Don’t believe the lies about the unaffordability of National Super

By   /   December 17, 2016  /   13 Comments

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Right-wing commentators and big business advocates want to see government spending on any welfare that goes to the people as of right slashed.


Scare stories are starting to reappear about the alleged unaffordability of national superannuation.

Right-wing commentators and big business advocates want to see government spending on any welfare that goes to the people as of right slashed.

It doesn’t matter that New Zealand’s scheme is actually one of the cheapest in the advanced capitalist countries in terms of net cost as a percentage of GDP and will remain so for the foreseeable future.

The resignation of the previous Prime Minister John Key has seen the attack dogs unleashed. He had sworn never to raise the age of eligibility. His replacement Bill English promptly abandoned that policy within days of his appointment.

One of the critics of current eligibility rules is the recently appointed Retirement Commissioner Diane Maxwell. She wants an increase in the age of eligibility to 67 and an increase in the residency requirement from 10 to 25 years. This may seem a bit surprising but she came from the banking and financial services sector. She had a senior role at the BNZ at the time it was found to have deliberately avoided taxes to the tune of $645 million dollars.

It is a bit rich for tax cheat to lecture us on affordability!

She claimed the number of people on national super would double over the next 30 years and net annual cost would triple from $11 billion to $36 billion in the next 20 years.

This is completely misleading. It is using devalued 2036 dollars against 2016 dollars. The real cost can be measured more accurately as a percentage of GDP.

The current net costs of national superannuation are about 4.2% of GDP. The average for the OECD group of countries is 9%. New Zealand’s costs will reach 5.8% in 2036 and 6.1% in 2050 and 6.7% by 2060. It is affordable and will remain affordable forever.

By 2060 New Zealanders will also be producing two to three times as much per person as we do currently if current average productivity improvements continue.

The problem we have is that the benefits of that productivity increase are being captured by the wealthy elite.

Max Rashbrooke , editor of Inequality: A New Zealand crisis, calculated that “In 1986, the top 10 per cent took home 26.5 per cent of New Zealand’s income. In 1999, it was 37.8 per cent and in 2004, it was 33.2 per cent.”

Big business just wants to cut any government expenditure that isn’t going to directly subsidise their profit making activities. This has led to a slashing of the number of people receiving a benefit as a percentage of the working age population from 13% to 8 % when unemployment only fell on average from 8 to 6%.

The bosses would like to achieve similar cost cutting from old age pensions but because it is a universal entitlement it has been harder to cut without provoking a political storm. We should continue to fight to protect national superannuation. It is effective. New Zealand has one of the lowest rates of old age poverty in the world. That is a good thing and worth defending.

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About the author

Mike Treen

National Director of Unite Union


  1. Afewknowthetruth says:

    Unfortunately (or fortunately, depending on your perspective), the entire global financial-economic system is doomed to collapse long before 2030, and very likely to collapse quite a while before 2025, since the entire system is predicated on burning around 90 million barrels of oil a day -every day of the year, forever. Indeed, to function ‘properly’ the system has to burn more oil every year to provide the economic growth that is necessary to keep the Ponzi financial system going. All of which is clearly mathematically impossible and ecologically impossible.

    Whether it will be global depletion of liquid fuel supplies or the effects of burning oil that will bring the system down is still not entirely clear. The next 3 years will almost certainly clarify both matters.

    The game politicians and the media are playing at the moment is to continuously lie to the masses and convince them the financial-economic-political system has a long term future….which is the same game they have been playing since it became abundantly clear around a decade ago that the system has no long-term future.

    By any metric in the REAL WORLD the situation is terminal, the extraordinarily low ice cover at both ends of the planet, as the physical world responds to record-high atmospheric CO2, being perhaps the most critical.

    It never ceases to amaze that people STILL think in terms of the financial system in isolation of everything else that supports it.

    There is one thing we can be sure about: the lies politicians and the mainstream media tell over the next few years will be in proportion to the increasing severity of the predicament.

    • Iain Mclean says:


      Good God man,enough,!

      Enough of the meaningless graphs.!

      I mean a span of 10 months means you no nothing about them. Alarmism.

      I gave you a search list for global warming from Global Research a while back.
      Now take the time to read it.

      It is nothing more than a Globalist con/ruse to control Nation States and the
      citizens within them. aka Agenda 21 that is now 30,

      The historical record shows when CO2 was high,over DOUBLE of today, life
      exploded and flourished.

      Real scientist’s know that even if the world was warming(which it is NOT) that
      would be a GOOD thing for life.!!

      Sea water levels rise and fall on a cyclical basis naturally. Same as the ice at
      the poles. The Sun is in its minimum cycle.

      There is a court case in Canada,that has passed the deposition stage of hearings, to stop the geoengineering taking place that is now acknowledged to be the cause of any extremity in the weather. ie Constant cloud cover that raises
      temperature underneath.
      Likely to be the cause of the abnormal mould/fungus that is killing the Kauri trees in Nothland with the high humidity.

      I will stop there. Please take the time to research.


      • Climate change denial now, Iain? Despite all the data now in? With the arctic circle ice-caps melting, you’re still not seeing the impact that greenhouse gas emissions is having on our planet?

        Your rhetoric that “Real scientist’s know that even if the world was warming(which it is NOT) that would be a GOOD thing for life.!!” is not only meaningless, but also deceptive. Who are the “real scientists” you refer to? The ones bought and paid by fossil fuel corporations? Feel free to list their names – they can usually be traced back to be funded by those very same corporations.

        “The historical record shows when CO2 was high,over DOUBLE of today, life exploded and flourished” – and you can kiss goodbye to nearly every coastal city, town, village, and the deaths of millions of people. The current CO2 level is around 400 parts per million (PPM). Double that to 800 ppm and the planets ocean levels were 100 feet higher than today (

        What you’re advocating is not just destruction on a massive scale but the dislocation of entire populations, and the extinction of thousand of species of plant and animal life.

        I really wonder at where you’re coming when you spout your rubbish.

        • Iain Mclean says:


          It is you spouting the rubbish,Frank.

          Climate Change Denier. Have you stopped to think about what that
          really means? Just control the language ,aye,and attach emotions
          to them.
          By that I mean not just you but TPTB that give you these Dominant
          Social Themes for the defence of the Status Quo.

          Climate has changed since the Earth was born. Nobody can deny
          that fact. It’s a nonsence.!!

          And not by gravity. I will deal with your reply about that tomorrow.

          The speed at which you appear, Frank, on these ‘hot button subjects,I think is quite revealing.

          Why are we not calling it Global Warming anymore?
          Why the need to change the title?

          We have been here before,Frank,remember? Over a year ago.
          I provided you the science and the top scientist,you go to Wikipedia
          and spout the Establishment narrative and continual repeat of the
          very organizations that were charged with the manipulation and
          fraudulent data, The email scandal showing the isolation of
          scientists research that does not fit THEIR narrative. 2009/10?

          And then when caught red handed,TPTB Double Down.

          I have done extensive research on this matter,Frank.
          It relates to the MSM and their Fake News and Pseudo-Science.

          And when I know my science is sound,it is my duty to share it with
          others so they ‘Won’t Get Fooled Again.’ Freedom of speech.

          I do not think you’re silly Frank,but when you receive the info to
          research it seems that you don’t bother to read it and continue on
          just defending the Status Quo.

          There is a name for that and it is called Gatekeeping.

          Take the time to research the links above and not the
          Establishment Propaganda. Its the MSM that spouts Fake News.


  2. Andrew says:

    Let’s put the numbers into perspective:

    Last time I checked, the estimated underfunding of NZ Super was about 1.5 billion dollars, depending how you do the sums.

    That’s a similar figure to the bailout of South Canterbury Finance. It’s a small fraction of the cost of the Christchurch earthquake and about a quarter of the first phase of the Auckland rail loop. It’s about 50% more than the transmission gully project. By comparison the overhang from student loans is about 6 billion.

    So NZ Super is perfectly affordable, given the will to fund it.

    Given that only about 6% of NZers have the funds to manage without NZ super, it would seem to be practically essential and anyone proposing to cancel it is therefore un-electable.

    Those proposing increasing the retirement age come from the left, the right and the middle but most are either super wealthy (eg Gareth Morgan) or young and working in sedentary jobs.

    These people don’t know what it’s like to be 65 years old and still doing a manual job. Although the miracles of modern science have extended our lives on average by about ten years, most of this extension is a mirage of dementia, incontinence and incapacity.

    Talk to manual workers. The chippies, plumbers, road workers, farmers and motor mechanics. They’ll tell you that by 60 you’re living a life of back pain, RSI and arthritis from decades of winters working on the tools. There is simply NO WAY they can viably work longer.

    NZ Super is here to stay.

  3. lloyd jordan says:

    just another reason why we should have a livable UBI

  4. Takere says:

    I would trust M Rashbums numbers Mike. He think the total amount of Welfare is attributed to Beneficiaries!
    Asset testing!

  5. saveNZ says:

    Totally agree. It’s also a bit rich to claim that we can’t afford super when National are also bringing in large numbers of aged migrant parents.

    It should not be a given that new migrants can bring in their parents for full benefits. There is nothing stopping the migrant parents just visiting their kids on holidays here and maybe a new visa category for 6 months stays, without giving more elderly people benefits to welfare here.

    We can’t even look after our own needy people in NZ adequately, why are we importing in more?

    The other issue is that many elderly people are working longer, so as well as migration, massive student and tourist work visas, there is a huge burden on younger Kiwis who struggle to get their first job as well as being slow to be promoted up the job ladder.

    That is leading to young Kiwis fulfilling the legacy the National government has set for them as ‘ being pretty hopeless’.

    So all in all it is turning into a dangerous legacy for the next generation being cut out from not just owning a house which is talked about Ad nauseam, but also having a job.

    As for the property Ad nauseam talk, I am beginning to think it is a MSM diversion to more pressing issues.. on who is not paying taxes such as banks and big business, widening the tax issues to transaction taxes and robin hood taxes and a deflection away from immigration and wage issues under neoliberalism to ‘how can we tax home owners more and do they support National”.

    Widen the discussion – practically every NZ article or economist has the only suggested solution as taxing property owners more or crashing prices, as a favourite solution to everything.

    The UK has capital gains, stamp duty, inheritance tax, TV taxes, 17.5 VAT, massive population, migration and every tax you can think of to hit the average Brit, but they are having major issues with their welfare system.

    Think smarter people! Like Charter schools, burdening more taxes on local people to somehow target others indirectly – is not working, the inequality gap is widening.

  6. saveNZ says:

    In addition in NZ there is too much stick and not enough carrot.

    If the government want people to save more, and have more cash in the bank, then in the UK they had something called an ISA which was an enormous success to encourage saving.

    In short you get £15,240 a year to save tax free as an individual and you can withdraw the money if you need to any time but you lose the tax free status once you do this.

    One big issue now is that people have insecure work and many people are incentivised to be highly indebted with property and pay off their mortgage first before anything else or they feel demoralised when their hard earned savings are taxed so highly. The issue then becomes that a large percentage in NZ have very little cash reserves in savings they can call on when things go wrong.

    Kiwisaver was a start, but it is for the long term. There is not a lot to encourage people to save in the short term for short term emergencies.

    Although an ISA does not help the poorest in NZ, I really feel that to win Labour and Greens need to stop sneering at the middle and start thinking about a carrot approach to incentivising their ability to divest from property and have reserves to call upon rather than using the stick approach.

    After all National use a stick approach to punish the beneficiaries all the time, does it make them get a job?

    Time to take away the carrots from corporate welfare and start taxing small amounts on turnover as a minimum tax rate for companies.

  7. John W says:

    Giving tax cuts to transnational corporates and the major tax dodgers, then cutting contributions to the Cullen fund designed to smooth the bumps of future payouts for the small period of “baby boomer” ageing ( this will include many immigrants now welcomed to increase consumerism while we subsidise them all the way through till death), is utter hypocrisy.

    The Currie Commission gave our future old age provisions by way of a pensions, a clean bill of health but that conclusion was retracted from the media shortly after the first publication. Nothing has changes only the hype and greed of the controlling wealthy sector and investor state.

    Both NAZCT and Labour have lied profusely about this issue.

    The investor state would no doubt prefer a privately run contribution scheme where money captured from the public could be gambled with and disposed of at will. In the USA 2008 saw many pension schemes collapse leaving life long contributors penniless. Kiwisaver is a similar scheme with state “enforcement”. Getting rid of state backing seems to be the agenda.

    A strong state owned pension scheme is the security which is vital link to population control, family size and many other socio – demographic consequences of having a strong degree of equality and fairness / justice.

    The jobs are not there at present to employ more elderly and job numbers will continue to decline as mechanisation expands to reduce wage payments.

    The unemployment benefit has replaced the former pension for many as the age of pension eligibility has been ramped up. Those elderly are just forced to live on less and suffer increased stress.

    The failing deliberately underfunded health system, now makes many services almost impossible to access and so private funding becomes the load of many aged on a unemployment benefit, at a time of life when health issues are more likely to arise.

    Conversely the private medical schemes are expanding and doing well supported by long public waiting lists. Also DHBs having to divert tax dollar to employ private “providers” as DHBs have insufficient funding to build state owned health infrastructure.

    A simple operation such a cataract procedure is near impossible to get through the public system and costs many thousand with private “providers” who give little or no back up if it goes wrong. Fred Hollows did these ops for a few cents a time.

    A Kiwis long span of tax contribution since first employment, is gobbled up with massive tax reductions for the rich while the dependent poor and elderly have their security and health threatened.

    Job training has almost disappeared from state services and tertiary education yet we import labour on the grounds of needing skills.

    User pay education and loan schemes guarantees a fall in educational achievement by young Kiwis and our drop out numbers are increasing.

    Tertiary education funding is effectively cut, and now meeting budgets is dependent on recruiting over seas fee paying student many of whom will gain residency with all the negative consequences we are seeing unroll.

    We need to lower our pension age and provide more engagement with state run social services, training schemes and adjust the tax rate accordingly.

  8. Vamptonius says:

    All we need do, is stop using these fictional tokens and everyone can have anything they need, forever.

  9. Iain Mclean says:


    A good analysis again.

    Your figures show there is no need to cut anything as our scheme is in good shape.

    The part that angers me is the rhetoric about the ‘baby boomer’ swell in numbers.

    Governments have known about the bubble for 50yrs.!!

    The reason given by Helen to start the NZ Super Fund (Cullen) was to PLAN
    for this.
    Any Gvt should have done so.
    But when Labour finally did so,albeit at a late stage,what does Key do as soon
    as he got to govern? Cancel the whole thing.!

    Have the payments restarted?
    NO. Instead we BORROW for tax cuts.!!

    TPTB do not want ANY country saving and funding for itself.!! The Bastards.

    Time to change this.