Former National Party leader Don Brash has waded into the row over the cost of NZ’s superannuation, saying John Key is wrong not to signal a debate on age eligibility.

Brash says Key’s election promise not to alter the scheme is unnecessary. Dr Brash warns the cost of super will blow out, reaching 8% of GDP by 2050, a rise from its present level of 4.4% of GDP. He says universal National Superannuation is unaffordable, and the age of eligibility needed to go up from 65 to 67. NZ currently has 553,000 people over the age of 65, a number predicted to reach 1.35m by 2050.

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Brash says John Key doesn’t have to introduce the changes while in Govt. “We don’t have to do this in a hurry, it doesn’t have to be done today or tomorrow or next year even, but let us signal for the sake of the people who are not yet retired, that they may have to work an extra six months, nine months, 12 months or whatever in due course. I think if you flag it far enough ahead, make it gradual and I’ve explained that other countries are doing it, I think it would not be a vote loser.”

Brash says acceptance of a higher age for entitlement would be greatly helped, if people were allowed much greater flexibility over when they start drawing the pension, with early drawing entailing a lower level of pension and later drawing entailing a higher pension. This would have substantial indirect fiscal benefits; more important, it should encourage older Kiwis to stay productively engaged in the community. Changes to Superannuation schemes have already begun in many other countries. The US, Germany, Denmark and Australia have all signalled they will raise the eligibility age for their superannuation schemes to 67.

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