KEY POINTS:
Suggestions by the Retirement Commissioner to the Government to consider raising the pension age have been welcomed by industry experts despite a quick rejection by politicians.
Finance Minister Michael Cullen said yesterday the Government would not raise the retirement age or cut New Zealand super.
His comments follow
a report by the Retirement Commission suggesting the retirement age be lifted to 66 or 67 to help lower the costs of New Zealand Superannuation over time.
National Party leader John Key also said he would not look at raising the retirement age or cutting super, if elected.
Auckland University retirement policy and research centre co-director Michael Littlewood said the present age of 65 had been the law since 1898, but with people living longer it was timely that it be reviewed.
"To say that we are not going to change it is simply not sensible."
Institute of Financial Advisers chief executive David Hutton said increasing the pension age was a worldwide trend and he believed it would be inevitable in the future.
Mr Hutton said Dr Cullen's reluctance was relative to the fact that it is one year away from an election.
"By 2050 around 37 per cent of the Government's budget will have to be spent on paying for retirement. That becomes a big policy issue for any Government."
The commissioner's report also questioned whether the added incentives introduced to KiwiSaver in the May Budget would be affordable over the long term.
The cost of KiwiSaver is expected to rise to more than $2 billion a year by 2016, of which nearly $1.7 billion will be attributable to the $20 a week Government top-up and employer subsidy which kicks in from April.
Mr Littlewood said the costs had increased significantly since the 2006 Budget, which predicted KiwiSaver would cost $1.2 billion by 2011.
He said it raised questions about whether the end justified the means. "You have to ask whether it can be justified and whether taxpayers will be willing to pay for it."
Dr Cullen said it was right for the commissioner to point out that fully funding superannuation and KiwiSaver well into the future will be a challenge.
But he said it was one the Government believed it could meet.
Mr Key also said he believed New Zealand Superannuation was "totally affordable". National has yet to spell out its policy in regards to KiwiSaver.
Grey Power New Zealand Federation national president Graham Stairmand did not agree with suggestions the pension age could be raised.
"If you're going to change [the age] and make it 67 then you will have to have some transition arrangements at 63 so they don't suffer any hardship."
Housing was getting "well beyond the means of families", Mr Stairmand said.
"That means there will be a lot of people renting and you just can't survive adequately on New Zealand superannuation without a reasonable amount of other income coming in."
Maori Party co-leader Tariana Turia was also opposed to raising the pension age, saying it would work against Maori.
"The statistics tell us that the life expectancy for Maori is at least eight years lower than that for non-Maori," said Mrs Turia.
"These people have been paying taxes all of their lives and yet when it comes to seeing the fruits of their contribution at the end of their lives, they often miss out.
"We have always advocated that superannuation policy should be reviewed to consider the appropriate entitlement age for groups whose life expectancy is lower."
