Thursday, October 27, 2011

Dancing on the third rail

Like a capital gains tax, superannuation has been regarded as a "third rail" of New Zealand politics. John Key has famously pledged to resign rather than raise the retirement age from 65. So naturally, Labour is now dancing all over it, promising to bite the bullet and raise the retirement age to 67 to balance the books.

I'm of two minds about this. Yes, we live longer now, and stay healthy for more of those years, so a small raise doesn't seem to hurt that much. Life expectancies have increased by five to seven years since 1985, so is it really so harsh that we'll be expected to work for another two? Treasury has told us that the current system is unaffordable in the long-term (prompting the creation of the Cullen Fund), and the Retirement Commissioner has recommended a gradual rise to keep the system sustainable.

And against that, it doesn't help that the primary advocates of a higher retirement age are either transparently selfish rich pricks or crazed ideologues wanting to loot tax cuts for themselves and their rich mates by slashing social services. Or that all the analysis ignores the most obvious option to fund superannuation: higher taxes. Or that the proposed solutions are all about further entrenching the intergenerational inequities which began in the 1980's and have continued ever since. Then of course there's the fact that we have significant ethnic disparities in life expectancy, with an overall gap of nine years between Maori and Pakeha. The Maori male life expectancy in 2005 - 2007 was just 70 years. In that context, raising the retirement age will impact disproportionately on Maori and effectively rob them of a benefit they pay their taxes to receive.

And then at the end of it, I come back to a simple thought: our retirement system may be generous, but isn't protecting generous social services the sort of thing a Labour Party is supposed to do? If they're willing to give this away, say to young kiwis "you will have a worse life than your parents because we fecklessly looted the state for them and are too chickenshit to tell them to pay their bills", then what fucking good are they? If this is what Labour stands for now, then good riddance to them.