John Roughan is an editorial writer and columnist for the New Zealand Herald.

John Roughan: Not all need a pension at 65

Key's vow to leave super alone getting more costly by the year

One in five people over 65 are still rolling up their sleeves and going to work every day. Photo / Getty Images
One in five people over 65 are still rolling up their sleeves and going to work every day. Photo / Getty Images

To my astonishment I have passed the age of 60. In fact two more years have passed since that milestone flew by. In no time at all, I'm going to wake up one morning to realise I can claim the public pension and Winston's card.

This is ridiculous. It really is.

Babyboomers have begun to declare 60 the new 40 because it's true. It's not just that we feel as fit and well as we were at 45, but human longevity has visibly rocketed in our lifetime.

My grandfather died at 66, my father is now 86. At this rate, unless the age of entitlement is raised I could be receiving the pension for a quarter of a century.

I have no need to stop work at 65 and I know I am not unusual. The Salvation Army's report on the social state of the nation this week found the employment rate of people 65 and over has risen from 15 per cent five years ago to 21 per cent last year.

Think about that. One in five people over 65 are still going to work every day.

It would be interesting to know what proportion of the 65-70 bracket are continuing in paid employment. My guess is one in three, possibly more.

John Key has not made many political mistakes but even on his side of the fence there is a feeling he went too far when he solemnly promised the terms of national superannuation would not be altered while he was Prime Minister.

He has adhered to the promise so rigidly that even when the Retirement Commissioner recommended a gradual two-year increase in the age of entitlement from the year 2020, he wouldn't touch it.

Key is 10 years younger than me and possibly thinks my generation is not much different from the previous one, the Grey Power generation. But there is one big difference. Grey Power had a fierce sense of entitlement to a universal pension (not means-tested) on the argument that they had paid a top income tax rate of 66 per cent in their peak earning years. Budget deficits through all those years meant their tax was not paying for the full cost of their welfare state, but those arguments are over, Grey Power has largely gone.

The point is, babyboomers have paid only half that top personal tax rate for most of their working lives and I don't think we have the same sense of entitlement. In fact we have grown up harbouring doubts that national superannuation would even be around when we got there.

That was a legacy of 1975 when Muldoon introduced a universal pension at age 60, replacing a previously means-tested benefit at 60 that became universal at 65, and cancelled a superannuation savings fund that would have been reaching maturity right now.

Ten years later, when the babyboom came to power, the welfare state with its high tax, universal benefits, import controls, high prices and general wage orders, was spinning out in constant strikes, inflation, double-digit unemployment and declining real incomes.

Key's generation was just coming of age in the 1980s and it saw the rearguard struggle of Grey Power against successive governments that tried to impose a surtax on pensioners with private incomes.

He must have noticed that most of the pensioners at Grey Power meetings did not appear to be in the surtaxed class. The surtax was just a symptom of that generation's deeper dismay with a greater economic change under way. They had been children in the Depression, adolescents and soldiers in wartime, lifetime voters for social security.

Key must have noticed that amid all their commotion the 1990s National Government managed to raise the age of superannuation. It went from 60 to 65, increasing by three months every six months so nobody nearing retirement had to wait much longer. That increase proceeded without a protest from my generation, in our 40s at the time.

Now, healthy, wealthy and continuing to work, we are of course claiming the public pension as soon as we can get it. A 5 per cent drop in the number of people on all other benefits last year - partly a result of more stringent requirements on solo mothers to look for work - was outweighed by new pensioners.

If a government proposed to raise the age to 70 in the same easy steps, I think we would understand. The Prime Minister should put that proposition to this year's election and ask to be released from his promise.

Winston might try to make hay on the prospect but he now has passed superannuation age with no need of a pension and sadly no intention to retire.

Debate on this article is now closed.

- NZ Herald

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John Roughan is an editorial writer and columnist for the New Zealand Herald.

John Roughan is an editorial writer and columnist for the New Zealand Herald. A graduate of Canterbury University with a degree in history and a diploma in journalism, he started his career on the Auckland Star, travelled and worked on newspapers in Japan and Britain before returning to New Zealand where he joined the Herald in 1981. He was posted to the Parliamentary Press Gallery in 1983, took a keen interest in the economic reform programme and has been a full time commentator for the Herald since 1986. He became the paper's senior editorial writer in 1988 and has been writing a weekly column under his own name since 1996. His interests range from the economy, public policy and politics to the more serious issues of life.

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