Latest news with #NZSuper
Otago Daily Times
02-07-2025
- Business
- Otago Daily Times
Opinion: regressive Super step
The debate over raising the New Zealand Superannuation (NZ Super) age has sparked widespread concern and for good reason. While proponents argue it's necessary for fiscal sustainability, evidence shows such a move would be deeply unfair and regressive, disproportionately harming vulnerable communities. This concern has been expressed to me by constituents in South Dunedin, Green Island and in Mosgiel, where a large portion of the population includes retirees and workers from physically demanding industries. Raising the superannuation age would have a particularly harsh impact. Economist Craig Renney highlights the human cost behind the numbers. Raising the super age to 67 would mainly benefit wealthier, predominantly Pākehā New Zealanders, who hold the largest KiwiSaver balances and accumulated wealth. In contrast, Māori, Pasifika, and those in physically demanding, lower-paid jobs — with fewer savings— would suffer the most. The disparity is stark: a Pākehā male might lose about 15% of expected superannuation, but a Māori male, facing shorter life expectancy, could lose 25%. This is not just a financial issue but one of equity and social justice, as raising the retirement age would worsen inequalities by penalising those who have worked hardest and lived shortest. Much of the talk about NZ Super's "unaffordability" is overstated. Treasury data shows we currently spend about 4.4% of GDP on superannuation, much less than countries like Germany (10%), France (13.4%), or the OECD average (7.7%). Even with an ageing population, projections suggest only a modest increase of about 1% of GDP by 2050. This indicates no fiscal crisis demanding drastic cuts or raising the super age. Instead, it reflects a manageable cost aligned with the commitment to dignified retirements for all New Zealanders. NZ Super is more than a payment; it's a social insurance policy preserving dignity and choice for seniors. While means-testing might seem appealing, it introduces inefficiencies and administrative burdens, especially as seniors' needs grow more complex. Universal superannuation effectively addresses rising pensioner poverty, soaring housing costs and the reality that many seniors rent or struggle with energy bills. Targeted support risks missing those in need or arriving too late. Te Pāti Māori's call to lower the super age for Māori reflects real disparities in life expectancy and work conditions. Although Labour opposes different super ages by ethnicity, raising the age would disproportionately harm Māori and Pasifika communities. Acknowledging these disparities is essential to crafting policies that reduce inequality. Raising NZ Super's age is a regressive policy that would deepen inequality and hurt the most vulnerable. As a society, we must decide whether to support seniors who have contributed throughout their lives or penalise them for circumstances beyond their control. This debate must ensure NZ Super remains a cornerstone of social justice.
Otago Daily Times
29-06-2025
- Business
- Otago Daily Times
The dollars and sense of introducing capital gains taxation
Tony Fitchett questions the maths on capital gains and property taxes. Gerrard Eckhoff (Opinion ODT 9.6.25), railed against the possible introduction of a capital gains tax "and its numerous close relatives — the land tax, the wealth tax, asset tax, inheritance tax which all hover over those who choose to take a risk to benefit themselves and their families". He claims that advocates of higher taxes ("the Left" and "the tax and spend gallery of the envious") "believe that a CGT is needed to offset what they see to be the original sin of being productive and successful". That description of those arguing for CGT and/or wealth tax is about as accurate as his arithmetic, as in: "land or a building in 50 years' time will be worth a few thousand percent more than its value today ... so a $3 million home will be commonplace". Taking "a few" as three, adding 3000% to the current average house price of $914,000 would make $28.3m, not $3m. New Zealand at present suffers from low tax income, significantly less than comparable OECD countries, and inadequate for funding its essential social services: education, healthcare, housing for the poor, and support of the disabled, sick, and unemployed, not to mention NZ Super, let alone paying for its planned defence spending growth. He seems to regard any form of taxation of capital acquired through business as evil, comparing it to "demanding money with menaces", and asks "why it is so wrong to be able to sell your main asset untaxed after a lifetime of work and retire with some discretionary spending money?". He doesn't show, though, why it is acceptable to tax every dollar earned by those on the minimum wage (or less), who often struggle to buy food, housing, and heating, but not the capital generated by their hard work, and eventually realised, mostly tax-free, by their employers. Most OECD countries have a CGT, as well as steeper progressive income tax rates — Australia (which is attracting many of our young people) doesn't tax the first $18,200 earned, but has a top marginal income tax rate of 45%, plus 2% Medicare levy, on income over $190,000, compared to NZ's 39% on income above $180,000. It has a CGT (allowing for inflation, excluding the family home). Many OECD countries also have inheritance tax, ranging from 4% (Italy) to 80% (Belgium). New Zealand already has a CGT, on rental property resale, though the present government severely reduced its scope. It could be extended to cover most realised capital profit (perhaps exempting owner-occupied homes), but that would take significant time to introduce and to start producing significant tax income. A form of real-property tax, as proposed by economist Susan Edmunds in 2020, which would deem the value of real estate above a personal exemption threshold to be capital invested and earning a notional income, to be taxed at that taxpayer's marginal rate, could be implemented quickly, as property values are regularly measured, and the IRD could easily incorporate the necessary calculations into its systems. An inheritance tax should also be considered, which, as Thomas Picketty has argued, would restrain the inequality explosion New Zealand has suffered over the last 40 years. Mr Eckhoff claims "Few members of the Left have ever owned and run a business, so simply do not understand the implications of extra taxation of small businesses." I was once an owner-operator of a small business and an employer. The most difficult tax problem I had wasn't business-related but personal: managing the provisional tax system with a marginal tax rate of 66% (that dates me) on my personal earnings. Personal-realised CGT, and property and inheritance taxes, aren't taxes on a business. They are taxes on individuals' income and assets, whether earned by daily work or by capital gain. IRD research shows that from 2015 to 2021, while middle-income New Zealanders paid, including GST, an effective tax rate of 20.2% on their personal income, the equivalent for the wealthiest, thanks to realised capital gains and use of trusts, was 9.2%. Is that fair, Mr Eckhoff? • Tony Fitchettis is a retired doctor.
Scoop
25-06-2025
- Business
- Scoop
Thousands of over-65s earn more than $200,000 - should they get NZ Super?
More than 9000 people aged over 65 earn more than $200,000 a year, and another 33,000 earn between $100,000 and $200,000 - and the Retirement Commissioner says it's fair to question whether they should be able to claim NZ Super as well. The data comes from the 2023 Census. The number earning between $150,000 and $200,000 has decreased from 2018 but the number earning between $100,000 and $150,000 has lifted by 10,000. The Census also showed that the number of people over 65 still in the workforce had increased. Just over 24 percent of people aged over 65 were in work, up from 22.1 percent in 2013. The biggest increase was among people aged 70 to 74. Retirement Commissioner Jane Wrightson is opposed to putting up the age of eligibility for NZ Super. She said if there were questions about the cost or fairness of the scheme, they needed to be addressed with a package of measures. "Then you absolutely have to look at means-testing again. It's really unpopular but it would be improper if we didn't look at all the sensible options if the goal is to reduce the cost to the state." She said the problem to be solved needed to be defined and then the possible solutions assessed. "Means testing is absolutely one of those options but politicians run away from it because it's got a pretty ugly history and it does make it a more complex system. There's no doubt about it, people will start arranging their affairs and start avoiding tax and all that kind of stuff. "But if you boil it down to a very simple thing - is it right that someone earning over $180,000 or $200,000 - I think $180,000 is probably about the mark because that's when the tax rates go up - is it right that people out there earning over $180,000 can also acquire Super, it's an extremely good question." She said it would be easy to capture the earnings of people being paid a salary while receiving NZ Super but much harder to assess other income. "It's both complicated and it's easy. The easiest thing is to leave well alone. The next easiest thing is to just put the age up but that is too easy because there is harm attached to that…. So that's what I'm talking about when I say please could we have a package if we do any system change at all and can we please stop talking about this as single issue?" She said there should be a cross-party political conversation to determine a path forward. University of Auckland associate professor Susan St John earlier outlined a plan to treat NZ Super as a tax-free basic income grant and put recipients on a higher tax rate. She said it would be a better option than the age of eligibility or the amount paid. It would create a situation where there was a break-even point beyond which people would be better off, on a net basis, not claiming NZ Super and instead being taxed at standard rates. She said the tax scales she had modelled were less harsh than the abatement that applied to people receiving a benefit. The government has introduced parental income tests for young people receiving the JobSeeker benefit and will restrict access to the member tax credit in KiwiSaver to those who earn more than $180,000. St John said the reason that similar moves weren't made on NZ Super might reflect historical attitudes towards the "deserving and undeserving". She said NZ Super was effectively income-tested through the tax system because people who were earning other income would pay higher rates of tax. "Just far less draconian than the clawbacks for children with Working for Families and adults in the benefit system." Simplicity chief economist Shamubeel Eaqub said means and income testing in Australia meant that only about 60 percent of the population would qualify for the pension. If that were true in New Zealand, it could save about $9b a year. There are 74,850 people aged 30 to 64 earning more than $200,000. The median income for people aged over 65 is $26,600.
1News
25-06-2025
- Business
- 1News
Thousands of over-65s earn over $200,000 — should they get NZ Super?
More than 9000 people aged over 65 earn more than $200,000 a year, and another 33,000 earn between $100,000 and $200,000 – and the Retirement Commissioner says it's fair to question whether they should be able to claim NZ Super as well. The data comes from the 2023 Census. The number earning between $150,000 and $200,000 has decreased from 2018 but the number earning between $100,000 and $150,000 has lifted by 10,000. The Census also showed the number of people over 65 still in the workforce had increased. Just over 24% of people aged over 65 were in work, up from 22.1% in 2013. The biggest increase was among people aged 70 to 74. Retirement Commissioner Jane Wrightson is opposed to putting up the age of eligibility for NZ Super. ADVERTISEMENT She said, if there were questions about the cost or fairness of the scheme, they needed to be addressed with a package of measures. "Then you absolutely have to look at means-testing again. It's really unpopular but it would be improper if we didn't look at all the sensible options if the goal is to reduce the cost to the state." She said the problem to be solved needed to be defined and then the possible solutions assessed. "Means testing is absolutely one of those options but politicians run away from it because it's got a pretty ugly history and it does make it a more complex system. There's no doubt about it, people will start arranging their affairs and start avoiding tax and all that kind of stuff. "But if you boil it down to a very simple thing – is it right that someone earning over $180,000 or $200,000, I think $180,000 is probably about the mark because that's when the tax rates go up – is it right that people out there earning over $180,000 can also acquire Super? It's an extremely good question." She said it would be easy to capture the earnings of people being paid a salary while receiving NZ Super but much harder to assess other income. "It's both complicated and it's easy. The easiest thing is to leave well alone. The next easiest thing is to just put the age up but that is too easy because there is harm attached to that... So that's what I'm talking about when I say please could we have a package if we do any system change at all and can we please stop talking about this as single issue?" ADVERTISEMENT She said there should be a cross-party political conversation to determine a path forward. 'Deserving and undeserving' University of Auckland associate professor Susan St John. (Source: RNZ / Cole Eastham-Farrelly) University of Auckland associate professor Susan St John earlier outlined a plan to treat NZ Super as a tax-free basic income grant and put recipients on a higher tax rate. She said it would be a better option than the age of eligibility or the amount paid. It would create a situation where there was a break-even point beyond which people would be better off, on a net basis, not claiming NZ Super and instead being taxed at standard rates. She said the tax scales she had modelled were less harsh than the abatement that applied to people receiving a benefit. ADVERTISEMENT The Government has introduced parental income tests for young people receiving the JobSeeker benefit and will restrict access to the member tax credit in KiwiSaver to those who earn more than $180,000. St John said the reason that similar moves weren't made on NZ Super might reflect historical attitudes towards the "deserving and undeserving". She said NZ Super was effectively income-tested through the tax system because people who were earning other income would pay higher rates of tax. "Just far less draconian than the clawbacks for children with Working for Families and adults in the benefit system." Simplicity chief economist Shamubeel Eaqub said means and income testing in Australia meant that only about 60% of the population would qualify for the pension. If that were true in New Zealand, it could save about $9b a year. There were 74,850 people aged 30 to 64 earning more than $200,000. The median income for people aged over 65 was $26,600. ADVERTISEMENT
RNZ News
25-06-2025
- Politics
- RNZ News
The Panel with Deborah Hart and Richard Pamatatau Part 1
Tonight on The Panel, Wallace Chapman is joined by panellists Deborah Hart and Richard Pamatatau. They discuss the idea that NZ Super should be measn tested. they do it in Australia, why not here? Also on the cards is outrage in Hawkes Bay over proposed hikes to water rates: some locals might find themsleves forking up to 7 and a half thousand bucks a year. To embed this content on your own webpage, cut and paste the following: See terms of use.
