John Armstrong: Gutless politicians won't tackle pension crisis, we need a Royal Commission

It is never going to happen. And more's the pity.

Our political editor had a go at Bill English over how he thought the baby boomers weren't paying their fair share of it. Source: Q+A

But a royal commission of inquiry now looks ever more essential in filling the gaping vacuum left by gutless politicians who refuse to confront the looming crisis in the funding of state pensions.

Such an august body - or something very akin to it - is needed to provide a comprehensive and impartial assessment of whether New Zealand is at serious risk of a fiscal meltdown from the super-sized superannuation bills which will fall due in coming years.

Source: 1 NEWS

In the week or so since the Prime Minister floated his intention to raise the age of eligibility for state-funded super payments from 65 to 67, politicians in parties other than National have shared one thing in common.

They have effectively abdicated. They have either castigated Bill English for raising a matter which they deem (correctly) to be equivalent to juggling dynamite.

Or they have taken the view that raising the age of eligibility solves the problem.

In other words, she'll be right. To put it bluntly, they are not doing their job.

But as long as they all agree to do nothing, the problem can be swept under the carpet.

English's crime was to break this self-serving gentleman's agreement. He certainly deserves credit for making even a limited excursion into what is universally acknowledged to be the Valley of Death in political terms.

But any medal for political bravery must put on hold given his tinkering with pension eligibility will not take effect for another 20 years.

In the meantime, everyone can pretend that existing pension entitlements will remain affordable.

This is nonsense. Anyone spouting it should be given a one-way ticket to La-la land.

For starters, politicians don't factor in the equally humongous demands which will be placed on the health budget if they still want to keep services to the elderly at current levels. That population cohort is rapidly expanding and it already uses the lion's share of such services.

This is is not Affordability Street. It is the road to penury.

The Treasury has said as much, although far more politely. Its crystal-ball gazing is persuasive in arguing that maintaining current entitlements and eligibility for the state pension will require trade-offs.

Those include such things as increases in taxes, new taxes, less government spending in other areas, raising the age of eligibility, changing the way payments are indexed, or applying an income or asset test.

The Treasury is also insistent that whatever trade-offs are favoured, they need to take effect now, rather than when it might be politically convenient. The latter stipulation is another way of saying "never".

Acutely conscious that its political masters will find nothing that is politically appetising in its smorgasbord of trade-offs, the Treasury prefers to talk about "options''. Rather than backing its ministers into a corner by making hard and fast recommendations.

The result is that the Treasury is only really gently prodding whoever is the government of the day towards making the desired response.

No such constraint would apply to a royal commission.  It could do or say what it liked.

What is important is the status and authority imbued in a royal commission as of right, and, even more crucially, the weight and moral suasion of its findings and recommendations.

1 NEWS Political Editor Corin Dann and Political Reporter Katie Bradford examine the Govt's big plan to increase the age to 67. Source: 1 NEWS

A royal commission might not tell us anything more than what is already contained in the truck-load of reports produced by a plethora of working parties, periodic review groups and task forces that various governments have set up to examine superannuation policy.

The big difference is that it is far more difficult for a government to ignore or brush aside the views expressed by a royal commission.

The findings of a task force may be history by the following day's news cycle. The findings of a royal commission are etched in history and remain a major reference point for as long as the subject matter at hand stays on the political agenda.

Were a royal commission to develop a more realistic and sustainable pension model, that could be a first step in building a much-needed consensus across Parliament.

But that is not going to happen. Handing control of policy levers to outsiders is simply not part of the mindset of Cabinet ministers.

Their prime consideration is to concede nothing that might end up being to their opponents' advantage.

Being successful in politics demands control of everything that can be controlled. It demands control of the day-to-day agenda.

We sampled public opinion about whether Super age change policy have public support come election time. Source: 1 NEWS

That thinking was evident in this week's argy-bargy between English and Andrew Little on the merits of cutting taxes versus spending more on fixing dilapidated parts of the country's social infrastructure.

Next to no light was shed on the detail which the two major parties will put in front of voters at September's election.

It was a case of staking out the territory upon which those parties intend fighting the election campaign. It was a matter of putting some pegs in the ground in advance.

National needed to send a message that revised forecasts of the Budget surplus meant tax reductions, more particularly changes in tax thresholds, were now part of the mix.

Labour needed to send a message that it would not be raising taxes. It had to assure voters that the Greens' penchant for both newer and higher taxes will not be part of the mix it would be pushing at coalition negotiations after the election.

This ritualistic dance was testimony that political parties will be consumed by the short-term this side of September.

The focus on the short-term is yet another excuse for ignoring the long-term, however.

In the context of seriously flawed pension policy, the current talk about tax levels is about as useful and relevant as auctioning off the deck-chairs on the Titanic just as it began to sink beneath the waves.

MOST
POPULAR STORIES


Auckland Transport proposes 30km/h zone for city centre

Auckland Transport (AT) is looking at lowering speeds in the city centre, in a move they say will "improve road safety for the large number of people walking, cycling and living in the area."

They have proposed a 30km/h zone around the CBD which will be consulted on as part of a speed bylaw review in November.

AT says the move is part of its work to improve road safety in Auckland, where one person dies and two are seriously injured on the roads each week.

AT's Group Manager Network Management and Safety, Randhir Karma, says many of the crashes in the city centre involve vulnerable road users.

"Eighty-four per cent of all crashes involve vulnerable road users. Nearly half of the crashes involve people walking and this is not acceptable.

"If a person walking is hit by a vehicle travelling at 30km, the chance of dying is 10 per cent. At 50km, the chance of dying is 80 per cent," he says.

AT say they're currently determining the exact locations for the start of the lower speed limit and what physical changes would need to be implemented.  

Auckland CBD Source: Seven Sharp

TODAY'S
TOP STORIES

Rising jet fuel prices could lower Air New Zealand's profit

High jet fuel prices could be affect Air New Zealand's profits in 2019. 

Recent changes in jet fuel prices have outpaced the $US85 ($NZ127.35) per barrel Air New Zealand had assumed in it's financial year earnings for 2019, chairman Tony Carter said today.

"As we look forward to the year ahead, we are optimistic about market dynamics and demand trends, but note that the current levels of jet fuel price will be a headwind on profitability compared to the prior year," Mr Carter told Reuters.

Airline companies around the globe are expected to be affected financially, with jet fuel prices rising to $US93.81 ($NZ140.57) per barrel.

As a result of higher fuel prices, pretax profit was expected to fall up to 21 per cent from $540 million in 2017 in the current financial year, according to Air New Zealand.

The airline's shares have also fallen 1.6 percent to a seven-month low in the market.

An Air New Zealand plane.

TODAY'S
FEATURED STORIES

Wellington bus drivers vote for 'ongoing' strike if collective agreement not reached in a month

Hundreds of Wellington region bus drivers have voted for an "ongoing" strike if a collective agreement is not reached by October 23, just under a month away.

Tramways Union Wellington says companies facing industrial action are Tranzurban Wellington and Hutt (Tranzit), Uzabus and NZ Bus.

Drivers have also passed a unanimous vote of no confidence in the Greater Wellington Regional Council and called for a commissioner to take over the region’s public transport.

Tramways Union secretary Kevin O’Sullivan says the strike is a matter of last resort.

"We have been trying to get Tranzit to negotiate for months and still have no offer from them or any indication they are taking the bargaining seriously. This is why we have now had to set a deadline," Mr O'Sullivan said.

"Meanwhile the GWRC has been telling us everything is fine and refusing to hold their contractors to account for their lack of good faith. It’s become clear that the council has no intention of fixing the industrial dispute or the public transport system. They need to have it taken away from them before they make matters worse.

"There is no way that Wellington’s bus system can be fixed without a fair deal for drivers. Until this is settled the driver shortage will continue, the industrial action will continue, and drivers will continue to have no reason to even try to make this broken system work," he said.

"We don’t want to make life harder for Wellington commuters, the council has already done enough of that, but if we don’t take a stand things are only going to get worse for everyone. I think the people of Wellington understand that which is why our members have had so much support."

Mr O’Sullivan said he wanted to wait and see if a collective agreement is reached before commenting on how long drivers were prepared to strike for.

A spokesperson for bus operator Tranzit said negotiations have been underway with Tramways Union Wellington for two weeks, following talks between both parties that started last year.

The spokesperson, who did now want to be named, denied the union comment that Tranzit is not taking negotiations seriously.

"Tranzit is not involved in tit for-tat. Negotiations are just that - dialogue. The onus is on getting it right," he said.

The spokesperson said he didn’t think a strike by Tranzit members, if it were to happen, would have a significant impact.

A Uzabus spokesperson said negotiations were underway between the company and Tramways Union but referred further questions to Greater Wellington Regional Council.

NZ Bus has been contacted for comment.

Many are calling on central Government to fix the capital’s public transport woes.
Source: 1 NEWS


Man who took two human toes from Auckland exhibition avoids conviction

A judge has thrown out one charge laid against a man who stole two human toes from an Auckland exhibition and discharged him without conviction on the other.

Joshua Williams, 28, appeared for sentence in the Wellington District Court on charges of interfering with a dead body and theft of the toes.

However, Judge Bill Hastings said in an earlier case the Supreme Court had ruled a dead body did not constitute property, which meant the toes taken by Mr Williams could not legally be deemed to be stolen.

He was concerned the stigma attracted by a conviction for interfering with a dead body would be out of all proportion to the gravity of what Mr Williams did.

Judge Hastings said that conjured an image of someone digging up graves in a cemetery at night, when all Mr Williams had done was pluck two toes from a plastinated body.

rnz.co.nz

Joshua Williams in the Wellington District Court. Source: rnz.co.nz