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Superannuation - the issue that no-one's talking about

Posted on 23 Jul 2002

There’s an eerie silence in the run up to this Saturday’s election, according to Michael Littlewood, a commentator on retirement income issues.  It’s the “superannuation silence”.  Just as there is virtually no discussion on broad economic issues, there is almost a complete silence on policy differences that exist on both the public and private provision of retirement incomes.  This is in total contrast to most elections of the last 27 years when much political blood was spilt on superannuation.

Michael Littlewood has looked in detail at the policy statements of all the parties that presently have at least one MP in the House.  He has analysed the issues relating to public and private retirement incomes into their component parts and rated all parties on a points system across each component.  Some policy options are, in Michael Littlewood’s view, damaging.  A party scoring well on these issues (like tax incentives or compulsory private provision) would get zero points.

Attached to this note is an issue-by-issue summary from each of the key statements by the parties with marks awarded by policy and across all parties to allow a detailed comparison.  The table gives summary results from Michael Littlewood’s “Superannuation Score Sheet” with the parties ranked from “best” to “worst”:

Superannuation Score Sheet

Party

Summary

Mark (out of 100)

ACT

Summary: this is a significant step forward.  A much improved effort, remembering the party’s genesis with Roger Douglas.

77

United Future

A reasonable B- pass mark, scoring well from the emphasis on consensus building.  This fits with the image of a party of “reasonable” people.  Failure to explain positions and equivocal statements on populist policies lost marks (or limited the possibility of losses?).

61

Greens

In their own way, the Greens have described the issues on a basis that appeals to their followers and have some sound basis.  Lose ground by implying NZS will be there forever and that we don’t need to discuss it.  A fail mark overall.

48

National

A poor, seemingly rushed effort.  Displays little vision and very few rewards from three years’ reflection.  This after superannuation was a major reason for the 1999 defeat.  Could do much better if tried.

45

The Alliance

A policy black hole with no current statement - can only be guided by the last three years’ actions rather than the seemingly current, 1999 election policy.  A pity.   Illustrates the dangers of coalition politics; has been corrupted on superannuation issues by the junior partner’s need to get political runs on the board (the People’s Bank).

35

Progressive Coalition

A rushed, spare, disappointing but expected result from one of the “governing” parties.  Does better than its political masters (Labour) because of the sniff of research and political consensus.

25

Labour

A dismal effort from a governing party.  Despite much participation over recent decades, has seemingly learned little.  Comes straight from the “command & control” school of economic illiteracy.  “Trust us, we know what we’re doing and no, we don’t want to talk about it.  That might indicate weakness and we can’t have that; New Zealand needs strong leadership.”

15

New Zealand First

A blast from our antediluvian past.  Hasn’t been paying attention – seems untouched by the debate of the last 25 years.  Prescriptive strategies won’t stick.  Score indicates that it would probably be better to say nothing.

2

Based on these results, Michael Littlewood suggests that it’s not difficult to see why there is such a resounding silence on the superannuation issue.  It seems that having happened, by accident, on the “65 at 65” formula, the parties feel they don’t need to say anything more.  Michael Littlewood suggests that nothing could be further from the truth so there is, perhaps, a conspiracy of terror.  On the basis of the Superannuation Score Sheet, all parties, with the possible exception of ACT should really want to avoid detailed challenges on the issue.

If voters wanted some guidance on how to vote on Saturday, here are Michael Littlewood’s suggestions based just on the superannuation as a defining difference.  Given that no-one is talking seriously about superannuation, Michael Littlewood suggests that perhaps a little levity might stir things along:

  • The Supreme Award for overall excellence and willingness to learn – ACT.
    Comment: a significant improvement but with potential room for further development.  Still room to improve by accepting the elements needed for wide-ranging consensus, such as not adopting fixed positions.
  • Savings Industry’s Gold Medal For Self-Interest – New Zealand First.
    Comment: Still advocating compulsion and tax incentives even after the 1997’s referendum stunning 93-7 result.  All promoters of saving products should fall in behind.  It’s seemingly their only hope.  Silver medals for joint second place to National, Labour and The Greens for overt support to ineffective tax incentives.
  • The “Goldilocks Award” – United Future.
    Comment: Not too hot, not too cold.  Recognises that a call for consensus demands few fixed positions (or political risks) and needs mainly a willingness to lead and to listen.  Rare commodities amongst our aspiring leaders.
  • The “Aspiring Capitalists Award” – The Greens.
    Comment: shows unexpected capitalistic sense in respect of the Big Cullen Fund and need for economic growth but nearly spoils it by going on about unhelpful, hand-knitted policy issues.
  • The “Aurally Challenged Award” – National.
    Comment: for a party that supposedly appeals to rightish voters, it might be disappointed by the lower result on the Superannuation Score Sheet than The Greens.  Has not been listening and thought voters might be bribed with their own money.  Based on the polls, they’re seemingly not that silly.
  • The Choral Federation’s “Sing Along Vote” – realistically, anyone at all.
    Comment: aside from New Zealand First’s dissonant push for the over 65s’ vote (even higher pensions than now), they’re all singing the same song – “65 at 65”.  So, nearly anyone will do.
  • The “Emperor’s Clothes Special Award” – The Alliance.
    Comment: apparently saw no need for a 2002 superannuation policy to replace the 1999 model.
  • The “Visually Impaired Society’s Award” – Greens, National, Labour, Progressive Coalition and The Alliance.
    Comment: Impossible to separate on the line – all seemingly believe that “65 at 65” can go on forever.  And, if they don’t believe it, they’re not saying so.  This is the conspiracy of terror.  Who will blink first?
  • The Young Taxpayers’ Special Award – ACT.
    Comment: singing a lonely song that should appeal to younger voters with a financial eye on their aging baby boomer parents who are busy trying to lock in “65 at 65” and prevent future change.
  • The “Rip Van Winkle” Award – New Zealand First.
    Comment: Has seemingly been asleep since before the 1997 Referendum.  We wonder which bit of 93-7 it doesn’t understand.

Michael Littlewood says that those with an interest in superannuation issues must await 2005 and a new election.  He says we can now be confident that nothing constructive will happen in relation to the main superannuation issues in the next three years.  In 2005, it will be only six years before the first baby boomers reach age 65.


For further information:

Michael Littlewood                Ph    (09) 375 9800
Planit Services Limited          Fax   (09) 375 9801
Box 8811                             DDI  (09) 375 9802
Symonds Street                   Email michaell@planit.co.nz
Auckland 1035