John MacDonald: Do we all really need the pension at 65?

It was very clever of the Government announcing that it was going to pump $12 billion into defence before saying anything about where the money’s coming from. 

A lot of us got all excited about the defence money because, even if you’re a pacifist, you would have to agree that our defence force has been running on the smell of an oily rag for a very long time. That’s just a fact. 

And we kind of accepted that there would have to be trade-offs. We just didn’t know, and we still don’t know, what those trade-offs are going to be. 

Today though it’s being proposed that NZ Super should be the Peter that pays Paul, and that we need to sort out the elephant in the room and make people wait longer before they get the pension. And I agree. 

It’s come from economist Cameron Bagrie who has been trying to find out where the defence spend money is coming from. Without any detail forthcoming from the Government, he’s suggesting the Super scheme. 

He’s saying: “We cannot continue to shy away from that rising expense if other priorities, such as defence, are going to be met.” 

He’s not the only one talking about the pension scheme needing a reworking. 

The NZ Herald’s head of business Fran O’Sullivan says it was a National Government that increased the entitlement age for NZ Super from 60 to 65. 

But that the current National Party leadership is sticking with the idea of not doing anything about the eligibility age until 2044. The party’s current commitment is to keep the age at 65 for another 19 years. 

Fran O’Sullivan describes that as “nonsense”. And I agree with her too. There is no way we can afford to keep paying the pension to anyone and everyone once they turn 65 for another 19 years. 

National’s policy at the moment commits it to increasing the age of entitlement to 67 after 2044, which means no one born before 1979 will be affected. So someone who is 47 now, for example, would still get the pension when they turn 65. Crazy. 

There’s also nothing in National’s policy about doing something about the other nonsensical part of all this – where people still get the pension if they keep working beyond 65. 

Because the pension —when it comes down to it— is to help stop people falling into poverty after they retire. That’s what it’s designed for. It’s not there to pay for some joker’s beer on a Friday and Saturday night, who doesn’t need it for anything else because he’s still working and earning a salary or wages. 

Or he might be someone who’s made a truckload of money running a business and still earns a dividend or maybe even still draws a salary. 

Back to Cameron Bagrie. He’s saying today that health and NZ Super make up 37% of government operational expenses and that things are only going to get tighter with more defence spending. 

He says: “We now have a new pressure in the mix: national security - which is being prioritised. No credible political party can ignore that.” 

Referring to the pension, he says: “We cannot continue to shy away from that rising expense if other priorities, such as defence, are going to be met.” 

It’s not something former National Prime Minister Jim Bolger shied away from. 

Somehow, he managed to convince New Zealanders that increasing the qualifying age for was “plain common sense”, because people were living longer and receiving the pension for a lot longer. 

Age eligibility went up to 61 within a year of that and it’s been 65 since 2001. 

And just like it was looking less affordable then, it’s looking even less affordable now. 

That's why we need to have the same fortitude - or our politicians do - and they need to bite the bullet, instead of ignoring it. 

See omnystudio.com/listener for privacy infor

Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's podcast with John McDonald
from News TALKS'B.

Speaker 2 (00:12):
You might have heard me say last week that I
thought it was very clever of the government announcing that
it was going to pump twelve billion dollars into defense
before saying anything about where the money was coming from,
because a lot of us got all excited, didn't we
about the defense money? Because even if you're a pacifist,
you'd have to agree that our defense force has been

(00:34):
running on the smell of an oily rag for a
very long time. That's just a fact. Everyone knows that
some are happy about it, most of us probably not.
So most of us agreed that what the government announced,
and I think we accepted were kind of accepted that

(00:55):
there would be trade offs. We just didn't know and
we still don't know what those trade offs are going
to be today, though, I'm very excited because it's been
proposed that New Zealand super should be the Peter that
pays Paul and that we need to sort out this
elephant to the room and make people wait longer before

(01:15):
they get the pension. And I agree. It's come from
economist Cameron Bagree he's been trying to find out without
much luck, by the way, but he's been trying to
find out where the defense spend money is coming from,
and so without any detail forthcoming from the government, he's
making a suggestion. And he's saying today that one area

(01:37):
where the money could come from is the New Zealand
super pension scheme. And I think he's spot on. Here's
what he's saying, quote, we cannot continue to shy away
from that rising expense if other priorities such as defense
are going to be met. End of quote. He's not
the only one talking about the pension scheme needing or reworking.

(01:58):
The New Zealand heralds out of business frean O'Sullivan. She
points out that it was a National government that increased
the entitlement age from sixty to sixty five over a
period of years, but that the current National Party leadership
is sticking with his idea of not doing anything about
the eligibility age until twenty forty four. The party's current

(02:22):
commitment is to keep the age at sixty five for
another nineteen years, and fran O'Sullivan says, quote that's nonsense,
and I agree with her too. There is no way
we can afford to keep paying New Zealand souper to
anyone and everyone once they turn sixty five for another
nineteen years. That's what's going to happen at this tage.

(02:42):
National's policy at the moment commits it to increasing the
age of entitlement to sixty seven after twenty forty four,
which means no one born before nineteen seventy nine would
be affected. So someone who is say forty seven now,
for example, would still get the pension when they turn
sixty five, even though they've got another, in theory eighteen

(03:04):
years of working life ahead of them. There's also nothing
in National's policy about doing something about the other nonsensible
part of all of this, where people still get the
pension if they keep working beyond sixty five, And that's
nuts as well. And it's nuts because the pension, when
it comes down to it, the pension is there to

(03:24):
help stop people falling into poverty after they retire. That's
what it's designed for. It's not there to pay for
some jokers beer on a Friday or Saturday night who
doesn't need it for anything else because either he is
still working earning a salary or wages or might be
someone who's made a truckload of money running a business
and still earns a dividend or maybe even still draws
a salary. But back to Cameron Baggery. He's saying today,

(03:49):
Economist Cameron Baggery, he's saying today that health and His
Zealand Super make up thirty seven percent of government operational
expenses and that things are only going to get tighter
with that defense mending. He says, quote, we now have
a new pressure in the mix, national security, which is prioritized,
and no credible political party can ignore that. He says

(04:12):
that will not come cheap, and he says we could
cut health spending to pay for it, or we could
do what's really needed. Talking about New Zealand Souper, he says, quote,
we cannot continue to shy away from that rising expense
if other priorities such as defense are going to be met. Hallelujah.

(04:33):
It's not something Former National Prime Minister Jim Bolger shied
away from either. Somehow, somehow he managed to convince New
Zealanders that increasing the qualifying age for New Zealand Super
was quote plain common sense because people were living longer
and receiving the pension for a lot longer. This is
back in the nineties, so the age eligibility went up

(04:54):
to sixty one within a year of that, and it's
been sixty five since two thousand and one. And just
like it was looking less affordable then, it's looking even
less affordable now. Well, in fact, it's not just looking
less affordable. New Zealand super is unaffordable and we need
to have the same fortitude, or our politicians at the

(05:17):
very least need to have the same fortitude as Jim
Bolger and they need to bite the bullet instead of
ignoring it. I would be all good with the age
of entitlment going up to sixty seven, and I would
be all good not paying the pension to people still working,
because if we want to up the game on national security,

(05:38):
we have to be realistic.

Speaker 1 (05:40):
For more from Category Mornings with John McDonald, listen live
to news Talks It'd be christ Church from nine am weekdays,
or follow the podcast on iHeartRadio.