Nine years ago an Opposition leader on the cusp of power made a timid promise not to change the terms of entitlement to national superannuation as long as he was Prime Minister. Last weekend a television interviewer put the same question to Bill English. To his credit, he did not paint himself into the same corner. Not so Andrew Little. "A Labour Government I lead will not raise the entitlement age for superannuation and we will re-start contributions to the NZ Superannuation Fund," he said.
Here we are again. The difference is, that this time the Opposition leader is not quite on the cusp of power. By this time in 2008, National had been leading in the polls for a year and Labour was resorting to dire warnings about what a National Government might do. This time the Opposition party is still well behind in the polls and National can run on its record. It has no need to resort to scare tactics which would cause the voters to contemplate a Labour-led Government.
So this time the Opposition leader did not face the same fear-mongering on the subject of superannuation. In fact, the Prime Minister had presented him with a golden opportunity to keep his options open in the event that Labour should win the election. English said he had not made John Key's commitment so there could be "a bit of a reset". He added, "we would not anticipate any drastic change". The Government was "just working through the long-term affordability" and he agreed, "People deserve to know what the Government's view is when they go to the polls."
Little found these comments "dithering", which was true, and urged English to "come clean", which is fair enough. He had no need to go further and make his age commitment. Little appears to believe Labour lost the past two elections because its policies were too bold. He cancelled its proposed capital gains tax when he became leader, only to see the Government bring in a bright-line test. Now he has called off its policy to raise the super age, and waits to see what the Government will do.
Restarting contributions to the NZ Super Fund would be helpful, and the Government should do it this year with some of the surplus in prospect, but it is time to address the age entitlement too. The first baby boomers, born in 1946, are now 70. Many of them did not retire at 65, they continued earning a salary even as they drew the pension.
It is no excuse to say their taxes offset their pension. On the incomes they earn they ought to be paying the same tax as younger people.
Modern health services have enabled people to stay fit and well beyond the age of 65 and to live on average well into their eighties. Longevity has increased by about five years since New Zealand last raised the age of superannuation, as recently as the 1990s. That was a painless exercise at the time and it is not clear why it has become politically difficult now.
A party worthy of power will propose an age of qualification that is fair to retirees and the taxpayers that support them.