Pension age to stay put, pledges Key
National’s pension age pledge has been debated within the party, but a decision was made to stick with the promise to keep the age at 65.
The admission from Prime Minister John Key that National had ‘‘kicked the tyres’’ on whether to revisit his 2008 and 2011 election promise is a sign of the building pressure on National to address the looming pension crisis.
Labour is openly campaigning to raise the pension age to 67 – and even Grey Power darling, NZ First leader Winston Peters, acknowledged yesterday that change was probably inevitable.
But the only reason people were talking about raising the age of entitlement was the failure of the Government’s economic plan, Mr Peters said. Raising the age in 2020 wouldn’t fix today’s problems.
Last week’s Budget brought the issue into fresh focus after it was labelled ‘‘penny pinching’’ for measures including a tax on children’s after-school jobs.
There has been a growing chorus of cries from economists, other politicians and commentators for the Government to raise the pension age to 67 in line with other countries we compare ourselves with.
Mr Key said there had been internal discussions ‘‘and we always kick the tyres on issues’’, but he had given a very strong pledge to the electorate not to tinker with the current age of eligibility or level of entitlements. That pledge included a promise to resign rather than go back on his commitment.
The pledge was made before the world went into the global financial meltdown. But as the baby boomers start retiring, the costs of superannuation are set to balloon to more than $12 billion within four years – and the recession, followed by a sluggish recovery, not helped by the Christchurch earthquakes, means the economy is not growing fast enough to cushion the blow.
Mr Peters said yesterday that National was softening people up for a change.
‘‘It is only a matter of time before pensions are ‘adjusted’,’’ he said.
‘‘The National Party’s cheerleaders, behind the scenes, have mounted a big campaign to get the pension age increased and the amount reduced.’’
But Mr Key said it was not his ‘‘expectation’’ that National would go into the election seeking a mandate from voters to reverse his promise.
Labour finance spokesman David Parker told TV One’s Q+A the Government needed to be honest about the age of eligibility for superannuation.
‘‘Within the forecast period of [the] Budget, we spend more on superannuation than on the total of education. That’s more than preschool, primary, secondary, tertiary combined.
‘‘We are actually getting to the point that through not addressing that issue we’re actually having intergenerational conflicts being set up.’’