Latest / Early Edition with Ryan Bridge / Brad Olsen: Infometrics Principal Economist on the OECD report on the NZ Superannuation scheme

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Brad Olsen: Infometrics Principal Economist on the OECD report on the NZ Superannuation scheme · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So back to this new OECD report for a second.
• 0:03
  Speaker 1: They reckon the age of eligibility for super should go up,
• 0:06
  Speaker 1: basically get the pension later. Okay, that's not so controversial
• 0:10
  Speaker 1: now outside of a New Zealand first in our parliament.
• 0:13
  Speaker 1: But recommending eligibility be linked to life expectancy that is controversial,
• 0:19
  Speaker 1: eventually rising as high as age sixty nine, also recommending
• 0:22
  Speaker 1: means testing to factor in ethnicity and occupation. Nikola Willis
• 0:26
  Speaker 1: agrees that something has to change on this.
• 0:29
  Speaker 2: Whether or not it is through the approaches that the
• 0:31
  Speaker 2: OECD suggests is another question. Bush. Is there a form
• 0:36
  Speaker 2: required to our superanuation settings? Yes?
• 0:39
  Speaker 1: So Brad Elson informetric CEO with us this morning.
• 0:41
  Speaker 2: Hey Brad, good morning.
• 0:43
  Speaker 1: How would it work the life expectancy part if it's
• 0:47
  Speaker 1: is it linked to an average for an ethnicity or
• 0:50
  Speaker 1: how would it work?
• 0:51
  Speaker 2: Well? I mean, all of those details would have to
• 0:54
  Speaker 2: be worked through when we've looked at it before. The
• 0:56
  Speaker 2: general better approach, in my mind, would to be to
• 0:59
  Speaker 2: have it to just general life expectancy. And partly that's
• 1:02
  Speaker 2: how you'd already get up to sort of sixty seven
• 1:05
  Speaker 2: sixty eight as the age, because we are just spending
• 1:07
  Speaker 2: so much more time. We're living so much longer that
• 1:10
  Speaker 2: we're spending more time on New Zealand super. So you
• 1:14
  Speaker 2: could do that over time. You could look at it.
• 1:15
  Speaker 2: Stats in z brings out comprehensive life expectancy figures over time.
• 1:20
  Speaker 2: I'm probably less keen personally on you know, lucking things
• 1:25
  Speaker 2: through life expectancy for different ethnicities or cohorts, only because
• 1:29
  Speaker 2: I don't really feel that you should be paid out
• 1:32
  Speaker 2: earlier in life or change your expectancy just because you're
• 1:35
  Speaker 2: a different ethnicity. If we've got problems there, and so,
• 1:38
  Speaker 2: for example, we know that Marty die earlier, we shouldn't
• 1:41
  Speaker 2: pay them out because they die earlier. We should stop
• 1:44
  Speaker 2: them dying earlier. There's sort of a different approach. But
• 1:46
  Speaker 2: long story short, the OECD has made it clear we
• 1:49
  Speaker 2: need to do something about super You know it, I
• 1:51
  Speaker 2: know it, Everyone seems to know it. But we were
• 1:53
  Speaker 2: also not particularly convinced it will happen, be it something
• 1:56
  Speaker 2: around means testing or the age or life expectancy or
• 2:02
  Speaker 2: for example, one of the things Treasury has talked about,
• 2:04
  Speaker 2: which is linking superannuation payments through to inflation rather than wages.
• 2:09
  Speaker 2: All of those things we're going to have to consider
• 2:11
  Speaker 2: because at some point otherwise we're going to hit a
• 2:13
  Speaker 2: bit of a fiscal cliff.
• 2:14
  Speaker 1: Yeah, we're going to pay the piper. Hey, what about it?
• 2:17
  Speaker 1: So just coming back to your point, and it was
• 2:18
  Speaker 1: a good one about you know, ethnicity and whether you
• 2:21
  Speaker 1: use that as a barometer for how long somebody or
• 2:24
  Speaker 1: how early somebody gets supers It doesn't seem I mean,
• 2:28
  Speaker 1: it's the current situation is not fair on average. You
• 2:32
  Speaker 1: have to accept that. But also if you were to say, oh,
• 2:35
  Speaker 1: this Chinese person or this Indian person, or this European
• 2:39
  Speaker 1: person gets SUPER earlier or later. I mean, you can
• 2:43
  Speaker 1: all get hit by a bus tomorrow, can't you, And
• 2:45
  Speaker 1: then you've only had SUPER for a year or two,
• 2:46
  Speaker 1: and then that's not fair.
• 2:49
  Speaker 2: Well exactly, and not only that, but again depending on
• 2:51
  Speaker 2: just how detailed you get it, you know what happens
• 2:53
  Speaker 2: if you then then bring in the likes of, you know,
• 2:56
  Speaker 2: the occupation that you're in. I know, that's a constant
• 2:58
  Speaker 2: one that's brought up in terms of, you know, people
• 3:01
  Speaker 2: who are often in more manual trades and similar they
• 3:04
  Speaker 2: often can't keep working past a certain stage, and so
• 3:07
  Speaker 2: you get into all those complications. I guess that the
• 3:10
  Speaker 2: worry writers that when you look at some of those
• 3:12
  Speaker 2: occupation groups, the same rings true today, Like it's not
• 3:16
  Speaker 2: like at age sixty five. Today you know, builders are
• 3:18
  Speaker 2: just absolute spring chickens, and at sixty five plus one
• 3:21
  Speaker 2: they're all of a sudden completely destitute and unable to work. Like,
• 3:24
  Speaker 2: the pressures on occupation groups are very much there. I
• 3:27
  Speaker 2: think the decision we've got to come to as a
• 3:29
  Speaker 2: country is, at the moment, we've got a universal system,
• 3:32
  Speaker 2: everyone broadly gets it all at the same time. If
• 3:34
  Speaker 2: we move away from that, we've got I think, have
• 3:36
  Speaker 2: a much broader conversation about why, what is the purpose
• 3:40
  Speaker 2: of New Zealand super what are we trying to achieve?
• 3:42
  Speaker 2: And at the moment, I think the challenge, right Ryan,
• 3:44
  Speaker 2: is we keep having this conversation. I mean, we could
• 3:47
  Speaker 2: do this every three weeks now a report that comes
• 3:49
  Speaker 2: out and says it. And are we realistic that it's
• 3:51
  Speaker 2: ever going to change? I certainly feel pretty despondent that
• 3:53
  Speaker 2: anyone's actually going to take the bull by the horns.
• 3:56
  Speaker 1: As soon as WinCE Competer's leaves politics and this will
• 3:58
  Speaker 1: all change mark my words.
• 4:00
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• 4:04
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• 4:08
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