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…
“the share of workers aged 65 and over is projected to grow from 12 percent in 2006 to 21 percent in 2061. That’s more than double the number of people claiming NZ Super..”
No, it is not. Close, but your basic maths fails you.
12 x 2= 24. 21 is less than 24, therefore, it isn’t a doubling, and isn’t even close to “more than” a doubling.
Time to dial down the rhetoric, me thinks…..
Lets face it English isn’t about right or wrong he is about ideology and is becoming more Muldoon like in his blind self belief. His ideology doesn’t care if retired people live in poverty because according to him they put themselves there.
Theres seems to be a hint of Muldoonomics in the Key-English-Joyce budget. Spend and wave
@ ghostwalkernz that is spooky.
PS can I come off moderation please
Ask again in a couple of weeks Trevor
“There is no art which one government sooner learns of another than that of draining money from the pockets of the people.”
The Wealth of Nations, Book V Chapter II Pt II
Oops, i’ve posted that under the wrong topic.
@ ghost, well spotted. Both the Muldoon government and this current bunch of Tories ran the country from poll to poll and headline to headline. Muldoon’s low point was a rugby tour to firm up the vote in marginal seats. Muldoon eventually ran out of stunts, as will this lot. Power for power’s sake is the underlying philosophy of the Tory.
The Cullen Fund is something they, the NACTS obviously despise… Shortsighted gits like The Double Dipper really make me angry.
I would not like to be retired in 30 to 40 years time and not have my own “plan B” beacuse these swine will condemn anyone who doesn’t to misery in their retired years !!
At its simplest, if governments refuse to acknowledge the impact of retiring babyboomers, my generation will by settling outside New Zealand.
I never considered spending the rest of my life outside NZ until late 2008, when it was decided that my future and the future environmental and social health of my country was to be ignored.
Fred Smith said:
Fred, Chris talked about a more than doubling of the number of people claiming Super. Assuming that NZ has 6 million population by then, 21% of 6 million people is definitely going to be way more than twice 12% of 4 million. Not quite triple in fact.
Check it with a calculator.
Perhaps it is your basic math which has failed you?
:rolleyes:
Good point Loota , Fred Smith must work in Bill Englishs office doing his financial predictions
With a crystal ball
Did you bother to read the release before putting out this blog contribution?
The 12% and the 21% are NOT the percentage of the population in the over 65 bracket.
They are the percentage of the over 65 population who will still be working.
The claims you make may have some truth in them. They have however nothing whatso-ever to do with the numbers you quote.
Alwyn – I concede that my wording wasn’t clear. I’ve made a minor typographical correction to make it clear that the increase in the % of the workforce over 65 and the number eligible for NZ Super are separate, although linked issues.
The fact that an increasing number over 65 will still be in the workforce doesn’t change the fact that they will still get NZ Super. Those over 65 still in work are also more likely to be part-time, therefore contributing less to the tax base than younger full-time workers. So the issues are clearly linked and related to the affordability of both NZ Super and other entitlements our senior citizens currently have.
I think it’s really important that we show respect to our older citizens. But if we’re going to preserve the existing entitlements, we need to be planning for that now. Cutting taxes and increasing debt, whilst also cutting social services, does the opposite.
Agreed Chris
And super is important, we can’t have the elderly working til the day they die. Why their deaths could create corpse messes in the workplace!