John Armstrong: Waiting for parrot to make right squawk

Finance Minister Bill English. Photo / Mark Mitchell

The panel of experts assembled by Bill English to come up with ways of lifting the country's appalling savings record is a bit like a caged parrot.

Chaired by Kerry McDonald, the lateral thinking, one-time chairman of Comalco, and comprising leading experts in savings policy, the Savings Working Group's plumage is so well-preened for the job in hand it should really have licence to fly where it likes and recommend what it thinks best.

It would certainly deliver correspondingly high-level analysis and recommendations were it allowed to operate in the the manner in which other advisory groups on the tax system and welfare reform have been free to do.

The proscribed nature of its terms of reference carry the strong suspicion, however, that they have been crafted in such a way as to lead the savings working group to the inescapable conclusion that KiwiSaver be made compulsory.

Otherwise what is the point of the whole exercise. Just tinkering with settings will not produce the kind of savings to kick-start investment while building the retirement nest-egg to pay for the pensions of an ageing population.

If this is the game, then National deserves credit for displaying the political gumption to start tackling the huge fiscal migraine looming on the horizon. It deserves credit even if the way it is going about doing this is somewhat surreptitious.

The experience of the last couple of decades of political debate dictate it clip the working group's wings by instructing it to stay well away from the state-funded New Zealand superannuation scheme.

Having plucked up the courage to stick its toe in the waters of compulsory super - even if very much at the arm's length of an advisory group - National is hell-bent on keeping any debate quarantined from national super to which the party has affixed a bottom-line promise not to change.

That, of course, looks somewhat ludicrous. But such are the difficulties in getting an honest debate about super that the ridiculous is sometimes necessary.

Indeed, such dishonest short-term politics may be justified if the long-term gain is the preservation of those entitlements by other means such as KiwiSaver.

For no one in their right mind seriously believes those entitlements can survive at present levels funded solely by tax revenue given future fiscal pressures.

With the working group scheduled to report its findings to the Government around the start of election year, however, the last thing National wants is something operating under its aegis speculating on the longevity of present national super entitlements.

What National seems to want is something with the air of independence siding with the notion of turning KiwiSaver from a voluntary to a compulsory scheme.

The Government can then pick up the idea, drop it or leave things hanging and pick it up again after the election - all depending on the public's reaction.

With half the workforce already signed up to KiwiSaver - plus likely exemptions for those signed up to equivalent private schemes - the political risks may not be as huge as may be assumed.

In the meantime, it is a matter of waiting until the parrot makes the right squawks.