Thousands of New Zealanders' bodies will still wear out by age 65 despite increased life expectancy and there's no case for raising the age of eligibility for superannuation, Labour says.

Political reaction to today's announcement by the Government to raise the age of entitlement from 65 to 67 has been swift - with parties lining up in opposition, albeit for different reasons.

• Labour

Labour leader Andrew Little said National had "stumbled into" the announcement, and there was no case for raising the age of eligibility.


However, Little said he thought the proposal to double the residency requirements for NZ Super so applicants must have lived in New Zealand for 20 years was "about right".

But there was no case for increasing the age for Kiwis, Little said.

"Life expectancy may have changed, but bodies wear out pretty much at the same rate as they always have done."

Little said if affordability was the issue then the Government should immediately resume contributions to the NZ Super Fund. If that occurred and continued at a healthy level then NZ Super was affordable long-term, he said.

Labour previously campaigned on a higher eligibility age but Little scrapped that policy when he became leader.

"I spent 20 years of my professional life working with thousands and thousands of New Zealanders who struggle to get to 65 now and get superannuation. The idea that they may be required to work another two years is just not something I support at all," Little said.

"1972 - if that's the cut-off date now, this is the generation who have had to pay for their tertiary education, are missing out on housing...and now are waiting two years longer to get superannuation."

Asked if today's announcement would push NZ First into the arms of Labour after September's general election, Little said he was concerned with his own party.


• New Zealand First

NZ First leader Winston Peters said English could not be trusted and the only safeguard that current superannuitants had was a vote for NZ First.

"Clearly Mr English has been caught in a maelstrom of his own making and any promises of indexation or universality must be set against his having gone back on that, three times in his political career.

"The good news is of course that he is finally listening to New Zealand First's call for a fairer residency qualification, albeit taking up to 20 years is five years short of what would be fair."

Peters would not say whether he would support a Government that would raise the age of eligibility, saying he didn't do deals before voters went to the polls.

"I'm paying attention to the fact they have been looking to tinker with Super for a long time, and at the first chance they have got, on different occasions, they have attacked it."

• United Future

United Future leader Peter Dunne's policy is a "Flexi-Super" scheme, where people could decide at what age they would start receiving the pension.

He said he did not support the policy announced today, saying adjusting the age of eligibility to 67 was "simply tinkering".

"There is no guarantee it won't be adjusted again over the next 20 years...the fundamental issue here is about giving people control over superannuation for themselves.

"That's why I come back to Flexi-Super, where you can choose a lower rate if you go earlier or a higher rate if you go late. Coupling that to compulsory Kiwisaver would give everyone a measure of certainty."

While the outcome of September's election was unknown, Dunne said he hoped post-election negotiations could result in changes to the Government's plans for NZ Super: "I think the issue is live, still".

Dunne strongly opposed doubling the qualification period for migrants - saying it was "pandering to xenophobia".

• Act

Act Party leader David Seymour said the Government had "kicked the can down the road by 20 years", and in doing so had saddled future generations with the brunt of the change.

"This change won't affect anyone born older than 45, meaning the Prime Minister is protecting baby boomers, while pulling the rug out from under young people.

"It's intergenerational theft - cynical political calculus in place of leadership.

"The New Zealand Government's policy puts us 20 years behind Australia which begins to raise the age of eligibility this year, from 65 to 70 by 2035."

• Maori Party

The Maori Party want the superannuation age lowered for Maori and Pacific Islanders because their life expectancy is lower than non-Maori.

English today ruled that out, saying the life expectancy gap could well have closed in 20 years' time.

Maori Party co-leader Marama Fox said at this stage her party could not support the proposal from National.

"I think it is really good that they have a long lead-in time, and we have that review seven years out from implementation...but we support the Flexi-Super that [United Future leader] Peter Dunne talks about, I think that is innovative and suits the different demographic in our country."

• Mary Holm

Meanwhile, Mary Holm, whose personal finance column appears in the Weekend Herald, said her initial reaction to the policy was positive.

"Broadly, it's a big improvement on [John] Key's absolute refusal to even consider it."

The looming cost of superannuation was not as great as forecast in most other Western countries, she said, partly because New Zealand had a higher birth rate.

That meant changes similar to those announced today could be enough to ensure the ongoing affordability of the scheme, although it would be up to Treasury to crunch the numbers.

Many people aged under 45 would not expect NZ Super to be as generous as it currently is at the point they turned 65, so the decision to make the change in 20 years' time could be smart politically, Holm said.

It would be important to address the problem of people in manual jobs being unable to keep working beyond 65.

"But, then again, by the time we go 20 years down the track there are probably not going to be people doing physical work. Fewer and fewer are doing it now."