Superannuation: changes must be made, say economists

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Economists urge super changes

3News NZ

Shamubeel Eaqub

Shamubeel Eaqub

Prime Minister John Key says he won't raise the retirement age, but it's an issue that isn't going away with the cost of super expected to blow out to $12 billion by 2016.

NZIER chief economist Shamubeel Eaqub says virtually every economist is in agreement that something has to be done.

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Comments

13/06/2012 2:07:39 p.m.

Raj wrote:

I do not think this change would do any better. it definitely ease the problem for 2 yrs and then everything setteled down down to usual equation. May be leaving it for the people to decide at what age they prefer to retire and make some adjustment for the yrs they work to the society, might give another way to approach this problem

12/06/2012 11:36:36 p.m.

Andrew wrote:

Mike, you ought to give it more thought. Private savings or payments into private super schemes to ensure that one can retire comfortably at 65 are going to have the same net effect on disposable income as an increase in taxation. It would make more sense if politicians were to forget about superannuation altogether and focus on finding ways to raise the country’s economic performance and to achieve full employment.

12/06/2012 10:09:21 p.m.

alison wrote:

My goodness MIKE. If you are making a packet out of your job with say the likes of an acc chairman and then on top of your already saved mills, your private super etc do you really think you should be entitled to claim the pension? For goodness sakes. You cannot take it with you. What about leaving an entitlement to the lesser minnows that work equally hard at their jobs. Its called compassion.

12/06/2012 3:23:36 p.m.

Mike wrote:

Super needs changes as its not sustainable.

We have Shearer wanting joint party talks, and yet he is also the idiot who recently told us we should be lowering the age of eligibility for 'hard workers' which would be even less sustainable.

Raising taxation is not a solution as by itself just raising taxes wont work as eventually we could have 100% taxation and it still not cover future Super. We need to set a limit on how much NZ spends on super as % GDP, and adjust super to fit. It is supposed to be helpping one to live yet so many spend everything so they wont have any asset to obstruct their getting super.

We need a solution that doesn't just blindly put off the problem - like the raising taxation doesn't fix the problem.

Raising the age will lower the Super cost. When super was introduced the life expectancy was almost 20 years lower, so we should have seen the age for super rise almost 20 years, yet we have seen it rise only 5 - this is a mistake.

We also have people saying lets not pay Super to those with any money. What this means is if you want Super, spend all your money and claim poverty compared to those who had exactly the same incomes but managed to make savings. The people we should be incouraging are the savers, yet our system rewards the spenders and penalises the savers - the exact oppositte of what is needed. We need to do something to encourage saving vs spending and no political party will tackle this problem.

If your young, your being asked to save. Sounds good, but if you follow the advice you will be the first cut from getting super. If your going to save, plan on no super - this is obvious as the next step from both Labour/National.