Retirement Commissioner Colin Blair outlines some simple questions that every political party should be prepared to answer when putting superannuation policy to the public.
Research results recently released by the Superannuation 2000 Taskforce confirm what the public told us just after the Retirement Savings Scheme referendum. 89 per cent of the adult population want the political parties to get together and put in place agreed procedures which will provide much greater stability in retirement income policy.
It is clear that will not happen prior to the 1999 general election. The public can therefore expect each political party to put forward its own proposals in this area. That is a feature of our democratic process and it is not appropriate for me to get involved in the political debate that will arise. But a legitimate question is "how can voters assess the merits of the different proposals, each of which will be presented as the most desirable?"
The simple answer is that it is very difficult to make any such assessment in isolation. Retirement income policy needs to be considered as one part of a package of proposals. Given the current and potential level of expenditure on New Zealand Superannuation, it will be a very significant part of any policy package.
I believe however that there are some simple questions that every party should be prepared to answer when putting superannuation policy to the public. For example:
We know from the 1997 Periodic Report Group and other research that with the ageing population, the proportion of our resources required to meet the needs of the retired will increase substantially from about 15 years out. Does your party’s policy take that longer-term factor into account and if so how?
Have you assessed the impact that your policies may have on the long-term costs of providing New Zealand superannuation? Will you release those figures? If the medium/long term cost trend is materially upward, how would those extra costs be funded?
Are you satisfied that your proposals are fair to different generations of taxpayers? Which generation will benefit from your proposals and which generation will meet any increased costs?
More than anything, those planning ahead for retirement want much greater stability in the area of retirement income policies. What is it about your party’s proposals that should give me confidence that they would not be changed if a different party took over government in three years time? What are your plans for delivering the policy stability that New Zealanders want in this area?
Do your party’s plans incorporate any changes to the existing basic framework (i.e. universal pay-as-you-go tax-funded New Zealand Superannuation coupled with voluntary private provision)?. If so, what in particular are you hoping to achieve with those changes? How will we be able to monitor whether your changes are having the planned effect over time?
Will your proposals stimulate New Zealand’s economic growth? If so, how?
The responses to these questions will indicate how well researched proposals are; and should help voters assess the relative merits of different proposals.
