New Zealand’s superannuation is insufficient for retirees, with retirees requiring significant savings for a comfortable post-work life.
National wants to raise the age to 67 from 2044, while Labour is sticking with 65.
Finance Minister Nicola Willis and Labour’s Barbara Edmonds briefly agreed on the need for discussions, but no action followed.
National’s Nicola Willis pulled me up on last week’s column, saying she’s always been up for the conversation on NZ Super.
This is irrespective of my jibe that a prudent Finance Minister would address various Treasury warnings over the sustainability of New Zealand Superannuation upfront with appropriatepolicy responses in her May 22 Budget.
But Willis says while National is currently constrained by its coalition agreement, she maintains her personal/party position is that the discussion on affordability needs to be had. Further, National was the only party to “have run the political gauntlet” on campaigning for change in recent times.
“Labour weaponised that against us in 2023 with a scaremongering phone call campaign to superannuitants who would not even have been impacted. It really is Labour who have stood in the way of needed change,” she texted.
There was a further sting in this particular tale.
Long-serving Labour MP David Parker bowed out of national politics this week.
Willis observed that when Parker was finance spokesman, Labour did float a higher age of eligibility for NZ Super, only for that to be reversed by Andrew Little when he became leader.
It’s worth recollecting at this point that there were a few brief hours last year when political sanity broke out among the two top female finance supremos over how to even start addressing the looming fiscal iceberg that is New Zealand Superannuation.
It was at the Herald’s Mood of the Boardroom breakfast in October 2024. Some 77% of the chief executives taking part in the Herald CEOs’ Survey felt major changes, such as a capital gains tax and/or a more efficient superannuation scheme, were needed to address long-term fiscal challenges. Naturally, Willis and her opponent, Labour‘s Barbara Edmonds, were going to be questioned on this clear shift in business opinion.
And when it came to the political debate, Willis and Edmonds agreed there needed to be a serious conversation.
Nicola Willis agreed at last year's Mood of the Boardroom breakfast that a serious conversation about superannuation was needed. Photo / Michael Craig
The politically experienced Willis turned to Edmonds: “Barbara, if you’re up for tough conversations, at the last election my party started a tough conversation about New Zealand superannuation.”
Edmonds’ response: “I’m more than happy to have that discussion, and have it together on superannuation. It is a big challenge we are going to face … let’s have that conversation.”
“Well, that’s an achievement”, chirped Willis.
Everyone with even a smattering of brain cells knows that New Zealand Superannuation in its current form is unsustainable: Raise the age of eligibility, means test NZ Super or apply greater clawbacks for those still working. But do something.
But by day’s end, Edmonds had reneged. There were to be no discussions. At least not any leading to raising the age of eligibility for NZ Super above 65 years.
National and Labour‘s consensus that there needed to be a conversation had lasted a mere “few hours”.
Detente disappeared as quickly as it arrived.
The adults were no longer in the room. Pity.
This is the inanity of 21st-century New Zealand politics.
Willis and Edmonds are both members of major political parties whose leaders have resorted to captain’s calls to push difficult issues off the table.
Rather than do the hard policy yards and seek to build cross-party consensus on such measures as constraining the bill for NZ Super and/or raising more revenue through capital gains taxes, former leaders such as National’s Sir John Key when it came to NZ Super, and Labour‘s Dame Jacinda Ardern on capital gains taxes, have said not while they were Prime Minister.
For her part, Edmonds has said it was “irresponsible of both the Government and political parties” to shut down conversation around a capital gains tax (CGT). Labour is once again considering the impost.
That looming fiscal iceberg can’t be ignored much longer.
Willis and Edmonds were on the right track.
Surely it is now up to Prime Minister Christopher Luxon and Labour leader Chris Hipkins to back the judgment that Willis and Edmonds displayed last year and open cross-party talks?
The adults need to get back in the room.
Or does the country have to wait for a full-blown fiscal crisis to force action?
