Editorial: Give retirees chance to pay their own way

Opinion

Some savings in public expenditure are easier than others. Staff cuts the Government has announced for the Tertiary Education Commission and the Ministry for the Environment are in the easy political category. The commission was a creature of the previous Government's determination to centralise control of universities and has generated excessive paperwork for them. The Environment Ministry was home to a number of Labour projects that were largely symbolic.

The new Environment Minister, Nick Smith, has kept some - such as those concerned with climate change, waste management, air and water quality - and culled others. He has stopped programmes that urged Government departments to be energy-efficient, recycle, buy environmentally friendly products and become "carbon neutral". These exhortations must have been occupying about 20 fulltime-staff-equivalents, for that is the number of salaries the Government expects to save. Few besides the Green Party will count those savings a loss.

They are exactly the sort of "core public service" jobs John Key warned before the election he would cut, at the same time promising to boost "front-line" services for no overall retrenchment in public employment. But savings of the 20 Environment jobs, or 70 at the Tertiary Education Commission, are nickels and dimes compared with the cuts that will have to made sooner or later to bring the public accounts back into order.

Sooner or later the Government will have to take a hard look at the universal entitlements introduced during the long boom. Universal means available to everybody of a certain age or family size regardless of wealth. National superannuation is the classic example, and the political fallout from a means-test applied in the decade from 1985 to recipients with other income haunts our politics still.

It is very easy to add to superannuation entitlements and very hard to peg them to income tests. Like hawks on a hill, Labour MPs are poised to swoop on any hint that a new minister might stray from political safety. A few weeks ago, the question of whether contributions to the Cullen Fund should continue in the absence of Budget surpluses was portrayed as a threat to pensioners' security. Last week, the hawks swooped to defend pensioners' free public transport.

Free off-peak transport began last year as a benefit available on presentation of pensioners' "SuperGold Card". Predictably it has been very well patronised. The Government's Transport Agency figures for the four months to February show the take-up could soon exceed the budget for it.

When asked about this, Transport Minister Steven Joyce said: "We're just keeping a watching brief to see how it evolves." That was enough for Labour's transport spokesman, Darren Hughes, to suggest the scheme might be "in jeopardy". The Prime Minister then weighed in to reassure pensioners, "We will be funding the increase".

Politicians of all sides forget, perhaps, that each generation of retirees is different. Those who rebelled against the superannuation surtax in 1985 had earned their living in an era of high tax rates, universal family benefits, protected industries and jobs, high costs and Budget deficits.

Many of today's retired have enjoyed their peak earning years since 1985 in an economy of lower taxes and lower prices, exposed to world markets and surviving on low public debt and balanced Budgets.

Those who have retired with reasonable wealth today might be less susceptible to political bribery, more conscious of the economic costs of needless public spending and might just be more willing to pay their way.