For the past twenty years, the right has plotted to raise the retirement age, supposedly because preventing old people from starving to death is "unsustainable". Of course, it would also let them deliver an enormous tax cut to their cronies, which tells us that its financial sustainability is simply a matter of priorities, and that theirs are focused solely on the rich rather than the 99% of New Zealanders who need this. But the good news is that the Retirement Commissioner - who had previously supported such a raise, on precisely those specious grounds - has changed their mind. And the reasons why are illuminating:
In the commission's latest three-yearly Review of Retirement Income Policies, [acting retirement commissioner Peter] Cordtz said new Treasury projections showed that NZ Super in its current form was sustainable for at least the next 30 years – and raising the age could do more harm than good.
[...]
He said retirees of the future would approach the end of their working lives in a worse financial state than current retirees because of declining rates of home ownership, and changes in employment and income patterns.
Rising levels of debt and the changing nature of work made it harder for people to save, he said. "All these things show that tomorrow's retirees are going to be in much worse shape and will require more help."
The review noted a downward trend in home ownership.
The proportion of people aged over 65 who own a home without a mortgage has dropped from 83 per cent in the mid-1990s to 72 per cent.
And pretty obviously, this is only going to get worse as time goes on. So, the Boomer's property bubble - really a massive wealth transfer from young to old - has basicly meant we have to keep superannuation as it is. In fact, it'll probably mean having to raise payments, since current levels assume that people own their own home and so aren't paying rent or a mortgage every week.
In the meantime, "sustainable for 30 years" means that there is plenty of time to raise taxes to pay for it. And hopefully over that time they can do something to fix the housing crisis as well.
