John Key has ruled out a referendum on the pension age and says his refusal to budge on the issue is nothing to do with his promise to quit as prime minister if the age of eligibility is raised.
Pressure is growing on the National-led Government to raise Superannuation after the Financial Services Council warned the cost will ballon to 12 per cent of the national income by 2080, or $24 billion.
A Savings Survey by Horizon Research found almost 60 per cent believed New Zealand could not afford the scheme if the eligibility age remained at 65 and a separate 3 News-Reid Research poll released last night found 63 per cent thought the age should rise to 66 or 67 from 2020 or even earlier.
Many economists and the Government's support partner ACT say the age should rise, and fellow support partner United Future wants a flexible retirement age.
In 2008 Key said he'd ''rather resign as prime minister'' than change the age of eligibility.
This morning he said the Government had many other issues to deal with around growing the economy.
''So me coming out today and saying we are going to lift the pension from 2020 does absolutely nothing to the national accounts today or tomorrow or the next day or the next day,'' he told TV3's Firstline programme.
''Forget about any promises I've made, or otherwise, I wouldn't be raising it today.''
Concerns about the aging population or the increasing costs of Superannuation were not new.
''Yes, the cost goes up a bit but partly that's indexation. Our costs of the pension is relative to other countries still quite low.''
Modelling done by the Government showed it was still affordable, he said.
Asked if the Government would consider holding a referendum on the issue, Key said: ''No, not really.''
''We had an election on it in the last campaign. Labour went into the election wanting to raise the age of Super... the voters rejected that.''
Key said it was ''always possible'' he would reconsider his stance before the 2014 election but said it was not something the Government had discussed internally.
MOST KIWIS BACK RISE IN AGE
Most Kiwis are resigned to working past 65 – and most believe the pension age must rise, a survey reveals.
Almost half admit they are not planning for their retirement.
Prime Minister John Key tried to strangle the debate yesterday by claiming the cost of the state pension had fallen between 1990 and 2007. But he failed to point out that the age of entitlement rose from 60 to 65 in this period.
The Financial Services Council has warned that tax rates will blow out by almost a third if the pension age stays at 65. It says the cost will balloon to 12 per cent of the national income by 2080 – or $24 billion.
Its report has provoked a storm of reaction, with Opposition MPs calling for a debate on the affordablity of New Zealand Superannuation.
Almost 60 per cent of people questioned believe New Zealand cannot afford the scheme if the age eligibilty stays at 65.
A separate 3News Reid Research poll last night revealed 63 per cent believe the age should be pushed up to 66 or 67 from 2020 – or even earlier.
Mr Key has point-blank refused to move on the retirement age – staking his career on his commitment. More than half in the 3News poll of 1000 voters said he should break his 2008 promise.
Yesterday he attempted to bolster his argument by saying the cost of NZ Super fell from 14 per cent of government spending in 1990 to 10.9 per cent in 2007.
But the age of entitlement was lifted from 60 in 1992 over a nine-year phase-in that would have had a significant impact on costs.
Labour leader David Shearer wants cross-party talks and a "nationwide discussion."
"It's not good enough for John Key to say that he's worried about governing for today and somehow the future will look after itself. As prime minister, he has a responsibility to look after future generations too."
Coalition partner ACT also called on National to reconsider. Leader John Banks said that, by 2016, NZ Super would make up nearly 55 per cent of total benefits paid by the Government.
"New Zealand's demographics are changing quickly ... By 2050 there will only be 2.5 people working to support every one retiree ... That's a large financial burden to be placed on so few people."
Research conducted by the savings and investment lobby group FSC shows New Zealanders are underprepared for old age. The average expected retirement age for women is 67.1 and for men 68.7.
Most of those questioned thought they would live, on average, to 83.5 years. But those aged between 18 to 24 believed they will still be around until 85.8.
However, 45 per cent agreed they are "not really planning for their retirement".
Almost a third said they didn't know how much they needed – and just 10 per cent thought a government pension would be enough to live on.
FSC chief executive Peter Neilson said most Kiwis accepted a shift was needed – particularly younger generations.
"It's quite clear that a number of young people do not believe that NZ Super will continue on the same arrangement," he said.
"They are pretty certain that it won't be available either at the same time or the same rate it currently is and they are saying we probably have to do something about it."
- © Fairfax NZ News
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