Taskforce wants goverance structure changed
Although the new Government plans to axe the Super 2000 Taskforce, its chair Angela Foulkes, calls for greater freedom to complete its work.
Friday, December 3rd 1999, 12:00AM
Over the 12 months since its inception, the Super 2000 Taskforce has found a
willingness by younger New Zealanders to accept changes to today's retirement policy. This has been matched by a desire to protect those who are in retirement or approaching retirement. Time is running out though, to develop a retirement income policy that will remain more or less intact for the next 50 years.
In 15 years, the first of the baby boom population will retire. From that time on, for several decades, the proportion of people 65 and over to younger people in the labour market, will be significantly higher than today.
Indeed, no matter how we plan, the public provision for those in retirement in 2030 will have to be paid from income that is earned in 2030. The needs of individual retired New Zealanders then will be no less diverse than they are today, but the pressure on resources will be far greater. For, in 30 years, the population over 65 will have doubled to almost one million and the number of elderly retired, those over 85, will have nearly tripled.
The task that faces the incoming Government is to put in place an affordable and fair retirement income policy that is sustainable for several general elections and every change of Government. While that may seem unlikely at first glance given the political debate on superannuation over the past 25 years, a persuasive set of circumstances is at hand for us to achieve a consensus and to steer a new course.
Opportunity for consensus
The first is the depth of public feeling on the issue. Our research shows that 89 per cent of New Zealanders want political consensus and 88 per cent say they need as much certainty as possible so they can plan for their own retirement.
Second, for the first time the consequences of failure to address the superannuation issue will come home to roost in the political lifetime of today's senior politicians, most of whom are part of the baby boom generation.
Third, most politicians agree that we have an opportunity over the next 10 years to put in place changes, even though today they may disagree on what those changes should be. Most people agree that it will be much more difficult to put those changes in place if we start to do it when the baby boomers retire.
Fourth, New Zealand's mixed member proportional electoral system requires parties that form a government to reach consensus on a range of policies. Several parties of the existing Parliament are already committed to a multi-party agreement and all but one party speaks of working with opposing parties to reach agreement. If parties representing a significant majority of the public agree to adopt a multi-party approach, it would go a long way toward restoring confidence in the political system.
Fifth, enduring political consensus is achievable. In Sweden, political parties representing over 80 per cent of the population have agreed on long-term retirement principles and implemented a policy which has survived a change of government from the Right to the Left. The issue is now off their political agenda.
On the threshold of a new millennium and with the cost increases associated with today's policies now visible, we are in a much better position to reach a consensus than even a decade ago.
If we fail to obtain political consensus, which is a pre-condition for long-term sustainability, then as the number of older New Zealanders increases, we will face a breakdown in the social contract between old and young as each group competes for the limited resources of the tax dollar.
It is our view that to secure multi-party consensus all generations of New Zealanders need to be involved in the debate. In this way political parties will be forced to confront not just the short-term issue of current policy, which is difficult to do in a competitive environment, but to address the longer term issue, which may be easier because it increases the potential for discussion, rather than rhetoric.
Independence of the Taskforce
The Taskforce is due to report in November 2000. If it is to succeed, though, it will have to move among the community and all political parties with a genuine sense of independence.
While the present Government has not sought to influence the work of the Taskforce and provided it with a broad mandate, it is not possible to escape the perception held by some that we are not totally independent. In short, there is a step beyond permission to be frank with our views that is required if all political parties are to have faith in the integrity and independence of the Taskforce.
Indeed, we see additional constraints on our ability to communicate, which will come more sharply into focus, as we finalise our report. The convention is that while it is acceptable to explain current policy, it is not acceptable for an organisation funded by the State to advocate changed or new policy. That places a severe restriction on what we can say and do whether that be in advertising, public comment or in our relationships with public servants.
It is our strong recommendation that if the Taskforce is to effectively complete its brief, its governance structure must be amended so that it reports to Parliament alone.
This would enable the Taskforce to communicate freely with the public and with all political parties. If a consensus is to be achieved by the public and its view conveyed to the parties in Parliament, then that freedom will be critical, particularly before the majority of parties reach agreement.
Work in train
The Taskforce has a considerable amount of work in train that will guide us toward a consensus. It is work that also has wider application than informing long-term retirement income policy.
Statistics New Zealand is undertaking on our behalf a survey of the living standards of older people. A corresponding survey of New Zealanders generally will also be conducted at the same time. This will fill a considerable gap in New Zealand's knowledge of the needs of the retired and the current life of the retired. The absence of this data has contributed toward participants in the superannuation debate talking past each other.
A clear picture of the living standards of a range of New Zealanders will begin to make it clearer that there is no single delivery mechanism, such as retirement income, that can account for all the needs of the elderly. Just as it has been since the first public provision for pensions in 1898, there has always been the need for a combination of publicly-funded, voluntary and purchased services available to meet those needs.
The surveys will also give those who are planning for their retirement a better picture of the life they can expect with what might be publicly provided. In this way, it will give people the opportunity to plan for their private provision in a way that many find difficult to do today.
Another work stream is examining the labour market over the next 20 to 30 years. This will provide valuable information on how much can be expected to be saved privately and how much can be transferred from those who are working to those who are in retirement.
The labour market project reflects the Taskforce's desire to inform New Zealand not just that its demographic profile is changing, but that this will be a very different country. So, for instance, there will need to be a particular focus on how over time the position of Maori in society may change and how their economic and social structures can help build and be reflected in a retirement income regime.
The third important work stream is around the development of stable governance structures for a long-term retirement income policy once a broad consensus has been reached. In other words, what mechanism will best ensure the policy is not subject to sudden, frequent or dramatic changes. And regardless of what mechanism is in place, how can we ensure that the public and politicians assess the costs and opportunities of any policy changes that may arise from time to time.
Summary
In summary, our work programme is about presenting as publicly and frankly as possible the realities of life for the retired now and life for the retired in the future. Once everyone has that information, we will be in a much better position to see what retirement income policy is sustainable.
Sustainability is the test to which everything must be put. Whatever the policy it must be affordable. It must not be either so mean or so generous that we create generational inequality.
To be accepted it must be seen to be fair to both the retired and the working population. It has to accept the overwhelming reality that we cannot vote ourselves a comfortable retirement. Someone has to pay for it and that requires a strong economy.
Unless a long-term retirement income policy has strong multi-party support, politicians will only be able to tinker with this most pressing of issues. The risk is that if the opportunity is not seized now to secure agreement among the majority of parties, we will continue to put sticking plasters on the present system and have an auction each election to see whether they are left on or pulled off.
The reality is that no party can commit New Zealand to major change unless it can guarantee itself several terms in office. An informed public and political consensus is essential to ensure an enduring long-term retirement income policy.
Angela Foulkes
Chair, Super 2000 Taskforce
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