Hooton on English’s super scam

Matthew Hooton discusses Bill English’s super scam:

Is it better if it was a cock-up or actually planned?

The kindest thing to say about Bill English’s superannuation announcement on Monday is that it is jolly sporting of him to try to even things up a bit with Labour-Green.

Evidence is that Mr English’s proclamation the government intends to quickly raise the age of retirement over two years from 2037 was entirely an exercise in PR. No government or Parliament can bind its successor, let alone one seven elections from now. Nothing Mr English and Finance Minister Steven Joyce said this week will have any impact whatsoever on Budget 2037 – or even Budget 2018, unless it causes a change of government.

It was a brain-fart, barely even out of his mouth and hardly even discussed in cabinet. He was caught on the hop on The Nation and had to rush out something on the Monday following. It even surprised caucus, not unlike the debacle over UNSC resolution 2334.

In reality, Mr English’s position on superannuation is in substance identical to that of his predecessor – a cast-iron guarantee there shall not be the slightest change for as long as he is prime minister or even a member of Parliament. Moreover, even if the plan is implemented 20 years hence, it will not do all that much to change the negative fiscal impact of the ageing population, which the Treasury’s models indicate is more powerfully a function of rising healthcare costs and the debt servicing charges of not dealing with such issues early enough.

Winston won’t allow any changes and Bill English is going to need Winston. Every other party has said no way as well…so it’s a dead duck.

Beehive insiders differ over what prompted Monday’s announcement.  The official story tells of some months of policy work, a discussion involving all National MPs and board members at a caucus retreat in January, a detailed cabinet committee debate and the signing off of the proposal on Monday at the cabinet. According to Finance Minister and campaign chairman Mr Joyce, it was always planned to announce the change on Monday in exactly the way it was.

Other insiders dispute this tale. They say the discussion at the caucus retreat was extremely general, involved no specific proposals and reached no conclusions. They acknowledge a paper was working its way through the cabinet process but that Mr English had no intention for it to be the main news takeout of his TV interviews over the weekend. He was, it is claimed, just musing in response to questions about something that happened to be on his mind. Mr English then made things worse in his Monday morning media interviews, forcing a rushed announcement that afternoon.

We’ll know which account is more plausible when the Official Information Act requests are processed.  Either way, the media maelstrom that followed has been entirely out of proportion from the substance, or lack thereof, of the announcement itself.

The second narrative is the one that is true.

It is difficult to know whether National supporters can have more confidence in a government that carefully planned this week’s drama or one which blundered into it.

Still, it’s done now and Mr English has to make the best of it.

And that is the problem, Bill English doesn’t really have a good track on making the best of anything.

For those voters who have a probably exaggerated view of the fiscal impact of future superannuation payments, Mr English gets to position himself as far more responsible and even statesmanlike than his predecessor – let alone his woeful Labour opponent who seems now to be promising no change, ever. Having campaigned for an increase in the retirement age the last two elections, Labour is also vulnerable to charges of gross hypocrisy and partisanship over a sensitive issue.

At the same time, if the proposal is now communicated better than it was on Monday, Mr English will enter the election campaign with his baby boomer comrades knowing that every last one of them will be able to retire on exactly the terms bequeathed to them by Helen Clark and John Key, and by Winston Peters with his free-ferry-trips-to-Waiheke SuperGoldCard scam. God forbid that any baby boomer would ever lose a single cent of a government entitlement.

God, I hate that word entitlements. It needs to be banned from the lexicon of government munificence.

Mr English can even hope for more subtle benefits. He has created for himself a chip to trade away in post-election negotiations with Mr Peters. At the same time Mr Peters, between now and then, also gets to grandstand as the great defender of superannuation and has the opportunity to scare frail and bewildered 80-somethings that somehow Mr English intends to target them. Being granted such an opportunity will create more gratitude in Mr Peters toward Mr English than toward Andrew Little for trying to steal his turf – and certainly more than for being appointed by Labour last week to Parliament’s intelligence oversight committee.

Winston can afford to hold firm. He is going to be the one holding all the aces after September 23.

Hooton goes on to promote Act’s chances, I disagree with him on that.

 

– NBR

 


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