Election 2014

27 Oct 2011

Labour plans to lift superannuation age to 67

6:46 pm on 27 October 2011

The Labour Party says it will raise the age of entitlement for superannuation to 67 by 2033 and plans to make KiwiSaver compulsory if elected in November.

Leader Phil Goff revealed the party's savings policy at its election campaign launch at Parliament on Thursday.

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At present, people are eligible for superannuation when they are 65 years old.

Under Labour's policy, the age of entitlement would rise gradually, starting in 2020 and hitting age 67 by 2033, affecting more than 2 million people of working age.

A transitional payment at the same rate as superannuation would be available to people who could not continue to work past 65.

At the same time, Labour is committing to maintaining the rate of superannuation at 66% of the average wage.

National Party leader John Key has committed to keeping the age of entitlement at 65 for as long as he is Prime Minister and says his party has fully funded the pension out to 2025.

But Mr Goff says keeping the age at 65 is not affordable - and New Zealanders know it.

"John Key is refusing to take the tough decisions to tackle these issues. This failure of leadership leaves our children and our grandchildren to pick up the tab.

"I will do what John Key won't - I'll do what is right for the future, rather than what's easy today."

Labour says raising the age to 67 would save the Government $100 billion over 20 years, from 2030. Mr Goff says New Zealand can't afford to just keep doing what it is doing, and must lift its savings and reduce debt.

KiwiSaver to be compulsory

The Labour Party also announced plans on Thursday to make savings scheme KiwiSaver compulsory for all workers from 2014.

The party would keep the minimum contribution from workers at 2%, while gradually lifting employers' contributions to 7% by 2022.

Labour says making KiwiSaver compulsory will help reduce the country's debt and create a bigger pool of national savings to invest in the economy.

Economic development spokesperson David Parker says increasing savings will benefit the entire economy.

"With more capital available for investment, productivity, GDP, exports, profits and wages all increase and interest rates drop."

Leader Phil Goff says Labour is prepared to take the tough decisions in the long-term interest of the country.

Pension plan 'a cruel joke'

National Party leader John Key says Labour's pledge to raise the pension age is a cruel joke that will force people to work two years longer to pay for its other promises.

Mr Key says the party has made a huge number of spending promises and now realises the books don't add up.

He says Labour is pretending that raising the super age will balance the books - but it won't kick in until after four elections - and its plan to employer contributions to KiwiSaver will cost jobs and help force businesses to the wall.