27 October 2009 Media Statement

Compelling evidence that national super at risk

Confirmation that there will be more than one million Kiwis aged 65 and over by the late 2020s underscores the foolish short-sightedness of National’s decade of deferrals to the Super Fund, says Labour Finance spokesperson David Cunliffe.

“In fact, it is more than stupidity and short-sightedness. National has never been committed to national superannuation, and has little compunction about putting the scheme at risk.”

David Cunliffe said the size of the pending problem was underscored by today’s announcement from the Statistics New Zealand on national population projections.

“Statistics says the number of Kiwis aged 65 and over is expected to eclipse a million by the late 2020s,” he said.

“By then the population of older Kiwis will exceed the number of children aged under 15 years. That’s a huge turnaround from the current mix of 555,000 people aged 65 and over, and 890,000 children.

“It’s a turnaround in the population mix that National has clearly either not taken into account, or has shown its true colours by ignoring,” David Cunliffe said.

“In 1996 there were five workers for every superannuitant. By 2051 we expect the ratio to have dropped to two workers for every superannuitant. Why does National consider it fair that in the future fewer workers will have to carry a bigger percentage of the load than would have been necessary without the deferrals.

“The unnecessary decade of deferrals places the future of the Super scheme in considerable jeopardy. In fact, it is the death knell for the scheme as we know it, and as we have trusted it to remain in the future.

“Ongoing contributions to the Super Fund are essential to guaranteeing future super payments to New Zealanders. At the time of the Budget, National said investment was risky given the volatility of financial markets, but it has been proven again clearly since then that the best time to invest is when asset prices are low and investments are likely to rise sharply in value.”

David Cunliffe said Kiwis have relied on Super being there for them when they retire. “Today’s population projections prove future generations of Kiwis can no longer expect that to happen.”

ENDS

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