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Home / New Zealand

Audrey Young: This week could turn out to be a decisive one in election year

Audrey Young
By Audrey Young
Senior Political Correspondent·NZ Herald·
10 Mar, 2017 04:00 PM6 mins to read

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Not that English is showing any indication of the risks involved in the decision. Illustration / Guy Body

Not that English is showing any indication of the risks involved in the decision. Illustration / Guy Body

Announcement intended to show English as bold and a different leader to Key hands NZ First slew of options at polling time.

This week may prove to be one of the most important turning points in election year.

Bill English took a big political gamble on raising the pension age and may have sent a crucial number of voters into the arms of Winston Peters.

Labour elected the standard bearer of Generation X and Y, Jacinda Ardern, as its deputy leader, a move which may have rescued Andrew Little from the doldrums.

And the Maori Party's bid to regain most of the Maori seats took a new twist with King Tuheitia endorsing Rahui Papa in Hauraki-Waikato against his cousin, Nanaia Mahuta.

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Each of the events this week has the potential to change the outcome of the election but the most potent issue is superannuation, even though the increase from 65 to 67 would not kick in for 20 years.

Not that English is showing any indication of the risks involved in the decision.

In his welcoming comments to guests at a caucus party at Premier House on Thursday, he said he had been harangued by an audience in Kapiti that day [Chamber of Commerce as it happens] for his super policy being "too soft".

His attitude to super - and his style as a new Prime Minister - can be explained by his homily at the same cocktail party which likened politics to plumbing.

Voters, he said, saw them both as a slightly dirty job that someone has got to do. "They just want you to be good at it, or they'll get someone else to do it."

English's super move was not a response to fiscal crisis - the fact that the move will save as estimated 0.6 per cent of GDP in 2040 may be a desirable saving of $400 million but it hardly constitutes an essential response to anything like a crisis.

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It was designed to make him look bold, decisive and forward-looking.

It was not designed to differentiate National from Labour or New Zealand First. It was designed to differentiate English from John Key.

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Without a skerrick of support from other parties, English sees it as an essential element of his bid to create a sense of newness and momentum in a third-term Government that could otherwise be seen as tired.

Whatever drove English over the move to raise the age, it was evident he did not expect it be battered quite so emphatically by Labour's new Joan of Arc.

The inter-generational resentment fuelled by Jacinda Ardern on prime-time television was certainly more effective than National's sales job on raising the age to "do the right thing".

Her elevation to deputy leader was always going to be compelling decision in itself and was likely to give Labour a small bounce in the polls.

But the fact it happened a day after the superannuation announcement was a piece of fortuitous timing that gave her something of substance to talk about with authority.

English and Joyce did not begin to vigorously counter-attack in the inter-generational war for two days, finally arguing it would actually reduce the tax burden on young taxpayers of the future and that, because of improved life expectancy, those affected (120,000 in its first year) will spend the same amount of time on a pension as the 65 year olds today, on average.

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The public has enjoyed relative golden era of stability for the past 16 years over superannuation which English may have mistaken for complacency about change.

The simple change being proposed in 20 years will usher in a new era of uncertainty that goes wider than the policy proposal.

It has already led to speculation about the one previously settled fundamental - universality - with speculation by commentators that means testing or a new surtax should be considered as well.

English has form in tampering with retirement savings but clearly he believes that the credit he will get for being bold and "doing the right thing" will outweigh the capital Peters and others may make out a new period of uncertainty.

English has overseen a huge number of changes to the KiwiSaver savings scheme, including ending a tax exemption on any employers' tax contribution above the minimum which has transferred hundreds of millions of dollars from what would have gone to savers' account into Government revenue.

As Associate Finance Minister, he also sat alongside the last unelected Prime Minister, Jenny Shipley, who adjusted superannuation entitlement on the basis it was "the right thing to do", in September 1998 during the Asian crisis.

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She did not survive to tell the tale and nor did her supposedly essential adjustments.

So what does this reopening of the super debate do for Winston Peters in election year? It is hard to see any downside for him.

The issue of superannuation has defined his political reputation more than immigration.

He got rid of the surtax on superannuation, he stopped Shipley's cuts while he was still in Government and he later got the Super Gold discount card for pensioners.

Peters' response this week has been somewhat misjudged. His slowness to condemn the age rise was construed in some quarters as a potential to support it.

In a particularly prickly frame of mind, he thought it was an insult to even be asked if he supported the policy, given his record.

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He forgets that many of the journalists asking the questions (and many of the audience) were still playing on the jungle gyms when he was doing his super-man act in the 1990s.

It is not inconceivable that Peters could do a deal with National but reach an agreement to vote against an increase in the super age because National had managed to get the numbers from elsewhere in a separate deal with, say, an invigorated Maori Party.

He was way off beam in calling what English proposes "a betrayal".

English after all is seeking a mandate for a policy. But Peters is well placed to offer himself as insurance against the likelihood of it passing and any future hidden agendas.

It is more like a gift than a betrayal.

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