Super age must rise, says Bolger
The man who oversaw a dramatic overhaul of New Zealand’s contentious superannuation policy says the country must recognise a need to raise the age of entitlement.
But a leading economist says a lack of political courage is crippling the chances of adequately handling the challenges of an ageing population.
In a rare foray into discussing politics, former National prime minister Jim Bolger said Kiwis should ‘‘welcome’’ broader reasons for lifting the age of entitlement. ‘‘We have to lift the age ... All it does is recognise we all live longer and healthier lives,’’ he said this week.
Debate intensified this month over raising the age from 65, but superannuation was also a major issue for Bolger and for his National predecessor, Robert Muldoon. Bolger spoke after the emergence of American diplomatic cables on Wikileaks discussing his former boss, Muldoon. As prime minister, Muldoon dropped the age for universal pensions without means testing from 65 to 60. ‘‘In my view that was never affordable,’’ Bolger said.
Bolger said the economy was in a parlous state when he became prime minister in 1990.
‘‘When we got in, I was called to Wellington by officials on the day after the election to tell me about the [imminent] bankruptcy of the Bank of New Zealand if we didn’t take over and rescue it.’’
He said he lifted the age again ‘‘because, frankly, we didn’t have money’’ to stay at 60.
Age eligibility jumped to 61 by 1992, and 65 by 2001 – a far quicker rise than Prime Minister Bill English last week proposed.
Bolger urged the different parties to work together on the issue now, although that would be difficult. ’’We seem incapable as a society on agreeing what is fair, reasonable and affordable.’’
English proposed raising the age six months each year from 2037 to 2040.
Bolger said the economy was now in good shape, so English didn’t face the same pressures that existed in 1990. ‘‘He doesn’t have to rescue any banks ... This is a very slow adjustment.’’
Economist Shamubeel Eaqub said the Bolger government made ‘‘difficult and brave decisions, but they had to’’.
‘‘Muldoon had dropped the entitlement age from 65 to 60. It was a pretty easy reversal back to 65 because people knew that Muldoon made all these crazy promises.’’
Eaqub called English’s policy ‘‘cynical’’ but chastised other parties too, saying none were brave enough to stand up to older voters first.
English’s policy would not affect Baby Boomers, or the oldest Generation X members – people born before July 1, 1972.
‘‘If we really told people that you are going to be robbing your children and grandchildren ... we would [have] a very different type of conversation.’’
Eaqub said bold superannuation moves would rely on Labour and National reaching agreement.
Labour did not support lifting the age by two years but wanted to resume payments to the NZ Superannuation Fund.
Calls over many years for crossparty consensus had come to nothing, Labour leader Andrew Little said last weekend.