“There’s going to be fewer workers, and more retirees. If you look at the maths, it doesn’t look good. Something has to be done. Raising the retirement age, at some stage, is, I think, inevitable.” Cameron Bagrie, Bagrie Economics
Cameron Bagrie, the former chief economist of ANZ, recently said that raising the retirement age is “inevitable” as he pledged to pursue issues of public policy in his new career as a consultant.
Others soon weighed in on a similar note, including Hamish Rutherford, who argued that the present crop of politicians was leaving the problem to someone else, Martin Hawes, who thinks that pay National Super at 65 is like buying a red sports car you can’t afford, Martin Van Beynen, who states that rich oldies should not get the state pension and, inevitably Gareth Morgan, putting the pigeon among the cats in a rare moment of consensus-seeking, by asking Kiwis to decide how he should spend his superannuation.
A range of interesting views to be sure, albeit weighted towards those with more than a passing acquaintance with the dismal non-science of economics.
However, the initial contribution by Bagrie rather clouded the already muddy waters by confusing the age of entitlement to national superannuation with the age of retirement. There is, of course, no legal age of retirement in Muddle-earth.
The renewed Bagrie debate is not about “raising the retirement age”. That age is a personal choice, albeit Hobson’s for some. It is instead about raising the uniform age when people can receive national super and associated tax issues.
The MSD’s The Business of Ageing Project confirms that seniors (65 years and over) will continue to make a growing economic contribution as workers, taxpayers and consumers. The overall labour force participation rate for seniors is currently around 24%. This constitutes 7% of the 2016 overall labour force and is projected to rise to around 12% by 2061.
Many recipients of New Zealand Superannuation don’t view it as a welfare payment so much as a tax payer earned entitlement to which they have contributed indirectly over their many years of taxpaying. Quite a few of them would have been quite content to have had the more direct contributory scheme as proposed by the third Labour Government and canned unceremoniously by new National PM Robert Muldoon after the 1975 election.
However, whatever the arguments are about the age national superannuation is paid and how it is treated tax-wise, people who know better shouldn’t muddle those debates with “the age of retirement”.
Lyall Lukey– Liveserver, Silververve