Flip-floppery over super all the rage

Vernon Small comments on the superannuation debate reignited by Bill English.

So the dance of hypocrisy takes another whirl.

The flip-flop-athon of superannuation policy continues.

Those of us condemned to remember, or report on, the 1980s and 1990s can recall Labour breaking an election promise by implementing a superannuation surcharge – effectively means testing the universal pension – and then National increasing the impost after promising “no ifs, no buts, no maybes” to abolish it. The upshot was a cross-party accord that went nuclear, as in Chernobyl.

We can also remember when National tried to argue that reducing the indexation link from 65 per cent of the net average wage to 60 per cent was not a cut – just a reduction in future upward adjustments.  

And now we are into another turn of the wheel as National under Bill English spins towards lifting the age to 67 – at a time far, far away in a country not unlike our own – without any indication they will have the political support to make it so in any likely post-election universe.

Meanwhile, Andrew Little is still contending that one of the main reasons he opposes lifting the age to 67 – and pressed to dump that policy when he became leader – is the impact it would have on those who would struggle to work till they are 65, let alone beyond. Yet provision for them was contemplated in Labour’s 2011-2014 policy.

Labour said they were being fiscally responsible, and National was not. Now National says it is being fiscally responsible, and Labour is not. Labour leaders spent two elections telling us the scheme was unaffordable. Bill English and John Key spent the past eight years telling us it was affordable but ministers are now tweaking their argument – it is “affordable”, but at the current pension age it radically reduces options for other spending.

In a nutshell, the back and forth is really just a debate about whether their hypocrisy is worse than ours. They have both, at different times, sung from the same hymn sheets – just never at the same service.

It’s not often you get to write this, so give me a second to savour it: You may not agree with his prescription, but Winston Peters has been a model of consistency and predictability during decades of debate on the issue. (Yet for a few hours there on Monday even he seemed to waver in his unequivocal rejection of any rise in the pension age.)

Winston is nothing but consistent on superannuation.

The main problem with National’s old-new policy is the long lead time, and the abrupt transition in six month bites from 65 to 67 between 2037 and 2040. Making the switch late, brutal and short cuts across the arguments that a gentle increase makes it easier to plan and also defies the logic of life expectancy gradually increasing.

The politics is transparently cynical.

Push the problem so far into the future it is over the horizon for most voters. Dump the full future costs on those under 43, but absolve the vote-rich over 44-year-olds of any concerns.

And unlikely to ever go ahead. The problem still exists though, and something needs to be done, it just won’t be what Bill wants.

As voters we are in an invidious position.

It’s Hobson’s Choice.

After more than three decades of policy flip-floppery it appears none of the current parties in Parliament has a super policy that is both fair and sustainable.

I think the pensioner from St Mary’s Bay might disagree with Vernon there.

It beggars belief that Bill English panicked so badly over superannuation. With no consideration put before cabinet and just two discussions in recent weeks he rushes it out after being blind-sided on The Nation. It appears given recent developments that the government has developed tits for hands.

 

-Fairfax

 


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