20 Aug 2014

Labour pushing later retirement age

5:25 am on 20 August 2014

The Labour Party is using the latest information on the state of the Government's books to push its policy of gradually raising the retirement age to 67.

The Treasury forecasts released yesterday in its Pre-election Fiscal Update project the cost of superannuation will grow by $3.4 billion between June last year and June 2018.

Labour Party leader David Cunliffe (right) and finance spokesperson David Parker outlining the KiwiSaver policy.

Labour's finance spokesperson David Parker, left, with leader David Cunliffe. Photo: RNZ / Diego Opatowski

If elected on 20 September, Labour would gradually phase in an increased retirement age of 67.

Anyone receiving a pension before 2020 would not be affected, but people turning 65 after 2020 would have to wait until they are 65 years and two months to get their entitlement. The retirement age would be raised by two months every year until it reaches 67.

Labour's finance spokesperson David Parker says pension costs, which make up about half of all social spending, need to be addressed.

"If you want an example of where fiscal responsibility starts that's it - that is the biggest growing cost centre that is controllable for Government."

New Zealand First leader Winston Peters.

New Zealand First leader Winston Peters. Photo: RNZ

New Zealand First supports keeping the retirement age at 65 and leaving it non-means tested. Leader Winston Peters says if Labour is elected, its plan to raise the retirement age by 2020 would not actually help it get back into surplus by its deadline of 2018.

Mr Peters says the failure to run a sound economy is the problem, not superannuation.

"At currently net 4.1 of GDP it is as a cost way below those countries that have a problem with respect to superannuation as against GDP itself."

A spokesperson for National's finance spokesperson Bill English says the party's policy of leaving the eligibility age at 65 is fully costed in its forecast and affordable.

National says it will be sticking to its promise to not raise the pension age.

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