Tout le Monde? - C'est Moi! At the core of the current "debate" about the sustainability of NZ Superannuation are the same forces that have dismantled so much of the welfare state already: the forces of domestic and global finance. All the more curious, therefore, that Labour should be lining up behind them.
MY DAUGHTER AND I were driving back from the mall Saturday
afternoon, listening to the news on the car radio. “Everyone” was saying that
New Zealand’s superannuation scheme was in trouble. “Everyone” was similarly in
agreement that the retirement age would have to be raised from 65 to 67 years.
“Everyone” was also absolutely convinced that if this didn’t happen soon the
whole scheme would become unsustainable.
I remember saying to my daughter: “Whenever you hear a news
bulletin like that you should always ask yourself who this ‘Everyone’ is.”
“Everyone” certainly does not include a clear majority of
New Zealand’s political parties.
The governing party, National, is resolutely opposed to
making any changes at all to New Zealand Superannuation. NZ First is equally
adamant that there should be no change – unless it involves lifting the
percentage of the net average wage paid to superannuitants from 66 to 68
percent. The Green Party, likewise, opposes changing the scheme. Ditto for Mana
and the Maori Party. (Indeed, given Maori New Zealanders’ lower life expectancy,
they believe the eligibility-age should be lowered – not lifted!) United Future
also supports keeping the age at 65, but proposes that citizens be encouraged
to remain in the workforce a little longer, and uplift their super’ later at a
higher rate. Or, retire earlier, but at a lower rate.
The only major party currently advocating increasing the age
of eligibility (from 65 to 67) is the Labour Party. In this they are supported
(albeit very quietly) by the tiny, far-right, Act Party.
Labour justifies its position by pointing out that in just a
few years New Zealand will be spending as much on superannuation as it does on
education. What a curious argument. Why would a social-democratic party be
suggesting that the state should spend less on its older citizens than it does
on the young? We can only hope that Labour’s strategists are not planning to
turn the younger voters of Generations X and Y against the “selfish” Baby
Boomers. David Shearer hasn’t quite accused this latter group of
“intergenerational theft” – but that’s the electoral logic of his position.
Having established that “Everyone” does not include most of
the country’s politicians, let’s take a look at who it does include. Perhaps the most significant member of the “Everyone”
group is the Retirement Commissioner, Diana Crossan. Charged with providing the
Government with “independent” advice on retirement issues, the Commissioner’s
views should, on the face of it, be accorded considerable weight.
The only problem with being guided by the Retirement
Commissioner is that her views on this crucial matter are starkly contradicted
by a significant number of economists – including those working for the OECD.
As these economists indicated in their recent survey of international
retirement policies, New Zealand’s superannuation scheme compares extremely
favourably with all those operating in the 34 “First World” countries it covers.
Right now, in 2012, our scheme absorbs less than 5 percent
of New Zealand’s GDP – that’s about half the amount spent by the other OECD
countries. Yes, it is going to rise as the “Baby Boom” generation reaches
retirement age, but only to the percentage of GDP most wealthy countries are
paying right now. New Zealanders should be very proud of their scheme, which is
not only extremely cost effective, but also ensures that all our elder citizens are entitled to a level of income security unsurpassed
anywhere else in the world.
So why is our Retirement Commissioner crying “Wolf!” on the
cost and sustainability of the New Zealand scheme? Perhaps Ms Crossan’s views
have been influenced by her former employer – the financial institution which started
out as the Australian Mutual Provident Society – now known as AMP. This massive
financial institution merged last year with AXA Asia and Pacific Holdings, and
just under half its shares are held by HSBC, JP Morgan and Citigroup.
And that’s the scary thing. When you dig into the people and
institutions making up “Everyone”, you discover that just about all of them, in
one way or another, are bound up with vast financial corporations, all
possessing a powerful vested interest in wrenching the provision of citizens’
basic retirement income out of the hands of the state and into their own, private,
talons.
As is so often the case, these vast corporate bodies,
working through their highly skilled and fearsomely resourced PR organisations,
have contrived to create an apparently genuine consensus that change is both
necessary and inevitable. So successful have they been that, in a recent
TV3-Reid Research poll, nearly two-thirds of New Zealanders dutifully
regurgitated the opinion, force-fed to them by the finance industry, that the
eligibility-age for National Super should rise from 65 to 67.
“Everyone” does not believe superannuation is unsustainable,
but repeat the lie often enough and everybody just might think it’s true.
This essay was
originally published in The Press of
Tuesday, 19 June 2012.
