Brave Bill's super pledge: But what about tax & health?

Touching the third rail of superannuation is a brave act by any government, but what about those other curly questions?

Good on you, Bill. I respect political courage. Too often in New Zealand, superannuation promises have been used to buy elections, beginning with Rob Muldoon back in 1975. He made the age of entitlement to universal super 60; it took years of pain and a raft of broken promises to get the age lifted to 65 (back where the old age pension began).

The evidence that we collectively are living longer cannot be refuted. People joke now about 70 being the new 60. On average we are working longer too. That sooner or later we have to adjust the policy parameters around superannuation is obvious.

Retirement income policy has a very difficult track record In New Zealand. While my own personal politics are well known, I agreed with David Parker and disagreed with John Key last election when it was the Labour Party that had the courage to put its head on the block and propose an adjustment to the superannuation policy qualifying age. This time it's the National Party that is put its head on the block for what is a  sensible and (sooner or later) an inevitable policy change.      

There other equally hot potato issues that are not confronted out of political fear or expediency. A capital gains tax is one. While it is incorrect to suggest there is no capital gains tax in New Zealand, it is limited to specific situations where it should be general.

A capital gains tax will not solve solve the high property prices problem as some here argue – it might help at the margin, but that is all. Our neighbour over the Tasman Australia has long taxed capital gains and has the same housing price problem that we do.

In fairness to Andrew Little, his point that physical work is demanding and that in fairness certain manual workers should not be expected to go on working when they reach 65, has merit. That should be dealt with using a targeted benefit aimed at those whose work is such that earlier retirement is appropriate.

However, to pay everyone over that age – including many still pulling substantial incomes – just to catch that smaller group does not make sense. The other party spokespeople l heard on it struck me as just jumping on the old “buy me off” political bandwagon. 

There is another big gap in public policy towards ageing in New Zealand. We have the big debates about making sure retirement income policies are adequate and we pour a heap of resources into paying for it. Equally important, though, is our being prepared for the inevitable rise in the demand for health services that comes with an ageing population.

The need for more services will grow as the baby boomer population bulge comes through. There is little focus on that demand; there should be much more attention paid to that need. There is little point in having an income if there's no-one there to look after you when the need arises.  

Bill English's super commitment struck me as very brave. I would love to see more bravery in our national political contest, but given past experiences and the way this opening 2017 salvo has gone, I expect to die hoping.