Te Ara Ahunga Ora Retirement Commission has been slammed as an "insular bureaucracy" which is completely unrealistic about the financial impact of its own pronouncements.
The comments come from the ACT Party, whose election policy for seniors makes clear the Commission's wings need to be clipped. This follows an increase in research by the Commission and a highly publicised switch in favour of retaining the current age of eligibility for superannuation at 65.
Previous retirement commissioners and the ACT Party itself have called for the age to be raised to protect governments against expensive future liabilities.
In its comments about the Commission, ACT is scathing.
"The state sector is full of quangos that achieve very little for the taxpayer funding poured into them," ACT says.
"The Retirement Commission is one such organisation, where significant time and resource is committed to writing policy and research that could easily be (and often is) replicated by other government departments.
"The Retirement Commission epitomises what one would imagine an insular bureaucracy would get up to. It writes long reports with recommendations that it has no power to implement, without any analysis of the trade-offs or fiscal implications of its recommendations."
ACT adds the resources spent on "national strategies and events calendars" could have gone straight to the back pockets of New Zealanders so that they can spend and save themselves.
It adds this is a shame, because an ageing population will need more support then ever.
"Instead, older people are being poorly served by an impotent bureaucracy."
To fix this problem, a reformed Retirement Commission would have to focus on retirement villages and in-home care.
The former role would deal with difficult issues that have been raised about retirement villages in recent debates, such as the effectiveness of disclosure statements, occupation right agreements, the maintenance of retirement village units and other matters.
Regarding in-home care, ACT wants the Commission to help develop a model for individualised funding of this service, rather than "requiring those who need in-home care to navigate a bureaucratic model of contracted health services managed by Te Whatu Ora."
It says this could develop a system which is suited to the particular needs of older people.
"Individualised funding can fit in with clients’ lifestyle and empowers them to make their own choices about service providers."
The Commission itself is not commenting on the ACT statement under a tradition that state agencies avoid entanglement with electoral arguments between competing political parties.
However, actions in the past suggest the Commission is setting out to do research that it says other state agencies are ignoring, rather than reinventing the wheel, as ACT suggests.
These include research on gender gaps in KiwiSaver, problems with financial literacy and retirement issues facing Maori and Pasifika.
The Commission has increased its research staff to better explore these issues.
12 Comments
The Retirement Commission is shallow and unrealistic not because it wants to keep the qualifying age of NZ Super at 65, but because it refuses to acknowledge that NZ Super is becoming unaffordable by going to many people already rolling in money.
Act postures as the party ready to take the knife to welfare payments, but just like its competitors National, NZ First, Labour, and the Greens, Act is silent on the need to limit the cost of NZ Super, not by raising the qualifying age, but by tailoring it to go to those who need it, not to those who don't.
The great offence against NZ Super by National and NZ First in 1998, with Labour's acquiescence, was to abolish the surcharge paid by the wealthy who signed up for NZ Super. From that day Super began to become unaffordable.
What is needed now is a party that has the guts to bring back a surtax. That can be done simply by making NZ Superannuation a tax-free benefit, but putting all who apply for it on a separate tax scale that would tax all other income at a high rate, perhaps 50%. Until Act embraces this policy, its claims to be slashing unneeded benefits are nothing more than attacks on the poor.
Susan St John and Claire Dale have already shown the way:
https://cdn.auckland.ac.nz/assets/business/about/our-research/research-…
These include research on gender gaps in KiwiSaver, problems with financial literacy and retirement issues facing Maori and Pasifika.
I personally would like to know more about these and think this is worthwhile, who else in the public sector should be doing that research if it wasn't them?
Universities - social scientists. In the public sector it should be parliament as a whole.
Why research financial literacy but not health literacy; why not research why short people are paid less than tall people; and why are left-handed people are more likely to have mental problems than right-handers. Why the arbitrary selection of issues needing commissioners?
What incentive does a commissioner have to actually solve their issue and make themselves unemployed?
Every dollar cut from the governments budget does not lead to an extra dollar in the pockets of taxpayers it actually leaves a dollar less as the governments spending is the source of the currency we pay our taxes with. We spend the governments money and it never spends ours because taxpayers are not the currency issuer, something that the ACT Party fails to understand.
Government spending creates a spending chain within the economy and with a fiscal multiplier it can be greater than the initial money spent. http://www.matchesinthedark.uk/resources-neo-colonialism-and-the-nhs/
Government budget deficits are also the only source of net financial assets to increase household savings. https://theconversation.com/how-government-deficits-fund-private-saving…
Government budget deficits also help to finance our current account deficits as sectoral balances describes. https://en.wikipedia.org/wiki/Sectoral_balances-
Taxation has several purposes but financing the governments spending is not one of them. Beardsley Ruml of the New York Fed summed it up when he said this, "since the end of the gold standard, "Taxes for Revenue are Obsolete". The real purposes of taxes, he asserted, were: to "stabilize the purchasing power of the dollar", to "express public policy in the distribution of wealth and of income", "in subsidizing or in penalizing various industries and economic groups" and to "isolate and assess directly the costs of certain national benefits, such as highways and social security". https://en.wikipedia.org/wiki/Beardsley_Ruml
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