Concerns over super cost are a distraction, says Joyce

Steven Joyce. Photo / APN

Economic Development Minister Steven Joyce has brushed aside concerns from the left and right about the fast rising cost of superannuation, saying they are "a distraction" from the Government's growth agenda.

But Budget figures showing the superannuation bill will equal total education spending by 2016 have fuelled a growing chorus of calls to address the looming problem.

Speaking at accountancy firm Grant Thornton's post-Budget breakfast yesterday in Wellington, Mr Joyce faced questions about why the Budget had not dealt with the challenge of funding superannuation payments for the growing number of people who will be retiring.

The Government has come under pressure to at least discuss whether the retirement age should be raised from 65 to 67 to reduce the mounting superannuation bill, which was described by Westpac economists yesterday yesterday as "a fiscal timebomb".

But Prime Minister John Key is sticking with his pledge not to shift the retirement age while he is leading the country, and Mr Joyce was yesterday downplaying the need for anyaction.

"I think the superannuation thing is a distraction from what we're dealing with over the next 10 years.

"We believe it is sustainable for the foreseeable future and the far bigger challenge is growing the New Zealand economy, growing exports.

"The reality is that if our GDP grows strongly over the next 10 or 15 years there will be a lot more choices for those sorts of issues for our older generations further out."

In Auckland, former National Party leader Don Brash was telling the Institute of Accountants that New Zealand had a bigger challenge than any other OECD country except Japan in controlling government debt.

"And that challenge relates to a significant degree to the ageing of our population, and the Government's refusal to take even the first and most obvious step to start dealing with that situation, namely flagging the inevitability of an increase in the age of eligibility for New Zealand Superannuation."

Dr Brash said it was a tragedy Parliament couldn't reach a broad consensus on the issue, as the Labour Party had recognised the inevitability of the change.

During this week's Budget debate, Labour leader David Shearer said: "Superannuation is something that John Key puts his fingers in his ears and whistles Dixie about, but I tell you what, in three years the entire superannuation budget will be larger than the education budget in this country."