New PM, new retirement age?

8:18 am on 13 December 2016

New Prime Minister Bill English will not renew his predecessor's pledge not to raise the retirement age.

Bill English announced as the new Prime Minister of New Zealand, Paula Bennett as Deputy Prime Minister. Prime Minster Bill English speaks to media after the annoucement.

Prime Minister Bill English. Photo: RNZ / Rebekah Parsons-King

That has been welcomed by those who hope it may mark the start of a difficult, but necessary, national conversation.

The cost of New Zealand Super is tipped to increase substantially over the next several decades as people reach retirement age and live longer.

Many experts say Super is becoming increasingly unaffordable and the age of entitlement needs go up.

John Key said he would quit as prime minister before raising the retirement age of 65.

Mr English said he would not make any similar commitment.

"I'm not making the same pledge as the previous prime minister did, that was a product of its time, where there was a need to establish trust.

"I think it was a sound decision then, because the election was followed by a recession, which could have caused real insecurity for older people," Mr English said.

Mr English said the government had built credibility since.

"We will support those who are dependent on government for income, we won't put them in a worse position, we'll work to get them in a better position."

The Retirement Commissioner is still pushing for the eligibility age to rise.

Retirement Commissioner Diane Maxwell wants to gradually raise the age of superannuation eligibility to 67. Photo: AFP

In 2014, Labour campaigned on raising the Super eligibility age.

Now its leader Andrew Little does not support raising it, saying too many New Zealanders work too hard to carry on past 65.

"For people who have a lifetime of doing manual work, or hard practical work - and that's anything from your trades to your nurses to people who are working outside - many struggle to get to 65 already.

"Pushing it up another two years is just a step too far for far too many."

ACT Party leader David Seymour said the new prime minister's comments were encouraging.

"We have got to follow what our cousins across the ditch, what the Americans the British the Germans and every other country in the western world is doing and raise the age of entitlement to 67.

"It's only fair to lower generations."

United Future leader Peter Dunne was happy Mr English was not refusing to address the matter. Whether he did anything about it was another story.

Mr Dunne proposed a more flexible form of Super, with compulsory KiwiSaver.

"People should have the choice of taking a lower rate of superannuation from the age of 60, or a higher rate from the age of 70 if they defer until that time," Mr Dunne said.

Media conference in the bunker at Parliament. John Key speaks to media.

Former Prime Minister John Key did not want to raise the retirement age. Photo: RNZ / Rebekah Parsons-King

Retirement Commissioner Diane Maxwell wants to raise the age of eligibility to 67 gradually, over about the next two decades.

"We need to shift this conversation to a bigger broader conversation to about what people need between 50 and 70.

"We know there are people in there 50s who have done manual labour and who are exhausted... we know there are people in their late 60s who will keep working for another 10 years.

"So for some 65 is too early and for some it's too late."

Ms Maxwell said the government would need to take the savings from raising Super and invest them in what people need in their 50s, be it training or upskilling and preparing companies for an ageing workforce.

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