A question to Q+A about those welfare bludgers emphasises why the conversation about superannuation reform is so vital... but also comes with risk

I wrote this post for TVNZ yesterday, but wanted to share all of it with Pundit readers, because it's something we've discussed more than once and several of you have really helped me get my head around this... It's why superannuation matters, how it's perceived as the "good welfare" and how the real problem we face is from the "bad welfare". Anyway, here 'tis:

A question from Q+A viewer Jonathan has prompted this post, because he raises such a crucial question.

He emailed the programme while David Parker and Steven Joyce were debating the retirement age and compulsory superannuation to say we were looking at the wrong issue.

Can some one please tell me why we are worrying about retirement money and were it will come from, when the main problem is at the other end of the scale, which is unemployment, and the amount of money we are spending there. [That money] could go in to retirement, but is sucked up by the unemployed who contribute nothing to the country!

It's a point I've heard made a few times (with or without his dubious generalisation about "the unemployed") and is a crucial question – or it would be if Jonathan's premise was right. But it's not.

The simple reason superannuation is such a big talking point now – and why Labour's new policy is so significant – is that the super bill is one of the country's biggest.

It's the elephant in any room that has something to do with government spending.

Bigger than the dole.

Even bigger than the DPB. Because there are so many retired folk – many more than there are unemployed or sick.

Here are the numbers. This year's Budget had a total social welfare spend of a little over $23 billion. So how does it break down?

Sickness benefit: 782.38 (3.40%)
Unemployment benefit & emergency benefit: 1,028.95 (4.40%)
Accommodation assistance: 1,264.23 (5.50%)
Invalid's benefit: 1,346.84 (5.80%)
Student loans: 1,589.68 (6.90%)
Domestic purposes benefit: 1,894.64 (8.20%)
New Zealand superannuation: 9,575.37 (41.30%)

As you can see, superannuation is over 40 percent of the bill. Nothing else hits double figures. And as a share of GDP, the cost of super is forecast to double in the next 40 years.

The true significance of Labour's announcement this week is that the politically unspeakable has been said out loud.

No-one wanted to touch the superannuation debate exactly because it involved so many people – so many people who vote.

Now that a major party has committed to raising the retirement age, it seems inevitable the policy will happen.

To paraphrase Humphrey Bogart – maybe not today, maybe not tomorrow, but some day and for the rest of your lives. A gazelle has split from the pack; the spell has been broken.

And the significance of that is that such a large chunk of government spending is now on the table – for better or worse, richer or poorer.

Yes, there is a risk that if we're willing to have the super debate, everything from its universality to its percentages are up for grabs.

If it's changed once, future governments could change it more – cut it, slice it, shrink it.

But the plus side is that we can now talk about how we save, as a country, for our retirement.

And that's essential, because contrary to what Jonathan thinks, it really is one of the biggest issues in town.