NZ's means-testing creep
From the Best Start allowance for parents of newborns, to the parents of teens applying for Jobseeker, and those in KiwiSaver earning over $180,000.
But when it comes to the old age pension, means testing is too touchy politically, says NZ Herald political editor Thomas Coughlan.
He tells The Detail why the pension is off limits, for now.
'There are things we get universally. Universal free education, a lot of health services are free. But cash payments, those are mostly means-tested with one big exception.'
Every New Zealander who hits 65 is entitled to NZ Superannuation.
'You could be a billionaire or you could have absolutely nothing and you will get it.
'Culturally, politically we tell ourselves that we earn superannuation, we work hard we pay taxes our whole lives and when you retire you deserve to get the benefit from the government that you have paid for for your entire working life. That is the political bargain, I guess, at the heart of superannuation.'
Means testing superannuation is also not as straightforward as other benefits where Inland Revenue knows exactly how much beneficiaries or their parents earn. But most superannuitants don't work, making a means test on income difficult to manage.
That leaves asset or wealth testing, 'which is just uranium wrapped in barbed wire'.
Coughlan says raising the retirement age is seen as the better of 'two horrible options' and National has already signalled plans to gradually raise it to 67. But that is also fraught.
The Retirement Commissioner Jane Wrightson doesn't like either option but is 'more keen on the consideration of means testing than I am of raising the age'.
'But if that became a thing (raising the retirement age) then I would be arguing that it's a really comprehensive and well-thought-through policy change that considers a retirement system as a whole, not just about NZ Super, not just about KiwiSaver but the impact overall on future citizen New Zealand pensioners,' Wrightson says.
She calls the debate around superannuation a gender issue.
'The commentators are mainly men. The issues around NZ Super, and who gets it and when, need to be looked at with a really strong gender lens because women are the ones who get disproportionately affected.'
The Detail also talks to pensioner Doug Beever in Australia where the pension kicks in at 67 and is means-tested.
Beever says he's happy with the arrangement because all of his working life he has been paying into a private retirement fund, a compulsory version of a KiwiSaver scheme that has been in place for decades.
Wrightson says that is the difference between the two countries and why we can't copy Australia's pension model.
The historic superannuation plan is a reason why the country is quite well-off, 'because those funds are in the billions and billions now. And secondly, people have got a decent pot themselves, so when you get that you can absolutely then talk about means testing, you can talk about raising the age … you've got more levers to your bow when your citizens have been protected by a decent regulatory environment.
'This is not what's happened here.'
Check out how to listen to and follow The Detail here.
You can also stay up-to-date by liking us on Facebook or following us on Twitter.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsroom
6 hours ago
- Newsroom
When the Feds come to town
Was it a big deal or not? The director of the FBI, Kash Patel, was sprung by a Herald journalist lurking in the basement of the Beehive. His appearance came after another reporter twigged that the FBI's plane was sitting on the tarmac at Wellington airport. The avalanche of mumbling 'no comment' from MPs was quickly followed by a release from the US Embassy about exactly why such an exciting guest was here – the FBI hanging its shingle out in the Capital. 'Kash Patel being spotted in the Beehive basement felt like the start of a good spy movie,' says RNZ political reporter Anneke Smith. But the FBI has long had a presence in New Zealand, and a former spy spoken to by The Detail says it's no big deal. So why did we get so excited about it? Maybe because everyone loves it when a secret gets out. Today on The Detail, Smith tells us how the story unravelled, and a Senior Lecturer in Security Studies at Massey University, Dr Rhys Ball, questions the significance of the event. Patel himself said – through a carefully curated media package and video that was rigged to look like a press conference, though it wasn't – that it was all about transnational crime including countering the narcotics trade, cybercrime, and 'countering the CCP', the Chinese Communist Party. The FBI was 'opening up our law enforcement attaché office here in Wellington,' he said, to show 'the world that the FBI is actually prioritising a permanent presence across all Five Eyes countries, and here in New Zealand we had not had that until this historic moment'. The China comment was a very different line to what the New Zealand Government took, says Smith. Ministers later that day were reiterating that it was all about cracking down on crime in the Indo-Pacific. Foreign Minister Winston Peters said the issue of China hadn't come up in their meeting. 'Two very different tacks I think taken from New Zealand and the US,' says Smith, 'the US being quite bolshie in terms of framing this up with the wider context in terms of the geopolitical contest in the Indo-Pacific region.' China called the FBI director's statements 'groundless assertions' and described his comments as part of a 'Cold War mentality'. And that's why our politicians played that aspect of this visit down. 'New Zealand(ers) will be well aware we have an important trade relationship with China, they're our biggest trading partner, they're about a third of our exports, a lot of meat and dairy go to China so a really significant trading relationship there,' says Smith. 'We walk very much through the centre line of a lot of hefty controversial subjects on that because of our trading relationship. 'The US, on the other hand, doesn't hold back.' Kash Patel is a controversial figure and a Trump loyalist, who's a conspiracy theorist, supporter of the rioters on the Capitol, an anti-vaxxer and has been accused of perjury. 'I don't think any of that came up during his visit to New Zealand last week,' says Smith. 'That was all about opening the office and signalling it's here in the Indo-Pacific.' Dr Rhys Ball says the move isn't really a big deal. 'It's part of the usual relationship or engagement that intelligence and security agencies have,' he says. 'Particularly in the Five Eyes community. The legal attaché role within the FBI is a simple liason office role, and there's been engagement with Bureau legal attachés for a long time.' He says there are New Zealand police liaison agents in other countries around the world, and that's usually a quid-pro-quo situation. The difference now is that where the legal attaché in Canberra used to be responsible for New Zealand, that person is now in Wellington. 'One perhaps can speculate that particular role for the Canberra Legat office has got quite big now and the business that needs to be discussed has expanded to the point where the Bureau, and Wellington, feel the need for a permanent presence in Wellington,' says Ball. He says cooperation between various international law enforcement agencies has increased in the past five to 10 years, particularly between the United States, Australia and New Zealand. 'Things are picking up to the point where there's benefit in a permanent presence in Wellington.' Check out how to listen to and follow The Detail here. You can also stay up-to-date by liking us on Facebook or following us on Twitter.
NZ Herald
18 hours ago
- NZ Herald
The rise of KiwiSaver investment in private equity and what it means for you
More KiwiSaver providers are making moves into private equity investments, opening what was once an asset class exclusively for the rich to everyday investors.
Scoop
19 hours ago
- Scoop
Generate Welcomes Greg Smith As Investment Specialist
Generate is delighted to announce that Greg Smith will be joining its growing team as Investment Specialist from 1 September 2025. In this newly created position, Greg will act as the bridge between our investment team and external audiences, ensuring the smooth communication of our investment strategies to advisers, media, clients, and the broader public. His focus will be on simplifying what can be hard-to-understand investment concepts and elevating Generate's market profile through accessible educational content. Greg brings significant experience from his previous role as Head of Retail at Devon Funds Management, where he engaged with financial advisers and retail clients to expand the company's reach across various platforms. Greg has been prominent in the business media for the past 20 years. He is a well-recognised market commentator, regularly appearing as a speaker on Newstalk ZB, the NBR, TVNZ, and contributing to market-related content across The New Zealand Herald, Stuff, and other media platforms. Previous to Devon, he was the head of research at the Australian-based funds management and market research business Fat Prophets. Prior to his time there, Smith was a global investments operations manager at Mellon Global Investments in London. He is a CFA Charter holder as well as a qualified chartered accountant. "At Generate, we are committed to making our investment expertise more accessible to all," said Sam Goldwater, Generate Chief Investment Officer. "This role ensures that our investment team's insights are effectively communicated to our clients and the broader market. We are thrilled to have Greg on board, as his experience and ability to communicate our investment strategies into clear, engaging content will be invaluable in helping us further educate and connect with investors." About Generate: Generate is an award-winning New Zealand-owned KiwiSaver and wealth manager, with an exceptional long-term track record of fund returns. For the fourth year running Generate has been awarded the prestigious Consumer NZ 'People's Choice for KiwiSaver'. Generate has a strong focus on educating and empowering its customers and has over 82% of members' KiwiSaver funds in growth funds versus the market average of 47%. It currently manages ~$7.7bn on behalf of 172,000 customers.
