The window is getting smaller
AMP general manager John Drabble explains why the superannuation issue needs to be tackled immediately.
Wednesday, October 13th 1999, 12:00AM
In 1991, the Todd Taskforce convened to look at the relationship between public and private provision of retirement income in New Zealand. The general consensus then, was that New Zealand had a window in which to get its superannuation policy right.
Eight years on, the views of our political parties appear to be as diverse as ever. The window is getting smaller and the prospect for long term consensus and a stable policy seems as elusive as ever.
But time presses on and the issues are not going away. It is critical that New Zealanders address the debate around planning for retirement.
Why? In June, the Super2000 Taskforce reiterated what others have already said. As a proportion of GDP, NZ Superannuation will more than double over the next 50 years - from 5% currently, to 11% by 2050. Some say we simply cannot afford the projected expenditure required to sustain our future retired population.
But what compromises should be made in order for political and/or community consensus to be reached? Even the industry doesn’t agree. Conversations I have had with my colleagues at AMP, and others throughout the industry, simply highlight the vast range of views on the topic of retirement planning and the role of New Zealand superannuation.
Their arguments are wide-ranging – from "tax-paying New Zealanders already have a form of compulsory superannuation", to "the safety net itself, New Zealand superannuation, is stopping people from taking responsibility for saving for their own retirement".
I have found the arguments around universal entitlement versus means-tested benefits to be reasonably provocative, and the differing tax treatment between property investment and other forms of saving is perplexing.
It is no wonder political parties have been unable to reach consensus.
Am I biased? Of course I am. New Zealanders need certainty in order to plan their futures realistically.
Because of the uncertain framework, some people aren’t doing anything to prepare financially for their future. While I don’t support their apathy, I sympathise about what their retirement might be like.
However regardless of whether the parties debating superannuation reach a consensus or not, the issue of planning for retirement is clearly one which affects every New Zealander – not just at an intellectual level, but in practical terms.
That’s why every New Zealander needs to take responsibility for this issue – and I encourage you to contribute to the debate here at www.supertalk.co.nz.
AMP’s corporate vision is to help our customers achieve their dreams. In order to do that, I believe we need to ensure that people planning their financial futures can rest easy in the knowledge that they have the ability to achieve the security and comfort they seek in retirement.
John Drabble is General Manager, AMP Financial Services (NZ)
Special Offers
« Why has the PRG report been ignored? Labour outlines its super policy » Commenting is closed
Printable version
Email to a friend
