Pressure mounting on retirement age

20:18, Jun 12 2012

Politics can be a fluid business.

Promises and statements made on one particular day can well be modified in future years, particularly if circumstances change - it's the nature of the business.

In the campaign leading up to the 2008 election, John Key made the bold statement that he would rather resign than increase the superannuation entitlement age from 65.

It was well-received by the electorate, and it is a matter of history that he went on to become Prime Minister. Since then, Mr Key has refused to budge from that stance. It was a position he reiterated during the 2011 election campaign, especially as Labour was disarmingly honest and said it would raise the age of entitlement to 68. It was a policy Labour knew would make it unpopular with many of the baby boomers who stood to lose the most, but it defended the policy on the simple truism that it was the right thing to do. It was a stance that was variously described as noble and naive and all points in between.

With then leader Phil Goff an unconvincing salesman of the policy, it was no surprise that the electorate rejected Labour and went with the National Government's unconditional, unqualified message that there would be no compromise. Obviously there were many other factors in the campaigns, but Mr Key's resolute refusal to budge on the issue would have had some appeal to the many voters approaching retirement.

But if a week is a long time in politics, then the six months since the election have been an eternity for Mr Key's Government. The honeymoon of the first term must be a distant memory as it increasingly becomes embroiled in contentious issues. The embarrassing flip-flop on the school classroom size debacle will no doubt remain a moment to forget for some time. Even now, Mr Key doggedly defends the policy, and will only admit to errors in selling it.

Is that "doggedness" morphing into obstinacy and now becoming a handicap? In the face of overwhelming poll support for putting back the super entitlement age a year or two even, if not to 68, Mr Key remains defiant. This week the Financial Services Council warned the cost of superannuation will balloon to 12 per cent of the national income by 2080, or $24 billion.

Add to that the increasingly pointed public comments from retirement commissioner Diana Crossan that the country can no longer afford the comparative luxury of supporting those retiring at 65 and an unlikely public pressure is beginning to build on Mr Key.

In short, he seems to have two choices. Either increase taxes or increase the age of entitlement. At this stage, the prime minister is refusing to consider those options, with his only alternative being one of an ostrich-like penchant for covering his eyes so he cannot see what is self- evident to everyone else.


Taranaki Daily News