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Older New Zealanders : How would you advocate for older New Zealanders? Labour Leadership Q&A #10

Posted by on September 13th, 2013

14 Questions for 2014

Virtual Hustings Meeting – Question 10

Older New Zealanders : How would you advocate for older New Zealanders?

Question : Senior people (those 50+) represent 53% of NZ voters, currently. As an active Labour supporter for some 40 odd years, I have been seeking from the Labour party the policy which will bring this group to strongly support Labour in 2014. Are any of the leadership candidates able to state what he is prepared to advocate for us, Seniors?

Submitted by : Dean Chandler-Mills, Birchville

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Explanatory Note: From September 10th to 14th 2013 as part of the official selection process for a new leader the New Zealand Labour Party is holding a “Virtual Hustings Meeting” hosted by Red Alert and organised by Scoop Amplifier. Over 7 days questions were solicited from eligible voters in the election. The questions and answers are now being posted as a set of 14 posts at the Red Alert Labour Party Blog. This started Tuesday 10th September, and continues till Friday 13th September. At Red Alert all-comers are welcome to discuss the answers in the comment section of the blog. The candidates are expected to participate in these discussions at times over the five days till Saturday 14th September.

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LABOUR LEADERSHIP CANDIDATES’ ANSWERS

Answer from Shane Jones

Senior people, myself included 54 years old, can expect from me affordability for doctors visits and prescriptions.

This is extremely important given the ageing profile of our society. Supporting the St Johns Ambulance service is vital to many senior people especially in the regions.

Personal security is a major priority. I am prepared to examine the feasibility of assisting seniors to keep there residences secure

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Answer from Grant Robertson

Labour must ensure that older New Zealanders continue to be valued for the contribution they make to the community.

One important policy is to ensure that aged care is funded and delivered well. This means enabling people to stay in their homes as long as possible through good in-home support, and investing in aged care facilities so that they have the quantity and quality of staffing that is needed.

This will mean minimum staffing levels and improved pay and conditions for rest home workers. I believe older New Zealanders should have the opportunity to learn, re-train and pass on skills.

I would restore funding for Adult and Community Education, and reverse National’s changes to student loans that are both limiting the opportunities of older New Zealanders. In addition programmes like SuperGrans and MenzSheds need to be supported to give the chance for older New Zealanders to pass on their skills.

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Answer from David Cunliffe

It has to be more than one policy.

We need to get it right from the start. We need a transformative economic agenda that creates a fairer, more prosperous New Zealand.

A better future with well-paid jobs, and where people are respected and valued. A future that is full of opportunities: a good public education; housing; free health care, and a secure retirement.

Our Party’s values recognise that older New Zealanders built this country and deserve respect and we value the skills, knowledge, and experience that older people contribute to their families and communities.

Labour will support older New Zealanders to be fit and able – not only to contribute to the workforce and communities but to enjoy their retirement in good health

ENDS


15 December 1975: National Day!

Posted by on August 28th, 2012

15 December 1975 is a day that will continue to haunt National.

It was on that date when the newly elected, powerful and undoubtedly popular Prime Minister Robert Muldoon abolished the compulsory New Zealand Superannuation Scheme which was initiated by the previous Labour Government.

If only Muldoon and the National Government of the day hadn’t terminated the scheme it would now be worth more than $240 billion and “transformed the NZ economy into a world beater over the past 30 years.”

According to Brian Gaynor and other leading economists, Muldoon’s “dreadful” political decision instead transformed New Zealand from the potential Switzerland of the Southern Hemisphere into a low-ranking OECD economy. And it was the worst economic decision in the past 40 years.

The ripples of that decision are still being felt to this day. In fact, if the scheme wasn’t squashed then New Zealand would be much better positioned economically, would be able to own many more assets and would not incur that much Crown debt.

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That’s right, you can’t hide if you are the PM

Posted by on October 28th, 2011

They say a week is a long time in politics- try 24 hours. Time for John Key to front up and debate the issues. Leadership is not just about having your face on a billboard.


Savings Policy-Details

Posted by on October 27th, 2011

For those looking for the details around today’s announcements on savings, here is the link. Also here is a link to Phil Goff’s interview on Close Up tonight, worth a watch too.

Some important elements to note

  • Labour is 100% committed to government superannuation being there for New Zealanders for generations to come. That’s why we are re-starting contributions to the Super Fund which National stopped. These policies are about securing New Zealanders in their retirement now and in the future. We are also guaranteeing that the rate of Super will be set at 66% of the average wage.
  • Making Kiwisaver universal gives more security for people in their retirement, and allows us to accumulate a bigger pool of national savings that can be invested in businesses, jobs and growing the economy.
  • Increasing the age of eligbility incrementally over 12 years from 2020 means that it will be 2033 when the the age is 67. This gives New Zealanders time to prepare for the change and ensures that we can manage our over 65 year old population as it doubles by 2050. Labour is introducing a transition payment for people who can not keep working in their normal job between 65 and 67. (eg manual labour).

Bill English has said that this is a “legitimate debate.” There are definitely different views on this issue. Let’s have the debate. Sadly John Key would not debate Phil Goff tonight. He said last night you can’t hide away when you are Prime Minister. Time to live up those words, and address the issue of how we manage our ageing population that everyone knows we have to deal with.


Too busy to care about the future?

Posted by on October 27th, 2011

I turn 40 on Sunday. (please, no presents ;-) ). Under the policy that Labour has announced today it is me and my generation that will have a bit longer to wait until we get government superannuation. From 2033 it will be at age 67 that we become eligible. Am I annoyed? No, I am pleased that Labour has fronted up to the New Zealand public, and taken the tough decision that everyone knows has to be taken. Leadership is about more than having your face on a billboard, its about planning for the future. Phil Goff has driven this policy, because it is the right thing to do.

I am pleased that it Labour is flagging this now so we can prepare ourselves. And I am pleased because this decision (along with the other parts of the savings policy) means that we are securing our individual and collective economic future.

For Mr Key the tough decisions are off the agenda. He is too busy, apparently, playing the short term photo opportunity game. Check out this exchange from Breakfast TV.


Tell the Government: Don’t Cut Our Future!

Posted by on April 27th, 2011

Flyer

t Cut Our Future


Tax cuts – what sort of country do you want to live in.?

Posted by on October 1st, 2010

 Cartoon : Cost of living

Herald’s view this morning…

Today, many kiwis received tax cuts.  Here are some facts about this tax policy:

  • the top 10% of wage and salary earners get 42% of the tax cuts:
  • the bottom 20% get 2%. 
  • people on a $1,000,000 salary (according to the IRD, there are around 650 people who earn $1m or more) have just received around $1,000 per week extra: people on New Zealand’s median wage of $28,000 per year will get just over $4.63 after accounting for the GST increase.
  • the tax cuts will cost just over $4b per year, or $14.3b over 4 years. 
  • after accounting for the greater revenue due to the increase in GST to 15%, the government will still need to borrow around $1b to fund tax cuts.
  • New Zealand Institute of Economic Research (NZIER), in its Sept 2010 update said: “We estimate around 50% of households will be worse off than a year earlier as rising food prices, GST and other one-off charges more than offset personal tax cuts” (p8)

When I bring up the argument around fairness and equity, some say the top earners pay a disproportionate share of the tax therefore deserve tax cuts.  I don’t buy into this, because whilst the top 10% of tax payers do pay a disproportionate amount of the tax, they also earn around 32% of all income

But it comes back to the question of ‘what sort of society do we want to live in?’  Lets face it, New Zealand has a pretty good standard of living.  For example, our schools are well resourced and our hospitals are first world.  Due to universal superannuation, we have the lowest level of geriatric poverty in the OECD (2% v Australia’s 24%), our Accident Compensation system is generally acknowledged as a great model (well, it was until Nick Smith started butchering it).  All these, and many more, services are paid for from tax revenue.  The more money that is spent on tax cuts, the less there is to provide the essential services that New Zealanders have come to expect. 

In many cities, these tax cuts will increase the gap between the few that have a lot and the many who are struggling with higher costs associated with the increase in GST, ETS and 4.5% inflation.  This angers me greatly. 

Some of the country’s richest men have been responsible for causing the most harm to our nation and its citizens.  The sort of society I wish to live in is one where every citizen is treated with respect and dignity and is valued for who they are, not how much they earn.  This is what I will fight for as long as I represent you in parliament.


The curious case of the missing recovery

Posted by on August 31st, 2010

Not much good news around about the NZ economy.

Standard & Poor Chief economist David Wyss told Auckland economists yesterday that there is a one in three chance of another crash and while the “recession is over”, it’s a very fragile recovery. NZ businesses say they cut too deep in the recession last year and are struggling to rebuild because many of the skilled workers they laid off have gone elsewhere – and who can blame them?  Tens of thousands got the chop with no redundancy pay and NZ wages and conditions are falling further and further behind Australia’s.  Confidence is faltering and today, our government will fork out around NZ$1.6 billion in taxpayers money to 35,000 depositers in South Canterbury Finance that were covered under the extended guarantee scheme.

The best our government can come up with?  Cut workers’ protection against unfair dismissal, restrict their access to union advice, cut their meals and rest breaks and put their holidays up for grabs.

You don’t have to go far to find some pretty grumpy voters. And they’re set to get a lot grumpier come the 1st October when GST goes up and most find that their tax cut has already been eaten up.

This clip from Jim Stanford (aka Lieutenant Stanfordo), who wrote “Economics for Everyone” has parallels, and also some warnings.  Paula Bennett’s Welfare Working Group has been promoting unemployment insurance, but look what happens to the workers who are laid off in this video.  Compulsory savings is an attractive idea, but without government guarantees, workers can end up getting nothing.  I hope someone makes a NZ version.


Key cuts savings now sets up a committee + more from Peter Harris on super

Posted by on August 17th, 2010

Amazing u turn from Key on savings. His two budgets both moved us away from a savings culture.

And his big move – set up a committee.

No secret that Peter Harris and I have different views – but important to have informed debate from all sides.

Policy progress has another Harris blog.

the third in a set of posts on savings and pensions issues from Peter Harris. The other two posts in the series are Good policy process – the case of New Zealand Superannuation and Why compulsory savings should not be on the agenda.


Silly idea number 2 – what do you think ?

Posted by on August 11th, 2010

Suspend payments into the “Cullen fund” – that’s the fund that helps pre-pay superannuation for when all the baby boomers retire in the next twenty years, and therefore makes national super sustainable.

Justify that decision on the basis that the global economic downturn means that the government is fresh out of cash, and would need to borrow.

Quietly overlook the fact that the share market was really low at the time and that that is precisely when smart people buy.

Forgo a huge profit opportunity for the “Cullen fund” as a result, leaving the future of national super uncertain, yet again.

I think this idea is -

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Tax cuts or Super?

Posted by on July 27th, 2010

Over at Policy Progress David Choat has written up a few observations on the future affordability of New Zealand Superannuation, based on presentations at the recent Retirement Income Policy and Intergenerational Equity Conference. Choat looks at various projections of the cost of the ‘retirement boom’ and some of the alternative options. He concludes by essentially arguing we have a choice: change our current entitlements or increase taxes to keep them as they are.

That conclusion highlights the folly of the arguments people like Don Brash have been putting forward. Brash argues that current Super entitlements are unaffordable. Fullstop. Brash and his contemporaries in National have spent years arguing that massive tax cuts are affordable and necessary. They’ve conveniently overlooked one of the biggest longterm implications – less money to pay for the baby boomer’s retirement!

I want to see New Zealand Superannuation remain as it is, a universal entitlement from the age of 65. But John Key’s promise to resign rather than cut it looks pretty hollow given his total lack of a plan for how to pay for it. In 10-15 years time when the crunch comes, Key will be off sunning himself in Hawaii while future generations work out how to plug the massive hole he and his crew have left us with.


Compulsory Super – No thanks says Peter Harris

Posted by on June 24th, 2010

Peter Harris is an old mate who used to work for unions and then Michael Cullen. He is a progressive thinker and I often agree with him. Don’t on this one but his points need to be considered.

Policy Progress is a blog worth following.


BUDGET 2010: Strategic Deficits and Fiscal Risks

Posted by on May 27th, 2010

Budget 2010 was not fiscally neutral.  To fund its large tax cuts package of  $14.5 billion the government has borrowed an extra $1.1 billion over four years.

The Crown borrowing requirement rises and interest costs roughly double before declining around 2021.

The current account widens from 3% to 7% over the forecast period.  The trend in net internation investment remains negative.

Longer term the fiscal aggregates look even worse.  We will have more to say about this in due course.

Meantime the world around us is poised on the cusp of a potential double-dip recession.  Germany’s voters are tiring of socialising the Eurozone’s mounting deficits.  The US and UK are already running huge deficits and accumulating debt due in part to the last round of fiscal stimulus.

World markets are highly fragile.  Korea and the Gulf of Mexico mean we don’t need too much else to go wrong.

Why has National strained the fiscal envelope so far while achieving so little economic return?

Treasury forecasts less than 1% additional GDP growth from Budget 2010 measures accumulatng over 7 years.

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Latest stats prove Bill English wrong

Posted by on May 26th, 2010

Bill English made the wrong decision to cut contributions to the New Zealand Superannuation Fund (commonly referred to as the Cullen Fund). He had an opportunity to fix that mistake in this year’s Budget. He didn’t take it. In fact he’s even gone back on his promise to resume contributions once the Crown accounts move back into surplus. He’d rather leave the cupboard bare for future generations.

The latest population projections released by Statistics New Zealand clearly show just how short-sighted that decision is. The share of workers aged 65 and over is projected to grow from 12 percent in 2006 to 21 percent in 2061. More than double the number of people will be claiming NZ Super, not to mention the extra costs in healthcare. Instead of preparing for that huge demographic shift, John Key and Bill English have prioritised tax cuts that disproportionately go to those on the highest incomes.

English claims that he would be borrowing to make contributions to the fund. But he seems very happy to borrow to pay for tax cuts. In fact had he continued to contribute to the fund over the past year, he’d have made the Crown a tidy little profit. Since Budget 2009 the Super Fund has increased by $3.6 billion, and in the nine months to 31 March it gained $891 million more than Treasury forecast on its investment portfolio.

We all need to face some cold hard realities here. The ‘retirement boom’ will really start to kick in over the next 10-15 years. Absent significant changes, we can’t afford it. Those enjoying tax cuts today may get a rude shock in another decade when the then government has to make a tough decision between cutting entitlements or significantly increasing taxes to pay for them. No doubt by then our smiling and waving PM will have skipped off to Hawaii leaving that particular mess for someone else to sort out…


Peter Harris on NZ Super

Posted by on May 13th, 2010

Peter Harris has done an interesting guest post over at Policy Progress on New Zealand Superannuation. Peter puts forward a compelling argument that the Brash Taskforce was wrong to argue that NZ Super is overly generous. He draws on data that shows average post-tax pensions in OECD countries to be about 70% of earnings after tax. Here in NZ it is 42%, making us the 5th lowest in the OECD.

Peter argues that the universal nature of New Zealand Superannuation makes it more equitable than equivalent arrangements in Australia, where differentials in earnings during someone’s working life are replicated in their retirement.

In defending the universal nature of NZ Super, he quotes Michael Cullen, who argued that providing basic income security in retirement is both the least and the most citizens should expect from the state. In other words it is the state’s role to ensure pensioners don’t live in poverty, but it is not the state’s role to ensure that their earnings in retirement reflect their earnings during their working lives.

Peter’s final comment focuses the debate not on whether the scheme is generous or affordable, but how we should pay for it:

By any standard, New Zealand Superannuation is affordable and sustainable. A programme that costs at peak no more than 10% of GDP is both. The legitimate question is whether that is the priority that the citizens want. Debate that by all means, and debate how it is to be funded, but please, as a matter of analytical rigour, do not prejudice the path of that debate by making the assertion that our scheme is “generous”.

For me that last comment is the critical one. How are we going to pay for it? Over the next 10-20 years the number of people over the age of 65 will roughly double while the number in the workforce will stay about the same (although it goes without saying that as we live longer more and more people are likely to continue working, thus paying PAYE tax, beyond the age of 65).

National cut contributions to the NZ Super Fund last year and has yet to demonstrate how it will make up the shortfall. Both John Key and Bill English are playing the short game on NZ Super – they’re kicking it to touch for a future generation to deal with.


Time for compulsory Kiwisaver ?

Posted by on May 3rd, 2010

A lot of focus today on the Aussie tax proposals.  And especially on the lack of the expected level of company tax drop.

Almost none on their decision to lift the employer superannuation contributions from 9% to 12%.

In NZ we have very poor and badly directed savings. We own a much smaller proportion of our own economy than the Aussies and therefore any trade balance of payments surplus leaves the country as foreign owners of our businesses profits. And we lack capital for small start up and rapid expansion businesses. So either our ideas or our young companies are sold. The stock market is much more limited than I remember it 30 years ago both in terms of companies listed and proportion of kiwis investing.

In the early 1970′s Roger Douglas did the design work on a scheme that was world leading. The Aussies built on it. The National Party under Muldoon abolished it.

Michael Cullen with a bit of help designed Kiwisaver. A good start in that it has a system going. But again the National Party under Key have gutted it.

It is time for a rethink. My solution would involve a compulsory Kiwisaver. We would use the Aussie system where the employers pay the contribution as part of the remuneration package as they do the PAYE. I would grow the % to the Aussie 12% over five or six years.

Michael didn’t want compulsion mainly because he saw that it would be an excuse for the National Party to scrap or means test NZ superannuation. My answer to that would be to attempt to do an accord whereby both major parties agree to leave it unchanged for say 20 years, and then possibly shift to an inflation rather than a wage based indexing.

That way all individuals and the country would be much better off.  We would redevelop our own capital market, own more of our assets and rebalance consumption and savings.

Please read the box to the right and above this posting headed “About”.


Lies, Damned Lies and Statistics

Posted by on February 25th, 2010

Bill English has been “trying it on” in his use of statistics, no doubt to try to get off the defensive around inequitable tax policy, his lack of a plan for growth and an embarrassingly strong performance by NZSF and ACC in the recent Crown Accounts.

Mr English alleged in a release last week that revisions to GDP data issued late last year showed the economy grew by “less than 1% a year”.

The Government Accounts  had been released the day before. Labour had attacked the government for having suspended superannuation prefunding and cutting ACC, when the investment performance of both had risen strongly.

Based on the Statistics NZ revised data, the average GDP growth for those three years was actually 1.74%.

The more relevant GDP growth benchmark, averaged over Labour’s last term in office, was 3.2% GDP growth per annum.

That was significantly higher than during National’s previous term in office of around 2.6%.

It was higher, year on year, for the three year period Mr English quoted, than the UK (2.6%), US (2.5%) or OECD average (2.3%)

This strong and sustained economic expansion was achieved alongside:

  • a massive reduction in Crown debt (net debt cut from 24.8%  of GDP to zero);
  • unemployment of 3.4%, the lowest in 21 years (less than half of today’s 7.3%)

This was achieved precisely because Labour did not follow Mr English’s advice in 2005 and 2006 to give early tax cuts. In short, not taking Bill English’s advice in 2005/06 meant NZ could afford a Budget in 2008 designed to support Kiwi jobs through the recession.

So if that was the real big picture, how did Mr English come up with his odd numbers?

  1. First, using highly variable quarterly GDP statistics, not the more aggregated and reliable annual numbers
  2. Second, choosing a short period impacted by the global recession to   bring the average down.
  3. Finally, by taking advantage of retrospective statistical revision  called chain linking whereby when recent data falls sharply (for example due to the recession) previous years are “smoothed” down to fit the trend.

The bottom line is National would give its right arm to have economic performance numbers today that matched the average under the last Labour government.

We have a Minister of Finance who has shown himself not above skewing data for political ends.

Lesson for Bill English: “when in a hole, stop digging”.


National’s ACC and Super scaremongering exposed

Posted by on December 6th, 2009

Earlier in the year John Key sent a letter to every senior citizen in my electorate reiterating his promise to resign if the National-led government cut the rate of superannuation or raised the retirement age. It was a hollow promise. Key knows it’s a promise he will never need to keep because he will be long gone by the time the crunch comes. It will be at least 10-15 years before the real pinch starts, and about 25 years before we feel the full effects of the “baby boomer” retirement. Key’s promise is all the more hollow because he, along with Bill English and the rest of the Cabinet, have cut savings to pay for future superannuation entitlements.

Under Labour, Michael Cullen set up the New Zealand Superannuation Fund and set aside some of the money that we’ll need in the future to pay for Super. Cutting contributions to the fund was one of Bill English’s first moves as Finance Minister. It was a stupid decision. Latest Treasury figures show the fund with higher than forecast returns of the $1.3 billion for the four months to 31 October. That return would have no doubt been higher if more money had been paid into the fund. National argued the cut was necessary due to the recession, ignoring that the best time to invest is when prices are low.

National’s scaremongering over ACC has a similar hollow ring to it. John Key and Nick Smith used the lower returns from the ACC investment funds to justify huge levy hikes and cutting of entitlements. But ACC’s investment funds had returns of $600 million in the four months to 31 October, which like the NZ Super Fund were higher than expected. Week by week, the National Party’s economic track record is looking all the more superficial and lightweight.


Gaynor on aussie v nz

Posted by on December 5th, 2009

As he has for well over 20 years Brian Gaynor gets it. In todays Herald he looks at difference in savings and investment between NZ and Aussie.

While he doesn’t quite say it the implication is that at some stage we are going to have to bite the compulsory savings bullet.

And Key/English with their gutting of Kiwisaver and abandoning of the Cullen fund have put us in a much worse position than a year ago,


Thanks Whanganui!

Posted by on August 11th, 2009

Great to see the community turn out in support of the Labour Caucus effort to reconnect with grass roots. We were well recieved and one of the first statements in the community forum was a vote of thanks from the local grey power branch in acknowledgement of inflation indexing the rates rebate to maintain value of the rebate over time. Health workforce development is another concern given that the Government is signalling a number of reforms for the sector. Finally the Governments cuts to the Adult and Community Education have seriously undersestimated the depth of feeling in coimmunities throughout Aotearoa/New Zealand…..A great range of issues covered!!