much of a good thing, we need to mention the wretched Gold Card, which will be expanded under this coalition government, and we shouldn’t forget all the other perks and discounts available to seniors.
Then there’s that privileged group of pensioners who still work. Estimates put this group at between 25 to 40 per cent of pensioners. This is a group who can travel to work for free and get a significant guaranteed payment each week on top of their earnings.
Retaining older people in the workforce is obviously necessary given the various skill shortages but they should they really get a massive state bonus as well as their usual pay?
I’m not suggesting for a minute that we should not do the absolute best we can for our seniors (I am 60 this year by the way) but that doesn’t mean we should throw money at well-off people. It’s always a question of priorities and we have health funding and housing crises. Surely we should be prioritising spending much more rigorously.
The wider issue is the sustainability of superannuation. Treasury has warned the current system is unaffordable but no political party, especially not New Zealand First, is brave enough to confront the problem.
About 1.1m people will be on the pension by 2030 when the cost will climb to about $20b a year.
Means testing and raising the eligibility age for super are obvious solutions but seem impossible. Maybe the only way of getting our rich oldies to step off the gravy train is to shame them into it.
If you don't need the state pension to live well, ... you have a moral duty to leave the money in the public coffers.