John Armstrong: Grey vote has the power

If National's reluctant u-turn on the Cullen fund was supposed to shunt superannuation off the agenda for the coming election, then someone forgot to tell Winston Peters.

While New Zealand First has always courted the grey vote, Peters is now going after it with an aggression that is clearly unsettling Labour, while putting National's lame excuse for an Opposition to shame.

Peters has already caused the Government considerable aggravation by repeatedly pointing out that on occasion the married couple rate for super has fallen below the floor of 65 per cent of the net average wage.

While this has become one of those "lies, damned lies and statistics" kinds of arguments, that floor was established by Labour in proud response to the Shipley government dropping it to 60 per cent. Though the breaches have been comparatively recent and relatively minimal, Labour's squirming suggests Peters has won the argument, at least in political terms.

In just over a fortnight, he will seek to hammer home that advantage when he outlines New Zealand First's superannuation policy at Grey Power's annual conference. But he has already dropped enough hints to suggest he will be writing most of Grey Power's wish-list into his party's manifesto.

New Zealand First is promising to raise the rate for married couples from 65 per cent of the average wage to 72.5 per cent - generosity that Labour estimates will come with a $740 million price tag in the first year and $1.3 billion within 10 years.

The cost factor means New Zealand First will stagger the increase, with Peters trying to strike a balance with an immediate jump to about 68 per cent, which would give married couples an extra $18 a week on a rough estimate.

He will play to pensioner anger over soaring electricity prices by promising to regulate line companies. Likewise, he will offer rebates to those over 65 hurting from local body rates rises.

As if all that were not enough, New Zealand First wants to see health spending hit 10 per cent of GDP, putting New Zealand on a par with European countries such as Germany and France.

Peters is niche-marketing with a vengeance. It is some niche. More than 80,000 New Zealanders rely on the state pension as their sole source of income. When it comes to additional income on top of the pension, a further 407,000 get by on less than $20,000 extra a year.

Rather than trying to appeal across-the-board, New Zealand First believes it is better to narrow its focus to distinct segments of voters, such as the less well-off elderly. It does not expect to get their every vote, but winning over just a third of those half-a-million superannuitants would be worth 8 per cent of the overall party vote.

Peters will be accused of vote-buying opportunism, but his timing is shrewd.

The Prime Minister - also addressing the Grey Power conference - filled the vacuum he left in the 1990s when he angered the elderly by going into coalition with National. She has been at pains to keep that constituency on side ever since.

But the mutually advantageous relationship between Labour and the elderly is now suffering the erosion of time. The Government thinks it is still doing enough. The elderly feel they have been left to struggle on fixed incomes, while everyone else enjoys boom times.

The current publicity splurge surrounding the Working for Families package will not escape pensioners' notice. There are no income top-ups for them. Instead, super has been going through the floor.

It is no surprise, then, that the Prime Minister's Grey Power speech looms large on her radar. She will stress Labour's record of stable government - thereby reminding her audience of Peters' failure on that score.

She will list Government help for senior citizens - such as cutting doctors' fees, increasing orthopaedic operations and the start made on removing asset-testing for those in long-term care.

She will flag more money for cataract operations. She may have other Budget-related announcements up her sleeve. Labour, too, is understood to be looking at a rates rebate initiative.

But she will hold out little hope of any increase in super beyond the annual inflation-related adjustments.

Along with other parties that adhere to the "65 at 65" maxim - married couples being paid 65 per cent of the average wage from the age of 65 - Labour does not want to get into a bidding war with New Zealand First.

With National having finally, but grudgingly, signed up to Michael Cullen's superannuation fund, Labour does not want that fragile consensus disturbed by parties offering voters ever higher super payments in the short-term that risk undermining the scheme's sustainability in the long term.

So far, other parties have agreed with Labour that the fight for the grey vote should be confined to alternative means of helping the elderly. For example, United Future is considering tax rebates on health insurance for those over 65, along with rebates for those installing security systems in their homes. Superannuants would benefit from the Greens' policy to make the first $8000 of income tax-free.

However, there are signs that this unspoken agreement is fraying. United Future is contemplating cutting out the married rate of super and putting everyone on the higher single rate. Jim Anderton's Progressives talk of "incremental" increases in super.

Now comes an even bigger threat to the "65 at 65" consensus. Grey Power may adopt a tactical election strategy, recommending that its 75,000 members give their party vote to a potential junior coalition partner, rather than Labour or National. This is seen as a far more effective way of ensuring the elderly exercise leverage as a voting bloc.

Being non-aligned, Grey Power will not be telling members to vote for a particular minor party, but New Zealand First is the one flashing the neon lights. Once again, Peters' timing is immaculate.

By remarkable coincidence, he will be at the conference on his 60th birthday. It is an image-merchant's dream - a baby-boomer politician personifying the political clout his generation will wield as it heads towards retirement.

Those who thought the Cullen fund would avert inter-generational conflict sparked by a greying population demanding ever bigger slices of the Budget cake might have to think again. The war may just have already begun.