Sunray Says: John Key has found a way to increase the age of eligibility to superannuation

SUNRAY – commentary on politics and policy
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Read Darel Hall‘s commentary every Tuesday.
Darel has a background in tertiary education policy and politics and was the Deputy Director of the Labour Party Research Unit during the first term of the last Labour-led government. His goal is to provide a thoughtful perspective that causes readers to reflect on their experience, understanding and beliefs.

As I have argued before demographics in this area will drive policy no matter which party is in power. A gradual raising of the Superannuation will happen, it’s really a question of who does it, when and the details of how.

Once Labour announced it would take up the Retirement Commissioner’s recommendations and gradually raise the superannuation eligibility age John Key had a major problem. Labour had accepted the inevitability of doing something about eligibility while John key had painted National into a corner by saying he would resign rather than change the age of eligibility.

Now John Key has used the Confidence and Supply agreement with its client party United Future to cross the policy Rubicon into the eligibility debate.

United Future’s policy has two parts. The first is a reasonably simple cost-neutral principle whereby people can start claiming Super before 65 and get less or later and get more. I believe New Zealand used to have the first part of such a system.

The second part of the United Future policy, the part that actually deals with the cost problems of Superannuation and an aging society is compulsory Kiwisaver. That part, the crucial part, is not National’s policy and is not part of the Agreement and will not be part of the policy framework.

Now John Key “can’t see why there is any harm in us going out and at least having a discussion document asking people for their thoughts” and “there is an awful lot of water to flow under the bridge before it goes anywhere beyond the discussion document."

In other words there can be change.

In other words John key will use a process branded as a United Future required exercise to engage the public in a discussion about the future of Superannuation. And with John Key’s comments we now know it is no longer 100% cast-iron guaranteed that the age of eligibility will not change – otherwise why discuss it and why open up the slither of possibility things could change?

No folks, what we see here is a good old fashioned U Turn with United Future as National’s policy beard.

Personally I think it’s good for the country that National has found this way to finesse its commitment.

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