Politicians raspberry Retirement Commissioner’s idea

The Retirement Commissioner’s suggestion of lifting the age New Zealand Superannuation kicks in has been greeted with a resounding raspberry by both main political parties.”No way,” was how Finance Minister Michael Cullen responded to a question about it from Good Returns at a briefing on the government’s Half Yearly Economic and Fiscal Update.

Cullen said there had been “enormous political disturbance over the course of 30 years” because of different parties changing the rules around superannuation and he had no intention of revisiting the issue.

It was one of the reasons there had been such a strong vote by older New Zealanders for MMP in 1993, he said, “and arguably the economy has paid a reasonably heavy price for that piece of fiddling around. We are not going to go there again.”

National’s finance spokesman Bill English is similarly negative.

“We’ve got no interest in changing superannuation,” he says.
Retirement Commissioner Diana Crossan’s three-yearly review of retirement policy said that, with people living longer, the pension age of 65 could be raised to 67.

“People are living longer and there are more of them,” Crossan argues. “So the question has to be, how do we finance that?”

The report was also critical of some aspects of KiwiSaver, saying it favours those on higher incomes.

The incentives to join KiwiSaver are “generous”, the report argues, and calculates that in 10 years time, will be costing the government’

$2 billion a year, partly in the form of the $20 a week top up and partly through employer tax credits.

English says National is looking at changes to KiwiSaver, but would not elaborate further.

KiwiSaver numbers surge past 300,000

The number of people joining KiwiSaver continues to defy initial expectations with over 316,000 New Zealanders signing up in just the first five months, Finance Minister Michael Cullen and Revenue Minister Peter Dunne said today.As at 30 November, 316,865 New Zealanders were actively saving for their retirement through KiwiSaver. This news comes just a month after KiwiSaver numbers reached the quarter million mark.

“New Zealanders are embracing KiwiSaver in huge numbers,” the Ministers said. “They know that KiwiSaver makes saving for retirement easier than ever before.

“One of the most encouraging signs is the large numbers of younger New Zealanders who are joining the scheme.

“Nearly 20% of KiwiSavers are younger than 25 and over 33,000 KiwiSavers are less than 20 years old. This is great news as these young New Zealanders are taking up the savings challenge early and will be able to build a substantial nest egg for retirement or in some cases for their first home.

“It’s also encouraging that over half of KiwiSavers are aged under 45.

“While not all political parties have backed KiwiSaver, New Zealanders are showing that they know our savings problem is real and they know that KiwiSaver makes it easy to save.

“It is also important to note that KiwiSaver will build up a substantial pool of domestic capital available for local firms to draw from for investment.

“The large pool of savings built up as a result of superannuation schemes in Australia has been sighted by some commentators as the single most important factor behind the growing wealth across the Tasman.”