Susan
Edmunds, Money Correspondent
The
Opportunity Party says New Zealanders would be better served
by dropping NZ Super and replacing it with an entirely new
support system.
Questions about the sustainability of
NZ Super have been raised again, this time at the Waikato
University economics forum, by Milford
Asset Management chief executive Blair
Turnbull.
It follows earlier warnings
from Treasury about the increasing cost of an ageing
population.
TOP leader Qiulae Wong spoke to Midday
Report and said it was a huge structural problem for New
Zealand that had been known about for a long time.
She
said it was frustrating that successive governments had
“continued to kick it down the road”.
Wong said TOP
would replace NZ Super – along with all other forms of
government assistance – with a new citizens’
income.
This is similar to a universal basic income
but is means tested so that people who earn more than
$350,000 a year cannot access it.
She said this weekly
payment would be a bit lower than NZ Super but in the
interim a top-up would be paid for people who qualify for NZ
Super.
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Then, over time, means testing would be applied
so high-income earners were not receiving extra.
Wong
said it would be fairer that raising the pension age or
taxes to pay.
The policy would be paid for by a land
value tax, and savings on the benefits that would be
replaced.
Financial coach Liz Koh said there were some
other factors being missed in the discussion at the Waikato
forum.
“At present, average KiwiSaver balances are
relatively low at retirement because people haven’t been
saving into it for their entire working life.
“This
will change over time. In 20 years time, most people
retiring will have been in KiwiSaver for about 40 years and
the average balance at retirement will be significantly more
than it is now. Between now and then the average balance
will gradually increase.”
She said people could be
given more encouragement to save more, although that could
be difficult for people on low incomes.
“Secondly,
most people want to work past the age of 65 through a desire
to keep active and have a purposeful life. I believe
attitudes towards retirement have changed and most people
now understand that, due to increased life expectancy,
retirement can last a very long time and there are some real
downsides to retiring early – not only financial downsides
but psychological ones.
“It may be that the age of
eligibility for NZ Superannuation increases over time. If it
does, I believe people should have options to still retire
at 65 if they choose but perhaps on lower payment than those
who choose to retire later.
“This is important, as
increasing the age has negative effects for some people, for
example, people of ethnicities whose life expectancy is
lower on average or people whose job requires physical
strength and
agility.”
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