12 Jul 2011

Government says no to raising pension age

7:37 pm on 12 July 2011

The Government has formally rejected the Retirement Commissioner's call to raise the age of eligibility for superannuation.

The recommendation was for the age to be raised gradually from 65 to 67, but the Government says it is committed to the settings for superannuation as they stand.

Retirement Commissioner Diana Crossan says politicians have their heads in the sand and something needs to change to keep New Zealand Super affordable in the long term.

Prime Minister John Key says he has already given a commitment he will not raise the age of eligibility and the most important thing is to strengthen the economy.

"The best way to make sure we can afford all the things we want - whether it's retirement, good healthcare, better education services - is ultimately if we have a strong economy that produces the revenue that the Government can then deploy to making sure we deliver the services we want. One of those is obviously pensions."

Ms Crossan says if the Government does not think raising the age of eligibility is the solution, then she is interested to hear what the alternative is.

Labour leader Phil Goff says his party has a plan to meet the future costs of superannuation without raising the pension age.

Mr Goff says Labour does not believe raising the age of eligibility is necessary.

"We think that we can avoid that alternative through the mechanisms that we've put in place in the past that the Government has stopped funding - the Cullen Fund - and through a policy that's not a one-off sale of state assets, but one that will raise tax revenue on an ongoing basis."

Mr Goff says more information will be released on Labour's tax policy on Thursday.