MUST READ: Don’t believe the lies about the unaffordability of National Super

By   /   March 8, 2017  /   18 Comments

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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%.

2 part time feminists consider early retirement 

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

18 Comments

  1. Mike the Lefty says:

    The people who claim how unaffordable it is are usually the ones claiming as much as they can get now, while continuing to work, property speculate and live the high life.
    I wonder if they would consider setting an example by forgoing their super in the interests of the country?
    Yeah right.

  2. Michal says:

    Yes the sad thing is that all the people on the street who they interviewed on RNZ said ‘well we can’t afford to continue paying this to everyone at 65’. You say things often enough we all fall into line. I wonder if any of them think, well if we taxed people properly – and of course big business – we will always be able to afford it. But then they are much more interested in chasing solo parents who the general public have been led to believe are all screwing the system.

    I think one txtr said this is about moving to privitisation of the super system.

  3. Michelle says:

    don’t believe anything the gnats say as they are compulsive liars they also believe their own spin

  4. Sam Sam says:

    And it’s not like machines are making the job easier, the scum bags are just paying less so you work harder. Progress! Amazing!

  5. Tamati Tautuhi says:

    Pity National abandoned contributions to the Cullen Fund.

    However paid homage to their supporters by giving tax cuts to the wealthy and then slammed the poor with a 2.5% gst increase, that was actually cruel as the lower socio economic sectors spend 100% of their wages etc on consumer goods where as the wealthy had additional disposable funds to invest in equities, housing or recreational activities?

  6. saveNZ says:

    How bout we look at a UBI for all and create NZ as one of the lowest rates of poverty in the world!

  7. grumpystilskin says:

    “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.”

    Maybe our GDP is expected to tank in the near future?
    Sometimes you have to listen to what’s not being said on an issue, it’s not like our current govt has a good grasp on the truth.

  8. countryboy says:

    “Is it not a curious fact that in a world steeped in irrational hatreds which threaten civilization itself, men and women – old and young – detach themselves wholly or partly from the angry current of daily life to devote themselves to the cultivation of beauty, to the extension of knowledge, to the cure of disease, to the amelioration of suffering, just as though fanatics were not simultaneously engaged in spreading pain, ugliness, and suffering?”

    Abraham Flexner, 1939

    Ergo. Fuck little billy and big bennett.
    Tiny flies on the excrement they themselves spread.

  9. WILD KATIPO says:

    I like it.

    Don’t you ever stop.

    Particularly with things like this :

    —————————————–

    ” 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! ”

    ——————————————

    This is the sort of scum we are dealing with when we deal with neo liberals…so lets have a few more lies from the deceitful curr…

    How about this one :

    ”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.”

    ——————————————

    Yep – if it reeks like a neo liberal , lies like a neo liberal and steals like a neo liberal , then it is a ….

    Neo liberalism,… only works well when they can steal other peoples money and rape the commons wealth.

    And is the most cancerous ideological threat to any modern , advancing society in this part of the 21st century A . D.

    Its time we kicked these scum back into the gutter from whence they came. And we can start by making sure we strip Bill English and his National party of the party vote this coming September general elections.

    Do it for your children’s sake’s.

    • Tamati Tautuhi says:

      If it smells like a neoliberal it probably is a neoliberal?

      • OncewasTim says:

        Ain’t that the truth. Often it’s agenda is dressed up in such ‘nice people’ drag too.
        ….but, but, but it’s just such a changing world Tamati. You need to get with the programme! (/sarc)

        It’s changed so much that people’s basic requirements (such as food, shelter, water and security) are no longer relevant – let alone health and edjiskayshun).

    • Michal says:

      ‘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.’

      And the BNZ settled out of court and paid a small proportion of what they owed. It is pathetic.

      Now if they were a solo parent……

  10. OncewasTim says:

    If there’s one thing I learnt in the late ’80s, and 90’s whilst working in the banking sector (or perhaps I should say – one of my ‘learnings’ from that era), was to never trust a banking wanker: the do as I say, not as I do; the masters of spin and bullshit that was to creep into the political sphere; the masters of the Universe; the wannabe Nik Leesons till it all goes tits up; and even back then – how their bullshit and spin was creeping into the media (let’s cross now to Max Headroom from Craig’s Investment Partners for some independent opinion).
    If its Kemrin Begree, or Tone Lexender or whoever the hell the others are, I was in a position (along with others) to actually fact check their prognostations and predictions. We concluded at the time that a bloddy dart board was more accurate.
    (It was, at a time, when a lot was happening: for example the old historic MLC building was being demolished – gargoyles and all – in the name of “corporate prestige”; when the BNZ’s own ‘Branch 900’ saw plagiarists at large; when ‘dealing rooms’ became all the rage; and so much more. Now these people have the cheek to lecture us! Dianne Maxwell ffs! I put as much credibility in her – and she’s SUCH a nice person – as I do in a 2,000 rupee note photocopied across the border)

  11. Tamati Tautuhi says:

    Unfortunately these silky tongued Bankers and MSM appear to be running our lives these days and lecturing us how we should live meanwhile gutting the country of its State Assets and running the country into the ground for the benefit of the Global Elite, the Corporates and offshore Banking Entities?

  12. Dave Brown says:

    This is a phony debate.The workers produce all the value. Increasing productivity results from labour productivity, producing more in less labour time.

    In Marxist terms this is the same as increasing the rate of labour exploitation, or (s/v) where (v) is the value of the wage and (s) is surplus value produced in excess of the wage and then appropriated by capital as profit.

    So as the rate of exploitation rises, the wage falls in relation to profits. This shows up on the statistics as a growing gap between rich and poor which Piketty ponces on about, pissing on Marx all the time.

    Now as the rich hoard more wealth than ever before because they are exploiting workers more than ever before, they turn around and demand that workers work longer, harder and die before they can enjoy a decent retirement.

    In other words more exploitation on top of more exploitation.

    A phoney argument full of bullshit.

    The only way to stop this rising rate of exploitation impoverishing workers to organise and take back the accumulated wealth expropriated from the surplus value produced over generations.

    It can be attempted by taxing the rich but that only gives the bastards time to hide it or do a bunk or set their mercenaries on us. That’s why to get that wealth back we have to expropriate it, nationalise, or socialise it under workers control.

    When that happens, production will be for need and not profit, the time we need to work is cut back to say 20 hours a week, there is no employment because we share all the work among those who want to work, and wages are paid at a rate set by what we need regardless of our ability.

    Retirement becomes a non-issue as we choose if and when we want to work.

    The only reason that we are debating retirement age and pensions is because the bastards have fooled us into thinking like they do, that workers are drones and we have to thank bosses for allowing us to be exploited by them and die on poverty wages.

    Wake up, think and organise to take our wealth back!

    • WILD KATIPO says:

      ‘That’s why to get that wealth back we have to expropriate it, nationalise, or socialise it under workers control.’

      Yeah I’m happy with that – after all, … these neo liberal scum stole our SOE’s and sold them off to foreign corporate’s at fire sale prices from 1984 onward’s.

      And their still trying it on 33 years later.

      The difference was – we were a SOCIAL DEMOCRACY pre 1984 with a KEYNESIAN based economy.

      NOT a neo liberal one.

      So yes , any re-nationalizing it would simply be returning wealth that was STOLEN from the commons wealth in the first place.

      I could hear the screams and rage from here.

      Ideally , a follow up of public prosecutions and criminal convictions would follow such re nationalization as well.

      Ideally.

      I can imagine the rage of the corporate’s and the anguish of the bankers as it was carried out. I would be quite satisfied to see 2 full years at least of extraditions and convictions of those formerly involved.

      Similar to the sort of treatment they have tried on Mr Kim Dotcom – yet without the ILLEGALITY and ABUSE OF STATE POWERS under the auspices of a foreign power, of course… but extraditions and criminal convictions none the less.

      Done properly and without the lies and illegality that plagues these neo liberal manipulators in the Dotcom case , for instance.

      In other words… done properly and with real justice at its core. Not simply the rich perverting justice for their own ends. Like they’ve always done.

      In doing so, a message would be sent out loud and very , very clearly. And that message would be,… you can play your games as much as you want elsewhere … but if you step foot in this country and expect to carry on like that… you will…. be getting the short , sharp shrift.

      And the first port of call is to reintroduce, and reeducate the populace born after 1984 ,… of just what social democracy and Keynesian economics actually are and how it works.

      Do that , and you will see the evaporation of many of the new social ills that are but a symptom of neo liberalism start to disappear within 2- 3 years.

  13. Mike in Auckland says:

    “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.”

    Thanks for pointing this out, Mike Treen.

    Indeed, on a percentage of GDP, NZ Super is low compared to very many comparable countries. That is also why we have a fair few elderly live in poverty. Not all have managed to climb the property ladder, I have seen a many elderly spend their remaining days in crappy rest homes and the likes.

    The Super paid here is barely going to pay the high market rents for many.

    It is the same with “welfare” spending. They go on, the government, about this being “one of the best welfare systems in the world”, here. Compared to the welfare available in most developed European countries, except perhaps a few East European ones and Greece, NZ benefits are damned low, and people depend on top up allowances and supplements, without which they would never survive.

    And so much is means tested, and income tested, to end in welfare in NZ is a dead end street that lands you in serious poverty, ill health and so forth.

    But then they come with the BS propaganda that work in itself will “set you free”. Remember the welfare reform propaganda from 2012/13.

    https://nzsocialjusticeblog2013.wordpress.com/2016/08/16/senior-scientist-and-legal-experts-discredit-evidence-used-by-msd-and-dr-bratt-when-claiming-the-health-benefits-of-work/

    ‚In the expectation of recovery’, Faulkner, Centre for Welfare Reform, Scrib
    https://www.scribd.com/doc/308613502/In-the-Expectation-of-Recovery
    (criticism of biopsychosocial model, Aylward et al)

    https://nzsocialjusticeblog2013.wordpress.com/2015/08/09/msd-and-dr-david-bratt-present-misleading-evidence-claiming-worklessness-causes-poor-health/

    https://nzsocialjusticeblog2013.files.wordpress.com/2016/09/msd-dr-bratt-present-misleading-evidence-on-worklessness-and-health-publ-post-19-09-16.pdf

    The propaganda has been incessantly deteriorating and corrupting the thinking of the majority of the populace, hence most are either confused, indifferent or now even “convinced” of the fake evidence they are presented. Group thinking mechanism has taken over, and the alternative facts rule, while the truth is nowhere to be found now, unless people spend great efforts to do some serious research.



Authorised by Martyn Bradbury, The Editor, TheDailyBlog, 5 Victoria St East/Queen St, CBD, Auckland, New Zealand.