At the same time, that universal NZ Superannuation payment isn\u2019t really enough for most people to live on. Not on its own, and not if they don\u2019t own their home freehold. No wonder, then, that to many people there seems little option but to continue working.<\/p>\n
At the New Zealand Economic Forum at the University of Waikato, Milford Asset Management chief executive Blair Turnbull warned that this country is facing a \u201csilver tsunami\u201d of retirees as the working age population shrinks, health costs rise and towns across the country see population decline.<\/p>\n
In 1970 there were seven workers to every retiree; today there are just four. And by 2060, he says, there will be only two workers to every person over the age of 65. Unless superannuation is prepaid by then, those two workers will be supporting another person, and one with high health costs.<\/p>\n
The debate round raising the retirement age to 67 is \u201crhetorical\u201d, he says, because it wouldn\u2019t raise anywhere near the money required. \u201cTreasury are very clear, unless it goes to like 72 or 73, we can\u2019t afford it.\u201d<\/p>\n
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Now, that may be manageable for white-collar workers like Turnbull or Wrightson, but for those who\u2019ve worked with their hands all their lives, the prospect of remaining on their feet well into their 70s is daunting indeed. For some in our community, the idea of spending years on the golf course like the silvering models on the glossy retirement village brochures, is laughable. M\u0101ori men have a life expectancy of only 73 years; Pasifika men around 75 years.<\/p>\n
Similarly, women are still paid less than men and they typically have fewer years in the workforce, to pay off mortgages and save for their retirement, so their nest eggs are far smaller when they reach 65.<\/p>\n
It\u2019s equity reasons like these that explain why Wrightson and the Retirement Commission argue for the retention of NZ Super, and oppose raising the retirement age beyond 65. She argues the fiscal savings from raising the retirement age would be offset by the extra support needed for those who cannot work until a later age.<\/p>\n
\u201cI think Treasury\u2019s position is purely fiscal,\u201d Wrightson tells me, this morning. \u201cThat\u2019s its job, but the issues are much wider. The first question we have to ask is, how do we want to financially assist older people in New Zealand? What kind of country do we want to be? Absolutely, you have to look at who an age rise would hurt. And that is very obviously women. Women were plunged into poverty, with a short notice change in the UK.\u201d<\/p>\n
That\u2019s also why there\u2019s a compelling argument that M\u0101ori or blue-collar workers should be able to access their retirement income earlier; Te P\u0101ti M\u0101ori co-leader Rawiri Waititi puts that at age 57, for M\u0101ori.<\/p>\n
Presumably it would be convenient to the Government if the next Retirement Commissioner \u2013 if and when minister Scott Simpson finally manages to appoint one \u2013 were to publicly support increasing the retirement age, like some of Wrightson\u2019s predecessors. Her opposition is a political problem<\/p>\n
We have a two-edged challenge: what the country can afford, and what individuals can afford. Yes, in some respects the distinction is illusory. NZ Super is funded by taxpayers; so too is the shrinking Government contribution to our KiwiSavers.<\/p>\n
But it\u2019s meaningful in the sense that while the cost may eventually be picked up by the public, a greater focus on savings can shift the demographic cost to that workers eventually pay for their own retirement, not just for their parents.<\/p>\n
Newsroom business journalist Alice Peacock has been at the New Zealand Economic Forum in Hamilton. She\u2019s been listening in on a panel discussion about funding retirement.<\/p>\n
Tracey Martin from the Aged Care Association says raising retirement age needs to be a systematic change \u2013 in part because 59 percent of those aged over 65yrs live with a disability. (She also argues the John Key Government was wrong to remove $1000 \u201ckick-start\u201d incentive to get people to sign-up to KiwiSaver).<\/p>\n
Blair Turnbull argues KiwiSaver should be compulsory \u2013 and always on top of pay-packets like Australia\u2019s, to make it work better. In other words, he agrees with the Retirement Commission that \u2018total remuneration packages\u2019, in which the employee is liable for their employers\u2019 contribution too, are entirely at odds with the spirit and intent of the KiwiSaver scheme. Wrightson calls this mechanism \u201cabhorrent\u201d.<\/p>\n
And former Attorney-General David Parker suggests we need a \u2018companion product\u2019 to save for a home or education, so that KiwiSaver so it can be kept purely for retirement savings and not depleted for a deposit on a first home. \u201cI really believe in the importance of high rates of home ownership, but I don\u2019t necessarily think that the answer is to allow people to stop saving or to withdraw their savings to do it.\u201d<\/p>\n
This focus on solutions is welcome \u2013 and, says Wrightson, it\u2019s what\u2019s been sorely lacking from wider public and political discourse. She\u2019s happy at the prospect that retirement income will be discussed in this year\u2019s election; she\u2019d be even happier if parties could agree an accord to elevate it beyond politics.<\/p>\n
\u201cThe easiest thing to do is put the age up and say, job done,\u201d she worries. \u201cAnd then the question goes, well, what are you going to do for the people who are affected by this? How long a runway are you going to give them? Because if it\u2019s a short runway, that\u2019s very bad policy. If it\u2019s a long runway, it\u2019s not going to fix your books, actually.<\/p>\n
\u201cSo, it\u2019s hard. And New Zealanders, I think, do need certainty around this. I think some of the problem has been that we haven\u2019t had a mature conversation about this for some time. We just go from election to election, and people hold different views, and there it is.\u201d<\/p>\n
Endnote: Commerce and Consumer Affairs Minister Scott Simpson has received advice from MBIE on candidates for the role of Retirement Commissioner, a spokesperson says, and is currently considering that advice.<\/p>\n