Why grasp one of the third rails of politics just six months from an election? Well, three possible reasons come to mind...

The interesting thing about Bill English's out of the blue superannuation announcement is not the substance of the policy -- it seems mild enough -- but why he made it six months before an election. After all, the key part of the policy, the shift in the eligibility age from 65 to 67 does not even start for another 20 years.

John Key gained substatial support by guaranteeing no change to super while he was Prime Minister, an admission of the third rail effect of any change. So why on earth has Bill English made this move where others feared to tread? And why now?

There are three possible reasons for such an announcement so close to the election.

First, Bill English believes in honesty with the public. Part of being a careful steward of the books is dealing with known risks. The cost of National Superannuation will double as a percentage of GDP by 2060, with much of that increase occurring well before then. It would be imprudent as a sensible finance manager not to deal with this problem. The public have a right to know the reality of the choices well before the problem hits.

Second, English believes he will be rewarded in electoral terms by being honest. That some sector of the voting public who were sceptical of him, will now vote for him and for National. That of course is a contestable proposition, but we will certainly know in six months’ time.

The third reason is a bit more cynical. English needed policies that he could readily trade away in coalition negotiations. That this is a credible reason is plain on its face. The legislation would not be introduced until next year. It contains one element that will have considerable appeal to New Zealand First, a more than likely coalition partner. The shift for eligibility for immigrants from 10 years to 20 years is exactly what Winston Peters has been calling for.

The reality of the announcement is that the public are now talking about superannuation policy. This is likely to continue through to the election. Announcing such a policy this close to the election has the effect of hardening the positions of all political parties. The election period is not a time for a careful and considered debate, with the hope that a consensus will emerge. That typically occurs in the year or so after the election. In the case of superannuation this can now only occur if National forms the government.

Virtually all other parties have declared that age 65 is an immovable rock, so in the event that they form the government they will be bound by this electoral commitment. Thus only National could front a debate following the election. In practical terms they would need to be the leading party in government to do so. Even if the specific policy has been constrained by coalition agreements, the need to have a nationwide consensus on the issue would remain. The fact that the cost of super will double as a percentage of GDP by 2060 makes this an imperative.

In this case the policy choice by English to only start the shift in the age of eligibility in 2037 looks like a strategic decision in political terms. It is far enough away for a considered debate to occur, unlike the 1990’s when the shift from age 60 to 65 was foist on the public with no real opportunity to participate in ta debate.

In six months’ time we will know whether Bill English is a master in understanding the public appetite for such a debate. The implications go beyond superannuation. If he is successful he will feel empowered to promote other such debates. The decision could be the makings of one of the most thoughtful Prime Ministers of the last half century, able to lead the nation through the challenging social, economic, environmental and ethical issues that confront New Zealand.

We will know on September 23rd.

Comments (13)

by barry on March 07, 2017
barry

It might have been honest if he was talking about doing it this decade, but pushing it out to 2040 is kicking the can down the road. (again!).  In fact by 2040 the damage will be done.  The number of people going on to Super will be declining already by demographics, so the change will not actually make that much difference.

Has anybody estimated how much difference?

How much difference will pushing out the qualification period for immigrants?

Without these figures, how can we know whether to support the change?

by Alan Johnstone on March 07, 2017
Alan Johnstone

When Bill English says he hasn't done polling on this, surely he's telling lies?  Apparently he only informed his own MPs a day or two out.

Is he really making policy like this on the hoof? It'd be a massive change from when Mr Key focused grouped things to death.

It's not the kind of management that wins elections.

As for the policy, yes it's fair enough, I supported the change 3 years ago when it was labour policy, I still support it now it's Nationals.

by Katharine Moody on March 07, 2017
Katharine Moody

I don't know where this "fact" that "costs will double as a percentage of GDP by 2060" comes from. Here's the latest I found from TSY in 2016;

"If historical spending patterns were to be continued, the cost of healthcare would grow from 6.2 per cent of GDP in 2015 to 9.7 per cent in 2060, while NZ super would grow from 4.8 per cent in 2015 to 7.9 per cent."

http://www.stuff.co.nz/business/86737651/Treasury-warns-current-health-and-super-spending-trends-will-lead-to-ballooning-Crown-debt

That's not a doubling by my maths.

But more importantly, only three years earlier TSY forecasts suggested that super costs as a percentage of GDP in 2060 would only equate to 6.6% of GDP;

http://docs.business.auckland.ac.nz/Doc/PensionBriefing-2013-6-New-Zealand-Superannuation's-real-costs-%C2%AD-looking-to-2060.pdf

What was the big change, I wonder?

by MJ on March 07, 2017
MJ

'Honesty' is an interesting one. This kind of honesty isn't the same fairness.

This new-found honesty has come in a week of pissing on the younger generations. It's also a week where the self professed data approach rationalist became a cranky old man to tell us the kids were lazy drug taking losers cos a couple of his mates had told him so. 

I hope this hurts at the ballot box. The kids don't vote, but this'll affect people around the age of 40.

It is also 'honesty' against the backdrop of their actions of the past 9 years and a long long phase in time, much longer than Australia. In other words, we'll do some government, just not yet. Wink, wink, nod, nod Nat voters keep up the party and we won't be around for the consequences!

The other elephant in the room is the joke that has been made of the super fund and the losses that no payments has caused us in compounding gains or whatever the term is. 

The final question will be how we will be dealing with increasing health costs for an aging population- something that seems destined to either impact younger and poorer voters most or both...

by Tim Watkin on March 07, 2017
Tim Watkin

Alan, where did he say he hadn't polled on it?

Steven Joyce said today the announcement was on schedule and cabinet had discussed it last Monday and yesterday, so at least they had some time to mull (though not much). I wonder what some backbenchers make of it, especially those down the list.

by Alan Johnstone on March 08, 2017
Alan Johnstone

I saw a clip on the Herald the other day, he was asked and he said they hadn't polled on it.

It was something that surprised me, I'll try and find a link

by Alan Johnstone on March 08, 2017
Alan Johnstone

http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11...

"National had not polled on the policy, English said. But he knew New Zealanders would be supportive after numerous conversations with voters."

That simply can't be true, can it ?

 

by Wayne Mapp on March 08, 2017
Wayne Mapp

Alan,

Why wouldn't it be true? Obviously National does polling, but on an issue like this any polling on it could easily lead to speculation about a potential change. It would be seen as too big a risk to poll on it.

Much safer to go with ones own political intuition, plus what various trusted confidants are saying.

Also in my experience if a politician makes a definitive statement like "we did not poll on this" then they are telling the truth. No politician that I know (both sides of the House) lies in the way you appear to think they do.

If they are trying to deflect, they typically make some kind of conditional statement, such as "no vacancy now" or "not my current intention", rather than an outright denial.

by Andrew Geddis on March 08, 2017
Andrew Geddis

"National had not polled on the policy, English said. But he knew New Zealanders would be supportive after numerous conversations with voters."

I agree with Wayne ... if Curia had been ringing 500-1000 NZer's asking "what do you think about raising the age of superannuation to 67", it would quickly have hit social media (and real media quickly thereafter). And for English to flat-out lie about not doing so would be to risk a completely unnecessary storm-in-a-teacup.

However, I would note that English's response is quite consistent with National having done some quite intensive focus grouping on the issue - which would probably work better anyway, given the range of factors to consider (i.e. age of eligability/time of change/etc). 

by Alan Johnstone on March 08, 2017
Alan Johnstone

Perhaps we're dealing with semantics and I've read too much into his statement. I agree that lying about it would be strange

In my mind I didn't differentiate between polling and focus groups, but I'd be surprised if a major policy u-turn wasn't extensively road tested with voters prior to being released so close to the election. .  

Getting on the wrong side of the public on this is fatal.

by Chuck Bird on March 08, 2017
Chuck Bird

Wayne and Andrew are both correct on this issue.  I heard Stephen Joyce on the radio state the question had been one of the questions asked in focus groups.  He of course did not say there was quite intensive focus grouping on the issue.

However, I would word things a little differently than Wayne about MPs telling porkies.  MPs do not tell a lie that they feel they cannot get away with.  Due to the nature of collective responsibility MPs lie on a regular basis.  They say they support a leader when they do not.  They support policies they do not.  One lie that cannot be proved is an MPs memory.  John Key got away with that more than most MPs.

Truthfulness is relative.  I am pleased to see English as PM rather than Key.  I view him a lot more honest. 

 

by Wayne Mapp on March 08, 2017
Wayne Mapp

Chuck,

The one area where it seems to be permissible to lie is to say that they support the leader, where there are major questions about the leader, or the potential for a leadership spill. 

No-one expects a politician, when asked by the media, if they support the leader, to say "Of course I don't, they are useless and they should go". In short they do not have to express their inner misgivings about the leader. The only time when that is permissible is when there is an actual leadership contest.

In this area, it is less about politics, and more about human nature and group loyalty.

Policies are different. They represent a consensus view. When the Party has decided on a particular policy then everyone signs up to it, even if they opposed it initially. Once agreed, everyone supports the policy. It is not a lie to say you support it; it is the truth. 

 

by Chuck Bird on March 08, 2017
Chuck Bird

Wayne, I was just pointing out how the system works.  It is how it has to be.  I have heard people argue that there should be electorate MPs only and no parties and that everyone one vote according to the conscience on all issuses. That would be unworkable.  Collective responsibility is the only way things can work.

However, MPs having a selective memory is up to the swinging voters to decide.  It seems the party faithful of all parties would support their leader if he or she said they forgot they had a secret meeting with a foreign leader even if it had been recorded.

My view from my life experience is that SOME people in high postions be they MPs, PMs or HC Judges will lie to protect themselves.  

As you will have seen on Kiwiblog the general view of most is that all National MPs are truthful and the left and especially Winston tell lies.  I wonder if that view will change if Winston hold the balance of power.

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