English leaves pension age for a 'future government'

The Government is claiming that its proposed regulation is important for New Zealand consumers. Photo / File

Prime Minister John Key and Finance Minister Bill English remain adamant that the pension age will not be addressed on their watch.

Mr English said yesterday the issue of a rise in the age of eligibility was "a matter for a future government".

"New Zealand has just had a 30-year debate about retirement income."

It had settled on a universal pension, which not many other countries had, KiwiSaver, which comprised personal and government funds, and the New Zealand Superannuation Fund.

Mr Key has said he would resign from Parliament before increasing the age of eligibility.

The issue has been revived this week, with a TV3 poll showing 63 per cent support for increasing the age, and an OECD report showing most OECD countries are increasing their pension age.

Labour wants the age lifted from 65 to 67 by 2033.

Under questioning from Labour leader David Shearer in Parliament yesterday, Mr Key said increasing the age of eligibility had much less of an impact than commentators might imagine.

"For instance, moving the age to 67 makes a difference of about 0.7 per cent of GDP, and that is not until 2030. So it is an issue, but growing the economy and fixing some of the other issues we inherited from Labour are more significant."

He quoted OECD pensions specialist Edward Whitehouse who had told Radio New Zealand: "I don't think that New Zealand pensions are unaffordable, in the sense that expenditure is still very much below the OECD average in the long term."

The cost of New Zealand pensions was less than 5 per cent of GDP, less than half the average of the 34 OECD countries of 11.5 per cent.

If there was no change, the Treasury estimated it would be 8 per cent of GDP by 2050.

Mr Shearer said Budget forecasts showed that spending on superannuation would exceed that on education within four years.

For most New Zealanders superannuation would be the significant part of their income as they aged and it was "only fair to give them time to make those inevitable changes".

Mr Key said that Labour's policy at the election to raise the age of superannuation and introducing a capital gains tax "was not to claim the moral high ground, it was a catch-up with the spending promises Labour had made".