Flexi-plan allows the PM 'wriggle room' for change.
Peter Dunne says he is confident his "Flexi-super" proposal can be advanced by any third-term National government without compromising John Key's pledge on superannuation. It would, says the United Future leader, help the Prime Minister to "get off his high horse" following his promise six years ago not to raise the age of entitlement. Any dismounting would certainly be in the country's best interests.
Mr Dunne has good reason, therefore, to make the adoption of Flexi-super a bottom line for his support for a National government after next month's election. Such assertiveness may be against his natural instincts, but Mr Key may just need such an imposition to change his ill-advised approach.
Flexi-super provides the Prime Minister with "wriggle room", says Mr Dunne. That is because the core age of entitlement would remain 65. But New Zealanders would be able to take up state superannuation between the ages of 60 and 70 with a varying scale of payments - less for earlier and higher for later. Several problems would be solved by this, not least the needs of those whose work has involved heavy physical activity. They would be able to retire early, while others would prefer to work longer. Many are already doing the latter, thanks to improved healthcare and increased life expectancy. Flexi-super would introduce a personal choice based on individual circumstance.
There would be some objections. One is that it would widen inequality in old age, with those retiring before 65 receiving the reduced rate for the rest of their life. Another is that it would not necessarily reduce the overall cost of superannuation to taxpayers, and might even increase it. But that would depend on the rates set by the government, as well as any carrots that may be offered. An incentive to work until 70 would, for example, save five years of superannuation costs and add income tax for the same period. This might outweigh the additional payment to them from 70. That money could be used to ensure the inequality for those who take up super at 60 is not too severe.