Pensions under attack – Superfund not the answer

Under Bill English the National Party has made one major policy change so far as it heads into the general election on 23 September. This is to adopt Labour’s old policy of ratcheting up the age of retirement.

Bill English is proposing that from 2037 to 2040 the retirement age will be incrementally increased to 67. This means that anyone born after 1973 will have to wait two more years until they qualify for the state pension.

Furthermore, National’s new policy is to double the residency requirement to 20 years. This change is another blatant attempt by National to compete in the race to the bottom in the anti-immigrant bidding war. Winston Peters immediately responded by announcing that New Zealand First’s policy is that immigrants would have to live here for 25 years to qualify for the pension.

Bourgeois commentators have rushed to support the new policy; their scorn for the working class paraded unabashed. They say that if the retirement age is not raised, increasing life expectancy could result in workers receiving a pension for 30 years – shock, horror, ridiculous, what a waste of money!

In fact, although life expectancy is increasing, workers are a long way off from living into their nineties. Life expectancy follows class lines. There is a big difference between the average life expectancy of Māori and non-Māori. Life expectancy at birth is 77.1 years for Māori females and 73.0 years for Māori males, compared with 83.9 years for non-Māori females and 80.3 years for non-Māori males. Within non-Māori class differentiation is shown by life expectancy being 78.7 years for Pacific females and 74.5 years for Pacific males. Life expectancy is increasing for all groups and the gaps between Māori and non-Māori and males and females are slowly decreasing. Currently, the poorer end of the social scale takes far less out of the pension budget than the wealthy. The proposed increase in the pension age will, in particular, affect workers whose bodies become worn out by manual labour. It is already a struggle for many to hang on until 65.

If we cannot change society and get rid of its inequalities, National’s pension changes will have its greatest impact on the lives of those with the lowest standards of living, and they are disproportionally Māori and Pacific members of the working class.

Labour fought the last general election handicapped by a pension policy to raise the age of retirement to 67 much earlier than National are now proposing. Andrew Little now says that since he became party leader Labour’s policy is to keep the retirement age unchanged. Thank goodness Labour will now stand to the left of National on this issue.

Since English announced the new policy, the focus of Labour’s response has been to criticise National for not keeping up contributions to the Super Fund. This is foolish. Labour are avoiding taking on National over the principal arguments in favour of workers having longer and more fulfilling retirements.  Labour should be arguing straightforwardly that making people work for another two years is an attack on the working class. They should be countering National’s argument that the pensionable age of 65 is unsustainable. Labour could potentially galvanise working-class support on this question and put National on the defensive. By harping-on about the Super Fund, Labour is in danger of conceding that there is an affordability problem and letting National off the hook.

The Super Fund should be opposed by all socialists. It is also known as the Cullen Fund after Labour’s former Finance Minister Michael Cullen, who now as Chairman of New Zealand Post is overseeing its rundown as a public service. The fund, started in 2001, is a scheme whereby Labour governments invested nearly $15bn of public money in global stocks and shares with a view to making profits that could be creamed off the fund to off-set paying for the state pension scheme. This money could have been used more effectively by better funding health and education, to name but two public services. The public finances should not depend on the ups and downs of company profits. The Super Fund is an ultra-neo-liberal approach to funding the state pension. Pensions should be paid for by taxation.

As long as we are living under a capitalist system state pensions for the working class will be under threat. If the wealth in society was equalled out, we could all retire earlier, if we wanted to, enjoy much higher pensions and be active in retirement in our local communities. Bill English has given us one more reason for a socialist revolution.