Dialogue: Hands off our super - we've earned it

By HENRY PERKINS*

When I read the first of Kate Belgrave's two articles giving her views on national superannuation, I did not think, "Silly bitch," as she admits others have called her, but I did not bother to reply.

Since then she has followed it up with another provocative attack on what she terms the greedy oldies in general and Greypower in particular, so a reply is now appropriate.

After all, as Dr Goebbels discovered, if you repeat your version often enough and loudly enough without opposition, people come to believe it is true.

Belgrave is entitled to her view that in 15 or 20 years there will be a much larger number of independently wealthy people drawing superannuation. However, she may be overestimating their impact on available funds.

Also, her comment that members of Greypower should be denied the vote until they come around to her way of thinking is both arrogant and offensive.

I am sure she would feel the same way if someone were to make a comment that her generation should not be allowed to vote until they show more concern for the less advantaged and give up their self-centred pursuit of pleasure, such as regular coffee mornings in Ponsonby or Parnell, speeding around the city streets in expensive sports cars, or going to all-night parties.

Belgrave's gripes are that there should not be universal superannuation or that, if there is, people with other incomes should not get it, and that wealthy pensioners own half of Tauranga and Waikanae.

To take first the question of universality, and why superannuitants "spit the dummy" when means-testing of superannuation is mentioned.

Imagine if, from the 1940s onward, people by law had to pay 1/6 in the pound on what they earned, not to the Government but to the AMP Society, who promised to pay them superannuation once they reached retirement age.

Then, having paid up for 40 years or more, they asked the AMP for what had been promised, only to be told, "Sorry, you've got quite a bit of alternative income, so we are not going to pay out. In any event, we've frittered away the money on other projects."

There would be an outcry and the AMP directors would be in jail for taking money under false pretences.

That is what the Labour and National Governments of 1985 and 1990 did - and got away with it. There was, though, an outcry which led to the formation of Greypower.

We said then, and continue to say, that those who had tax taken from them for superannuation have paid their premiums and are entitled to a payout as of right.

We were led to believe that those tax deductions were to provide for our own eventual superannuation, as would have been the case in a private fund. We did realise that if we died too soon, there would be no refund of premiums, which would go into the fund to provide for the survivors.

However, in the past couple of years it has been stated that we were, in fact, providing for those who were old while we were young.

Even if this is correct, it does not detract from my argument. We undertook - albeit compulsorily - that responsibility.

Now we are the elderly, it becomes the obligation of today's young. It is that obligation that Belgrave and many of her self-centred Generation X are so vociferously attempting to shirk.

Then there is the argument that retirees with considerable independent income should not get superannuation on top of this. In many cases during their working lives, such people would have paid taxes much higher than the average taxpayer.

If the superannuation component of that tax had been put into a separate account in their name, they could argue that having paid more, they should receive higher superannuation payouts than average, as would have happened under a private scheme. Most definitely, though, under no circumstances would they have had it taken away entirely.

How many independently wealthy people are also drawing national superannuation?

Super makes up more than 90 per cent of the total income for 37 per cent of men and 52 per cent of women aged 65 and over. Seventy-six per cent of men and 89 per cent of women's total income including super is no more than double the super amount. So the number of seriously wealthy superannuitants is nowhere near as great as Belgrave seems to believe.

Those that are in the highest wealth bracket will, of course, be paying the new top tax rate on the pension they do receive. Even in Howick and Pakuranga, I would be surprised if more than 1 per cent of Greypower's 2700 members will wind up having to pay top tax rates. At our meetings, late-model Mercedes, BMWs and Jaguars are conspicuous by their absence in the carpark.

Belgrave sounds a note of envy when she complains that the elderly own a good portion of Tauranga and Waikanae. What would she do? Have a law passed that retirees must go and live in Taihape or Eketahuna? Who then would be eligible for Tauranga or Waikanae?

People who have ended up there may have worked hard and gone without during earlier years so that they could retire in pleasant surroundings.

They may have previously lived in a part of Auckland which has seen massive increases in property values, and decided to sell and go where the pace of life is slower. Would Belgrave say they were not entitled to do that?

She should not fall into the trap of thinking that valuable properties mean the occupant has a high income.

In Bucklands Beach there are people on fixed incomes living in properties which have steeply escalated in value and whose rates are about $4000 a year.

That makes a big hole in their superannuation, and having supplementary income is a vital necessity.

Earlier, I mentioned that a few superannuitants will be paying the top tax rate. It may surprise some that all superannuitants continue to pay income tax - and GST.

Some of their taxes go towards education, including subsidising the cost of university education, some towards paying the unemployment benefit.

Are the elderly bludging off the young? Could it possibly be the other way round?

* Henry Perkins, a retired bank manager, is the president of the Howick-Pakuranga Greypower Association.