By 2016 the cost of super is projected to hit over $12 billion while, if the current trend continues, we will likely see the cost over $14 billion by 2020.
The number of New Zealanders aged over 65 is projected to increase by over 200,000 between 2011 and 2021.
And that rising cost is not at all surprising: the first baby boomers are starting to hit 65 and will continue to do so until around 2031; additionally the life expectancy for New Zealanders, and indeed developed nations in general, is rising significantly. This means the amount of people we are having to provide superannuation to is on the ascent.
And, to be clear, this ascent is not matched in the slightest by our working age population. The ratio of elderly citizens (65 and over) to working age citizens (15-64-year-olds) in 2009 was one to five. By 2024, this will be one to every 2.5. Clearly, this is an unsustainable trend. For me it is a particular worry as, while it is not generally the topic of conversation at school break times, it will place a massive burden on the rest of my generation as we move into the workforce.
It will be our tax rates that will be hiked in order to fund the obscene cost of this scheme in its current state.
It is therefore fantastic to see Labour in support of raising the age of entitlement by one or two years, just as the Retirement Commission did in 2010.
Claims by the likes of Grey Power that they have a right to start receiving super at 65 fall on deaf ears with the majority of the younger generation.
The fact that you have paid your taxes during your working life in anticipation of this entitlement does not equate to an obligation on the part of my generation to make up the shortfall when the cost is too great. I'm not having it and it's exactly for reasons like that that working-age New Zealanders are crossing the ditch where a compulsory saving scheme is in place and does not transfer the cost of retirement onto the hands of others. What you put in is what you get out, and that is what you have a right to - no more, no less.
Tariana Turia claims that if the age is raised, Maori citizens should qualify for superannuation at the age of 60, a whole seven years before everyone else.
This is a ridiculous attempt at securing benefits for her core constituency.
Turia is correct that Maori life expectancy is lower than most other ethnic groups, but that doesn't mean all Maori will die earlier and this is the kind of generalising politics which is damaging, divisive and inequitable.
In one of Peter Dunne's few unique initiatives, he proposed a policy prior to last year's election that seemed to make sense on a fairness and efficiency basis. That was to allow New Zealanders to take superannuation at reduced rates down to 60 or increasingly enhanced rates if they hold off until between 66 and 70. Whether this would significantly reduce the cost of superannuation would depend on the choices people make and the levels set.
The most obvious change to me seems to be means testing superannuation. It seems absurd that some of the richest folks can be receiving a pension on a par with those struggling to even afford the cost of heating through the winter.
If you are in a comfortable enough position for superannuation not to be necessary, it seems intuitively wrong that we should continue to supplement that to enable your kids to get a greater inheritance while the working population face continual tax hikes and the rest of the elderly struggle to live in healthy conditions, let alone think about leaving anything behind.
Intergenerational burden pushing must be reduced when the cost is burgeoning so dramatically and unnecessarily.
