Generational comparisons not helpful during superannuation debate, PM English says

Comparing circumstances faced by different generations is unhelpful during the current national superannuation debate, Prime Minister Bill English says.

Speaking to media Tuesday morning, English said younger generations who would face the higher super age of 67 should feel reassured that national super will be there for them.

“This is a generation who thought for quite some time there would be no superannuation. Acutually there will be, and it’ll look just like it does today,” he said.

Super would be accessible for about the same amount of time as people turning 65 today, due to longer life expectancies – roughly a quarter of their lifetime, he said.

What was needed was economic policies giving confidence to younger generations that their incomes will lift so they can deal with housing, family and student loan costs, English said. Government surpluses meant choices can be made about how to further support them, he added.

Regarding debate over the ‘Baby Boomer’ generation getting an easier ride than younger generations faced with student loan debt, a higher super age and high housing costs, English said: “I don’t think it’s a matter of getting it easy. I don’t think it’s actually that helpful to have the general comparisons because things change over time.”

“Back in the early 80s interest rates were 18%-20%. Today they’re four,” he said. “I’d much rather be in New Zealand’s economy today than how it was 20-30 years ago.”

Public support for the move

Meanwhile, English said National’s belief is that public opinion is “broadly supportive” of the move to raise the super age from 65 to 67 between 2037 and 2040. The issue was now not quite the political weapon other parties had hoped it would be, he claimed.

While National had not polled on the issue, its confidence on public support came from “just talking to people, road-testing the idea a bit,” he said. “In the end you’ve got to make a judgement on what people tell you.”

Critics needed to explain what they thought was wrong with the policy, English said. He said he believed their concerns had been addressed by the fact nothing would change for 20 years, and by the proposal to double the migrant residency test to 20 years.

“I think the public’s moved on a bit,” he said. “The public know this change was inevitable, this was the right time to take action on what was going to be inevitable, and New Zealand First and Labour are just out of step.”

Steps taken by former Prime Minister John Key promising the age would not be raised while he was in the role, were critical to restoring the electorate’s trust, English said.

“The opportunity we have now is building on the trust that John Key earned by putting his job on the line over the issue,” he said.

Some advice was received from Treasury on the changes, English said. However, the government “had a reasonably clear idea from early on about what we thought was the clear, simple approach that everyone could understand.”

Asked whether National considered an earlier age rise, English said it would be difficult to get public support for “something that looked too urgent.” An earlier move also was not required.

Not announcing changes would have created even more uncertainty, he claimed. “Because people know something should change. They’re just waiting to see who’s going to do it.”

English said he had “not particularly” taken a political risk with the announcement.

“We wouldn’t have made the decision if we thought it was a big risk. I just think a number of the political parties are out of step with where New Zealanders are,” he said.

“This is a country that’s been through a significant recession, the impact of the earthquakes. It’s built confidence in its ability to sell to world markets, it’s a growing economy. It’s not a brittle, backward looking electorate. But you have got a couple of brittle backward looking political parties.”