Latest / Early Edition with Ryan Bridge / Jonathan Eriksen: Superannuation expert, National and Labour agree to cross party support on superannuation

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Jonathan Eriksen: Superannuation expert, National and Labour agree to cross party support on superannuation · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So ACT set out its plan to raise the super age.
• 0:03
  Speaker 1: They're going to raise it slowly by three months every year.
• 0:07
  Speaker 1: And they want to get it up to 67 by 2035.
• 0:10
  Speaker 1: It also wants to cut disability benefits by $ 653 million.
• 0:15
  Speaker 1: They want to actually monitor those benefits a lot more
• 0:17
  Speaker 1: and cut out the guys who shouldn't be getting it.
• 0:19
  Speaker 1: They want to pause contributions to the New Zealand Super Fund.
• 0:22
  Speaker 1: The changes would also put contributions to the New Zealand
• 0:25
  Speaker 1: Super Fund on hold for that would include compassionate access.
• 0:30
  Speaker 1: This is for the guys and girls, obviously, who have
• 0:33
  Speaker 1: spent a substantial portion of their career in physically demanding jobs.
• 0:38
  Speaker 2: I make no apologies for being the only one who
• 0:41
  Speaker 2: gets up every year and says, guys, we have a
• 0:43
  Speaker 2: big problem and we need the courage to take it on,
• 0:46
  Speaker 2: not agree that we might do something in the future,
• 0:49
  Speaker 2: a future that never quite seems to come.
• 0:51
  Speaker 1: Yeah, so Jonathan Erickson is a superannuation and super fund
• 0:54
  Speaker 1: expert and joins me now. Good morning to you, Jonathan.
• 0:57
  Speaker 2: Good morning.
• 0:58
  Speaker 1: Good idea?
• 1:00
  Speaker 3: Yes. The good part of putting the age up to
• 1:04
  Speaker 3: 67 is a good idea, especially by three months each year,
• 1:09
  Speaker 3: because previously when it was at age 60, we put
• 1:12
  Speaker 3: it up to 65 at the beginning of this century,
• 1:16
  Speaker 3: and that was too quick for people to adjust to.
• 1:19
  Speaker 3: But the best idea, Andrew, you didn't actually put on,
• 1:21
  Speaker 3: which is that they're going to take the tax off
• 1:24
  Speaker 3: the superannuation. investments. Now that's something that was raised last
• 1:29
  Speaker 3: week but it is absolutely crucial because it means that
• 1:33
  Speaker 3: we can get an annuity program going back so that
• 1:37
  Speaker 3: insurers can pay regular monthly income to retired people and
• 1:43
  Speaker 3: thus keep their cash flow stable.
• 1:45
  Speaker 1: And it would mirror what they've proposed for the KiwiSaver
• 1:47
  Speaker 1: as well. Yes, correct. And the benefit about that is
• 1:52
  Speaker 1: the compounding nature of it all. Yes.
• 1:56
  Speaker 3: Yes, the whole point is that the compound interest at
• 1:58
  Speaker 3: the moment, a large chunk of that goes to the IID,
• 2:01
  Speaker 3: whereas this way people's retirement savings go up. The other
• 2:06
  Speaker 3: thing I liked about the policy is the fact that
• 2:08
  Speaker 3: they're going to keep the age of KiwiSaver at 65
• 2:12
  Speaker 3: when they put it up to 67. I'd suggest they
• 2:15
  Speaker 3: actually bring it down to 60 because a lot of
• 2:18
  Speaker 3: Pacific Islanders and Maoris need to retire early, not to
• 2:22
  Speaker 3: mention ambulance officers and chippies. because their bodies pack up.
• 2:27
  Speaker 3: And so if you freed up the money from age 60,
• 2:31
  Speaker 3: that would enable the economy to get a boost as well.
• 2:34
  Speaker 1: So you're saying from the KiwiSaver. So the KiwiSaver to 60.
• 2:37
  Speaker 3: Yes, just the KiwiSaver.
• 2:38
  Speaker 1: And the ANZ Super to 67. Meanwhile, the money that
• 2:42
  Speaker 1: we're actually making there from the compound and going back
• 2:44
  Speaker 1: into the Super and then, of course, invested, and then
• 2:47
  Speaker 1: we end up with a bigger fund.
• 2:49
  Speaker 3: Correct.
• 2:49
  Speaker 1: All right. Now, you mentioned the fact that some people's
• 2:52
  Speaker 1: bodies are completely wrecked and they need to retire earlier.
• 2:56
  Speaker 1: So they've talked about the compassionate access exemptions. Will they work? Yes,
• 3:01
  Speaker 1: they will.
• 3:01
  Speaker 3: It's actually quite draconian at the moment. It depends on
• 3:07
  Speaker 3: the IRD and the financial position for a lot of people.
• 3:10
  Speaker 3: They can't get their KiwiSaver out when they need it
• 3:13
  Speaker 3: simply because there's a gatekeeper there, which is the supervisor
• 3:18
  Speaker 3: of the KiwiSaver scheme. Whereas this way, if we open
• 3:22
  Speaker 3: that up, then again, it gives people more flexibility and
• 3:25
  Speaker 3: is more compassionate.
• 3:27
  Speaker 1: And the argument about cross-party support. Is it time for
• 3:31
  Speaker 1: everyone to stop fighting their corner and actually coming together?
• 3:36
  Speaker 3: It's long past that, Andrew. Long past that. I mean,
• 3:40
  Speaker 3: Sir Rob Muldoon stuffed it up in 1975 by stopping
• 3:44
  Speaker 3: the Labour scheme and putting the age of New Zealand
• 3:47
  Speaker 3: super down to 60. The country has never recovered from that.
• 3:51
  Speaker 3: So yes, it's long past that time.
• 3:54
  Speaker 1: I know it's not your field, but do you have
• 3:56
  Speaker 1: an opinion about the cut to the disability benefits?
• 4:00
  Speaker 3: Yeah, no, I'm opposed to any cuts at the moment.
• 4:03
  Speaker 3: The economy is really tight. I'm also opposed to putting
• 4:06
  Speaker 3: the KiwiSaver contribution rates up for the same reason. People
• 4:09
  Speaker 3: are hurting and we don't need any more burdens on
• 4:12
  Speaker 3: employees or employers. What we need is to boost the economy.
• 4:16
  Speaker 3: And these changes will help do that.
• 4:19
  Speaker 1: Jonathan, I thank you so much.
• 4:20
  Speaker 3: Wasn't Jonathan good?
• 4:21
  Speaker 1: Absolutely clear. Fantastic. Jonathan Erickson, he's a superannuation and superfund expert.