It was very clever of the Government announcing that it was going to pump $12 billion into defence before saying anything about where the money’s coming from.
A lot of us got all excited about the defence money because, even if you’re a pacifist, you would have to agree that our defence force has been running on the smell of an oily rag for a very long time. That’s just a fact.
And we kind of accepted that there would have to be trade-offs. We just didn’t know, and we still don’t know, what those trade-offs are going to be.
Today though it’s being proposed that NZ Super should be the Peter that pays Paul, and that we need to sort out the elephant in the room and make people wait longer before they get the pension. And I agree.
It’s come from economist Cameron Bagrie who has been trying to find out where the defence spend money is coming from. Without any detail forthcoming from the Government, he’s suggesting the Super scheme.
He’s saying: “We cannot continue to shy away from that rising expense if other priorities, such as defence, are going to be met.”
He’s not the only one talking about the pension scheme needing a reworking.
The NZ Herald’s head of business Fran O’Sullivan says it was a National Government that increased the entitlement age for NZ Super from 60 to 65.
But that the current National Party leadership is sticking with the idea of not doing anything about the eligibility age until 2044. The party’s current commitment is to keep the age at 65 for another 19 years.
Fran O’Sullivan describes that as “nonsense”. And I agree with her too. There is no way we can afford to keep paying the pension to anyone and everyone once they turn 65 for another 19 years.
National’s policy at the moment commits it to increasing the age of entitlement to 67 after 2044, which means no one born before 1979 will be affected. So someone who is 47 now, for example, would still get the pension when they turn 65. Crazy.
There’s also nothing in National’s policy about doing something about the other nonsensical part of all this – where people still get the pension if they keep working beyond 65.
Because the pension —when it comes down to it— is to help stop people falling into poverty after they retire. That’s what it’s designed for. It’s not there to pay for some joker’s beer on a Friday and Saturday night, who doesn’t need it for anything else because he’s still working and earning a salary or wages.
Or he might be someone who’s made a truckload of money running a business and still earns a dividend or maybe even still draws a salary.
Back to Cameron Bagrie. He’s saying today that health and NZ Super make up 37% of government operational expenses and that things are only going to get tighter with more defence spending.
He says: “We now have a new pressure in the mix: national security - which is being prioritised. No credible political party can ignore that.”
Referring to the pension, he says: “We cannot continue to shy away from that rising expense if other priorities, such as defence, are going to be met.”
It’s not something former National Prime Minister Jim Bolger shied away from.
Somehow, he managed to convince New Zealanders that increasing the qualifying age for was “plain common sense”, because people were living longer and receiving the pension for a lot longer.
Age eligibility went up to 61 within a year of that and it’s been 65 since 2001.
And just like it was looking less affordable then, it’s looking even less affordable now.
That's why we need to have the same fortitude - or our politicians do - and they need to bite the bullet, instead of ignoring it.
Take your Radio, Podcasts and Music with you