RT @JoshBBornstein: 65 year study confirms my research: Tax cuts don't lead to economic growth. Ping @Nick_Xenophon , @BCAcomau https://t.…
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RT @attn: .@Schwarzenegger has a blunt message for Nazis. https://t.co/HAbnejahtl
18/08/2017 9:38 PM
RT @PositiveMoneyUK: Make Monetary Policy Fair: It's time to explore alternatives to 'conventional' QE. https://t.co/m6CFVojm7w #QEforPeopl…
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@deirdrekent To be expected when income is taxed and capital gain not...
16/08/2017 9:22 PM
@bernardchickey @YourHomeLoanNZ Add ring fencing loses / deal to negative gearing and we might see some balance develop in the economy.
16/08/2017 7:36 PM
@bernardchickey Or take the job and do the right thing anyway - the RBNZ is "independent" after all...
16/08/2017 7:34 PM
@bernardchickey Not take the job because you would know you would be on a hiding to nothing. The link between earn… https://t.co/nxPRuAaT6t
16/08/2017 7:31 PM
RT @theyearofelan: Sure, the cancer was aggressive. But the chemotherapy was also very aggressive. There was aggression on both sides
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@bernardchickey DTI+LVR+OCR all needed for financial stability & inflation.RBNZ can then push back on dumb policy f… https://t.co/CqXISZUHGq
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@SelwynPellett Farming capital gains makes it hard to pay current expenses hence the need to externalise costs. Th… https://t.co/J1yevZAHft
14/08/2017 5:46 PM
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6
AUG 12

Retirement age needs to be dealt with




The retirement entitlement has come up again with 88 percent of respondents to the Herald’s Mood of the Boardroom survey saying the retirement age should be raised.

Unfortunately when the response was put to Bill English he reaffirmed that the Government would not change the age. The argument was essentially because John Key said we wouldn’t – not the best economic justification.



This chart from Treasury’s Briefing to the Incoming Minister after the last election shows how demographic changes will impact our ability to pay superannuation entitlements over the next 50 years.

I recently attended a lecture from Don Brash where he presented figures showing that our government debt is set to blow out by 2050 if current spending commitments are maintained.

His comments are worth a look:
http://www.realeconomy.co.nz/files/WHAT%20IF%20RECENT%20ECONOMIC%20TREND%20WERE%20TO%20CONTINUE.pdf

The superannuation commitments are the largest part of these rising debt levels.
There are a number of approaches to this problem:

1. Lifting the age of entitlement and indexing the age to life expectancy.
2. A higher pension is paid if the retiree works past the entitlement age, as proposed by Peter Dunne.

Restoring growth to the economy is going to require some fundamental changes in economic policy settings.

Creating sacred cows is not a way to get real change happening.
 


tags: superannuation, entitlement age, treasury, government debt
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