National lacks courage on retirement age - Act leader

Prime Minister John Key said today he was not planning a review of superannuation in New Zealand and was "comfortable" with the costs of superannuation. It was currently costing about 4.5 per cent of gdp and there were many countries where it cost in excess of 7 per cent of gdp. At the peak of baby boomers claiming super, it would cost between 8 per cent and 9 per of GDP.

The National Party lacks courage on the issue of the retirement age, says the leader of its support party Act, Jamie Whyte.

And Labour says National should "take its head out of the sand" on the issue.

"We need honesty on the looming superannuation and healthcare affordability issue," Dr Whyte said.

New Zealanders should be able to count on National to lead discussion about both and Act would be addressing them if National didn't want to.

Finance Minister Bill English today reiterated National's policy to keep the state pension age at 65, in accordance with a long-standing promise by John Key to resign as Prime Minister rather than increase the age.

The issue was raised yesterday by Australia Treasurer Joe Hockey after chairing the G20 Finance Ministers meeting - attended by Mr English.

Mr Hockey backed moves by Britain to raise the state pension age to 70 for people currently under 30.

Australia is gradually extending its pension age to 67 by 2023 and Mr Hockey said he wanted it even higher.

It had been set at 65 in 1908 when life expectancy was 55 and was still at 65 when life expectancy had risen to 85.

New Zealand Labour has a policy to gradually raise the super age to 67, with two month rises a year starting in 2020.

Dr Whyte said Mr Hockey's position "highlights the lack of courage the National Party on the retirement age issue."

Labour finance spokesman David Parker said National refusal to budge was risking a sudden increase in the age in the future.

"National's pretence that the age for eligibility does not need to increase looks increasingly dishonest," he said.

"The truth that National knows but won't admit is that without a comprehensive long term plan in place there will be a fiscal blow-out, and a sudden rise in the age would be inevitable in the future."

Since 2008 superannuation costs had risen from $7.3 billion a year to $10.2 billion.

"This is already more than is spent on all benefits combined plus the accommodation supplement and working for families."

United Future leader Peter Dunne took the opportunity to further advocate for his flexible superannuation policy which would allow New Zealanders to take the pension at any age between 60 and 70, with a lesser entitlement the earlier it was taken up.

He said is due to meet Mr English soon to discuss consultation on a discussion paper issue last August on the policy.

"I will be very surprised and disappointed if National, the party that values individual responsibility and freedom, disregards that," Mr Dunne said.

Prime Minister John Key said today he was not planning a review of superannuation in New Zealand and was "comfortable" with the costs of superannuation.

It was currently costing about 4.5 per cent of gdp and there were many countries where it cost in excess of 7 per cent of gdp.

At the peak of baby boomers claiming super, it would cost between 8 per cent and 9 per of GDP.

Raising the age of entitlement would not have the impact on cost that people thought.

"If you raise the age from 65 to 67, you reduce the cost of New Zealand superannuation by under 1 per cent of gdp and that doesn't even start before 2030."

Labour's plan to raise the age of super was not because it wanted to be fiscally responsible. It wanted to spend the money in other areas.

"They are just going to make people work longer so they try and bribe them with their own money."

Asked about Mr Dunne's flexi-super policy, Mr Key said it had some merit but it had no impact on the Crown's books.