It's a Super time to be old

The Govt could scarcely believe its luck when Andrew Little was accused of considering means testing. Photo / John Stone

Watching the latest episode in our non-debate about superannuation has been like watching a car crash in slow motion. You can see what's going to happen but there's nothing you can do to stop it.

The fiscal and electoral forces at work are enormous and the cleverest politicians stay well away from the crash zone.

Labour leader Andrew Little stumbled into a right mess when he answered a question about the affordability of the universal pension and whether means testing should be considered.

He didn't directly endorse means testing NZ Super, but did question the scheme's affordability and the fairness of pensioners collecting the benefit and wages at the same time. He called for the Government to restart contributions to the Superannuation Fund.

Within minutes, he was being accused of considering means testing and the Government could scarcely believe its luck.

Prime Minister John Key and Finance Minister Bill English painted Little as the enemy of all hard working and/or hard retiring pensioners.

A few days later he had to front up to the press gallery to explain that Labour had never, would never, and could never means test Super.

Even his views about resuming contributions to the Cullen Fund had run away into the sand. He said Labour was not sure whether to resume them before or after achieving a surplus.

It was yet another abject lesson in how New Zealand cannot have a sensible debate about the future of its most expensive and fastest-growing benefit.

Yet every initial point made by the chastened Little was valid and has been made for years, including by Treasury and the Retirement Commissioner.

The numbers in this year's Budget show the growth of this universal benefit dwarfs any other movements in spending elsewhere. Treasury forecast spending on Super would rise $5.6 billion to $14.4b in the nine years to 2018/19. The benefit increases aimed at poor kids were just $200m a year in 2016/17.

Only half the increase in Super was caused by the ageing population, Treasury pointed out.

The rest was because the benefit's indexation to average wage inflation, rather than consumer price inflation.

The cost is forecast to almost double as a percentage of GDP to 7.9per cent by 2060, when it will hit $100b.

Yet this cost, which is amplified by the Government's refusal to contribute to the Superannuation Fund, has become the Voldemort of politics - "the problem whose name cannot be uttered out loud".

It is simple electoral mathematics.

There were 864,100 New Zealanders aged over 60 in September last year and 87 per cent of those voted in the election.

There were 743,200 aged 18-29 who could have voted in the election and who will have to pay the taxes to cover the $100b in pensions by 2060, yet only 49 per cent voted.

If the young had voted at the same rate as the elderly there would have been an extra 282,000 voters.

That would have easily been enough to get the attention of politicians and open up the debate to include the interests of those who will be paying taxes from 2020 to 2060 - the core of their working lives.

Instead, the debate is frozen in time because a generation of politicians nearing retirement can rely on the indifference, inattention and laziness of a generation who will have to pay the price.