Wasn’t it great to see the first leaders’ debate start with the savings policies of National and Labour (including KiwiSaver)? So often savings policy does not feature in such forums, which is disappointing given its importance to New Zealand’s future.
The Labour Party should also be applauded for its recently announced superannuation policy of gradually raising the age of eligibility for NZ Super to 67. This is sensible and consistent with recent hard hitting comments from the Retirement Commissioner about the need to address the superannuation and healthcare funding issue New Zealand faces from a rapidly aging population.
Labour’s NZ Super policy is in complete contrast to National’s “head in the sand” approach to this looming funding issue, which the latter seems to be doing for political rather than economic reasons. Labour has also linked KiwiSaver to NZ Super by keeping the age KiwiSaver funds become available at to 65. This potentially provides a bridge for savers between 65 and 67 for the period when KiwiSaver funds are paid out and NZ Super kicks in.
While it is great to get the savings debate a lot of air time the downside is that NZ Super and KiwiSaver risks becoming a political football. The last thing people need as they save for their retirement is where one of the major parties changes the NZ Super policy when they come into power and the other changes it back again when they eventually get back into government.
The situation cries out for a Superannuation Accord similar to the one signed back in 1993 as this takes away the potential for sound savings policies to become mixed up with policies that are being made for political point scoring reasons.
It is probably too much to hope for that both Labour and National can agree on a combined super and savings policy pre or post-election. This is a real pity as it would mean that current workers would have greater certainty on what their payments from NZ Super and KiwiSaver will be when they retire and so can plan for the future on that basis.