Paul Little: Dad's army too costly to keep

Baby-boomers are marching into retirement like a gang of zombies. Photo / Supplied

The age at which we can begin to claim national superannuation, currently 65, needs to go up as recommended by the retirement commissioner Diana Crossan. As an army of baby-boomers approaches this age, like zombies descending on a defenceless hamlet, the day on which we can no longer afford to pay them also draws nearer.

In the past 25 years, life expectancy has increased by roughly seven years for males and five for females - that's seven or five more years of national super to pay for each person in the country. We didn't except to pay for that when the system was introduced and we can't afford to continue to pay it now.

Yet, Crossan's suggestion, moderately presented and crisply argued, has been rejected by the two main parties.

You can appreciate Labour's position. With its capital gains tax and other proposed tax reforms, it probably thinks it has come up with enough new ways to take money away from us this time round.

For National, John Key has said he made a commitment not to increase the age and if it goes up he will resign. Unfortunately, unlike "If you walk out that door, you're never coming back," this is not a bluff we are in a position to call. It is presumably a different sort of commitment from the one he made at the last election not to raise GST.

But as the Prime Minister also said when justifying flip flops in this year's Budget: "Governments change their positions. Good governments in transparent times take it to the people."

Both parties know one day, someone - presumably one of them - will have to take this to the people.

Crossan's proposal is modest, with an increase in age to 67 being introduced gradually until 2033 - a whole generation from now. The sooner it starts the less painful and better organised it will be.

The inevitable alternative, when the shift can no longer be postponed, will be a rushed and botched job.

Fewer people even need the national super the current system entitles them to in the years to come. The "elderly" are continuing to stay in the workforce at an increasing rate. Many of us shun the idea of retiring. We would rather continue working and earning thanks to good health and advances in medical technology.

A reformed system should ensure people who genuinely cannot work after 65 can still get a benefit. One way to help fund this is not to pay super to those who don't need it.

The retirement commissioner is bound to review superannuation every three years. This Government seems to regard that as a largely ceremonial role, like a minor functionary in the Chinese Imperial court, but don't expect Crossan to leave it there. She doesn't seem like the retiring type.

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