Monday, June 18, 2012

On New Zealand's Retirement Income. Pension.


The finance industry have been creaming their pants, for a return to the halcyon days, before the tax rebates were removed from superannuation savings. When they got to play with our money for free, and the negative returns and high charges were ignored, because of tax payer subsidies.

Egged on by the neo-liberals who prefer the elderly, the unemployed and the sick to starve in the streets, as an incentive to scare working people into accepting starvation wages, while they continue to get 17% increases in wealth, the finance industry is dreaming of getting more of their sticky hands on our wealth,  with private super funds.

Since the 70's they have been constant in the meme that we cannot afford super. A meme that has been driven entirely by the self interest of those, who are too wealthy to need super and too mean to pay taxes, and a greedy finance industry.

Unfortunately, it is true, that if you repeat bullshit often enough, even those who should know better come to believe it.

We cannot afford super is code for, "we should leave our elderly to beg on the streets". So that wealthy people can pay less tax and the finance industry can again lose our savings for us.

In fact the idea that State super is unaffordable is crap from the same people that cry TINA and reckon that all social insurance is unaffordable.

If they win with super, they will just start on other social wages.

In reality it is much more affordable than the finance company bailouts, which would be necessary with private super.
"So, in 2050, we're projected to be paying only 1% of GDP more in superannuation than we were paying in 1990. Quelle horreur! This is not a difference to be terrified of, and it is easily manageable with a modest increase in taxation, either now or in the future (though that perhaps is exactly what those pushing for change are frightened of: higher taxes)".

Intergenerational theft is another piece of oft repeated stupidity.

"Do we really want to return to the days when most elderly people were totally impoverished when their working lives ended".

Super has always been paid for by current production. However you finingle it financially, whether through current taxation or savings, it still comes from the production of the current generation.

If we want to keep super affordable we should tax the current generation to invest in a sustainable future. Invest in energy, housing, education  and other  infrastructure so that we can keep all our people. Not in financial ponzi schemes which will fall over in the next GFC.

""Because our kids can’t afford to buy houses, we bought houses for them to live in using the equity from our house, and now all our money is tied up in mortgages. At the same time, we’re supporting our parents in their old age.
That’s how life is and always has been, for most of us. Our parents worked to give us a decent start in life, and we worked hard so our kids could have a fair go. We’re looking after our parents in their old age. We hope we’ll be looked after in our old age.

What about this is “intergenerational theft”?""

But. We can avoid the whole concept of retirement, intergenerational fairness and all the other sticking points by accepting that everyone in our society is entitled to a liveable share  in the society they and their ancestors have built up.

Whether you call it a Universal income,  Guaranteed minimum income (GMI) or a personal shareholder payment it is the same thing.

Replace all welfare, social insurance and pensions with a GMI.

We also get to solve many other problems such as child poverty, the unfairness of a present welfare system, and making our society more sustainable,   at the same time.

""Initially, the Mincome program was conceived as a labour market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work.
It turns out they did.
Only two segments of Dauphin's labour force worked less as a result of Mincome - new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren't under as much pressure to support their families.
The end result was that they spent more time at school and more teenagers graduated. Those who continued to work were given more opportunities to choose what type of work they did"".  The best way to deal with any problem is to eliminate it at root. The best way to deal with ‘retirement’ as a problem is to eliminate the entire concept. No I’m not being extreme.
The simple answer is a Universal Income""

""In fact super has been so effective in removing poverty amongst the elderly it should be extended to everyone in the form of a guaranteed minimum income. There is no excuse for having people with inadequate food and housing in a country which is capable of supplying an excess of both internally"".


  1. What an inspiring and articulate post!!! Glad I have your blog on my reading list!!!!!!