What will happen to National now?

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#3086948 9-Jun-2023 14:41

Rikkitic:

I am not arguing that having children is affordable. I am arguing that your claim of population collapse is ridiculous.

It's not so much the collapse, it's the pain that's coming. At the moment I think we have 1 retiree to 7 workers. In a couple of decades that drops to 1 in 4.

That's where the real pain is. Imagine the income tax required to keep superannuation going. NB, this is not NZ specific either, but we have probably passed the point of no return, IE the ones that need to have kids now are likely too old.

We will need migrants to come in and hope they have kids too, and aren't put off by low wages and high costs.

Please note this isn't anti boomer or ageism, it's a reality. Our population is ageing, really quickly. And whilst plenty over 65 will keep working, it's going to get top heavy really suddenly.

sir1963

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#3086950 9-Jun-2023 15:00

mudguard:

Rikkitic:

I am not arguing that having children is affordable. I am arguing that your claim of population collapse is ridiculous.

It's not so much the collapse, it's the pain that's coming. At the moment I think we have 1 retiree to 7 workers. In a couple of decades that drops to 1 in 4.

That's where the real pain is. Imagine the income tax required to keep superannuation going. NB, this is not NZ specific either, but we have probably passed the point of no return, IE the ones that need to have kids now are likely too old.

We will need migrants to come in and hope they have kids too, and aren't put off by low wages and high costs.

Please note this isn't anti boomer or ageism, it's a reality. Our population is ageing, really quickly. And whilst plenty over 65 will keep working, it's going to get top heavy really suddenly.

And there-in lies the problem, we keep on insisting that Farming and Tourism will save us. They WON"T, they both low wage industries.

We need to be moving into a high tech, high profit, high wage economy.

Our economy relies on the world for trade, finance, technology, etc etc etc, so we are paying "international prices", its not that things are too expensive, its that our wages are too low, but until we get the "backbone of the country" off us we will NEVER progress and things will only get worse.

The government should be funding territory education in Science ,Technology, engineering, programming, etc, instead they keep under funding it more and more with every below inflation increase they provide.

The only thing making NZ unaffordable is the low wage economy that people in this country insist on keeping.

Rikkitic

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#3086951 9-Jun-2023 15:03

To my mind, this issue is not just about the cost of raising children/having families. I don’t dispute that the cost is considerable, but I think this focus is too narrow.

First, there is no way the population will significantly decline due to this cost. People will always look for ways around obstacles to their demands. Politics will always respond to sufficient public pressure. What is true today will not necessarily be so tomorrow.

Second, when things get difficult, people need to learn to think outside the box. Large-scale adoption from overseas is a win-win proposition. It gives orphaned children a chance at life and it gives the adoptive parents the joys they would experience from their own biological children. For some, this would require a shift in attitude, but there is no real reason why adopted children cannot be every bit as fulfilling as natural ones. Survival of the species is not at stake. There is no need for everyone to keep reproducing their own genes.

Third, once the principle of mass adoption is accepted, governments could introduce financial incentives making such families more affordable. Why not? The lifelong carbon burden and other environmental costs of having your own children has been well documented. Is it not much more socially responsible to have other people’s? Why shouldn’t this behaviour, that benefits everyone, be rewarded?

Finally, thinking outside the box also means thinking beyond the confines of national boundaries. What makes a Kiwi, or anyone else, is not race or genetics. It is upbringing and cultural values. Kiwis can come from anywhere and many have. Looking beyond our borders, there is no lack of potential citizens to make up any local shortfall. Breeding is not the only way to fix this. It is not even a good way. Especially in the longer term.

@mudguard: I wrote this before seeing your post. You raise a valid point but it is a different issue and requires a different response. I don't believe endless growth is the answer to anything. It just displaces the crisis and makes it bigger when it comes.

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GV27

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#3086955 9-Jun-2023 15:18

Rikkitic:

Second, when things get difficult, people need to learn to think outside the box.

I think you'll find young Kiwis have plenty of experience with compromising because things are 'getting difficult'. We've been doing it for our entire adult lives.

We are talking about population that is already well below the basic fertility replacement rate becoming more and more expensive. If the people who are currently keeping that average at 1.6 decide en masse that a second child and the extra $20k of daycare fees they'd have to find, that number will drop real quick. My claim was 'a few generations'. If this continues for 90 years - yes, our population would be in a tail spin. But thanks to immigration we can't support, we can pretend that isn't a problem at all.

To be blunt about it, there is a relatively small window in people's lives where they have the financial security to provide a loving up-bringing for a child and enough of their own life-expectancy left to be present parents during formative years. People have already put off having kids later and later to get the same basic footholds other generations were able to obtain relatively young, and not only will that create pressure on women to have children later and fewer of them, but it comes with far more risk health-wise for mother and baby, as well as the likelihood of having a father who is dead before you turn 21. Biological clocks don't stop, no matter of 'people can adapt' changes that basic reality.

E: Also, I'll point out the fact that someone else somewhere else had a child that needs to be looked after doesn't somehow trump or invalidate my desire to have my own child - which isn't something I particularly need to justify or defend. If you have to go that far to normalise the state things are in this country then that's sort of... well... terrifying.

Rikkitic

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#3086964 9-Jun-2023 15:41

I take your points. I don't agree with them but I think we have both made our cases. Time to move on.

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ockel

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#3086992 9-Jun-2023 16:46

mudguard:

It's not so much the collapse, it's the pain that's coming. At the moment I think we have 1 retiree to 7 workers. In a couple of decades that drops to 1 in 4.

That's where the real pain is. Imagine the income tax required to keep superannuation going. NB, this is not NZ specific either, but we have probably passed the point of no return, IE the ones that need to have kids now are likely too old.

And thats why we need to change the age of eligibility for NZS. We changed the system in 1977. We changed it in 1992 and then rapidly from 1993-2001 (in three month blocks). Australians think we're incredibly lucky to have such a generous superannuation system at present.

Age eligibility should be related to life expectancy not some arbitrary age. Our life expectancy has increased and as such the burden of supporting in the sunset years has changed significantly cos for many they're no longer sunset but still "golf in the late afternoon sun" years. And if you're in a health-inequality group then your NZS starts earlier than those that have had better health outcomes.

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tdgeek

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#3088005 9-Jun-2023 18:08

ockel:

And thats why we need to change the age of eligibility for NZS. We changed the system in 1977. We changed it in 1992 and then rapidly from 1993-2001 (in three month blocks). Australians think we're incredibly lucky to have such a generous superannuation system at present.

Age eligibility should be related to life expectancy not some arbitrary age. Our life expectancy has increased and as such the burden of supporting in the sunset years has changed significantly cos for many they're no longer sunset but still "golf in the late afternoon sun" years. And if you're in a health-inequality group then your NZS starts earlier than those that have had better health outcomes.

Makes a lot of sense. Perhaps harder to quantify.

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ockel

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#3088032 9-Jun-2023 20:26

tdgeek:

ockel:

And thats why we need to change the age of eligibility for NZS. We changed the system in 1977. We changed it in 1992 and then rapidly from 1993-2001 (in three month blocks). Australians think we're incredibly lucky to have such a generous superannuation system at present.

Age eligibility should be related to life expectancy not some arbitrary age. Our life expectancy has increased and as such the burden of supporting in the sunset years has changed significantly cos for many they're no longer sunset but still "golf in the late afternoon sun" years. And if you're in a health-inequality group then your NZS starts earlier than those that have had better health outcomes.

Makes a lot of sense. Perhaps harder to quantify.

Not at all. If you're Maori or Pasifika and your life expectancy is lower then the threshold for receiving NZS is lower. Great incentive for Govts to reduce the health inequity when the long tail cost balloons.

If the L.E. of a European/Asian male is 87 years then NZS kicking in at 72 seems reasonable (for example). And if you're a Maori/Pasifika male with a L.E of 77 then NZS starts at 62. In both cases the pension is designed, on average, to cater to the last 15 years of life expectancy.

= I'm happy to debate the concept but not the ages as they are deemed arbitrary here as they will be applicable from DOB and constantly adjusting depending on when you were born.

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mudguard

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#3088146 10-Jun-2023 07:06

ockel:

Not at all. If you're Maori or Pasifika and your life expectancy is lower then the threshold for receiving NZS is lower. Great incentive for Govts to reduce the health inequity when the long tail cost balloons.

If the L.E. of a European/Asian male is 87 years then NZS kicking in at 72 seems reasonable (for example). And if you're a Maori/Pasifika male with a L.E of 77 then NZS starts at 62. In both cases the pension is designed, on average, to cater to the last 15 years of life expectancy.

I can see that getting murky really quickly. All of a sudden someone who has been European/Kiwi all their lives but is 1/16th Maori may make a choice.

The retirement age will have to move, there's no question. Improving Maori/Pasifika health is a no brainer as well.

tdgeek

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#3088155 10-Jun-2023 07:59

ockel:

Not at all. If you're Maori or Pasifika and your life expectancy is lower then the threshold for receiving NZS is lower. Great incentive for Govts to reduce the health inequity when the long tail cost balloons.

If the L.E. of a European/Asian male is 87 years then NZS kicking in at 72 seems reasonable (for example). And if you're a Maori/Pasifika male with a L.E of 77 then NZS starts at 62. In both cases the pension is designed, on average, to cater to the last 15 years of life expectancy.

= I'm happy to debate the concept but not the ages as they are deemed arbitrary here as they will be applicable from DOB and constantly adjusting depending on when you were born.

Many Euro's have issues, they have a lower LE, it comes to what is fair. Fair or averagely fair. As mentioned already what about those with 5% or 35% Maori-Pasifika heritage. The concept is good but many variables, I guess it could be fine tuned with just a few caveats. Medical history and any mixed heritage. A standard medical test and a heritage range. Not too many variables, but it seems a bit fairer, although as stated, still murky.

Technofreak

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#3088175 10-Jun-2023 11:38

ockel:

And thats why we need to change the age of eligibility for NZS. We changed the system in 1977. We changed it in 1992 and then rapidly from 1993-2001 (in three month blocks). Australians think we're incredibly lucky to have such a generous superannuation system at present.

One significant factor needs to be acknowledged here is that for a long time now (much, much longer than we've had Kiwi Saver) the Australian's have had a pretty good and compulsory superannuation scheme (like Kiwi Saver on steroids). It has a higher contribution rate both from the employee and the employer.

There isn't the same need in Australia for government super like we have.

We could have had a similar scheme to Australia, in fact we did, but Robert Muldoon scrapped it. If I recall correctly it was something he campaigned on and the voters effectively agreed. Penny wise pound foolish now we pay the price of needing a "generous" govenment super scheme. Though I doubt anyone who relies on it would call it generous.

Any changes to the government super should be coupled to improving Kiwi Saver, for example, by increasing the mandatory contributions so that eventualy there is no need for the government super.

Any super scheme needs to be competely divorced from government involvement as such that the government cannot get their greedy fingers onto any of the money and appropriate it for other uses as has happened in the past where super contributions that were part of your tax have ended up being used elsewhere in the consolidated fund.

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GV27

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#3088199 10-Jun-2023 13:32

Technofreak:

Any changes to the government super should be coupled to improving Kiwi Saver, for example, by increasing the mandatory contributions so that eventualy there is no need for the government super.

This doesn't work in an economy where saving is a luxury in the first place. An extra 3% of people's incomes here for money they can't access until 65 when you're on the bones of your arse here, an extra 1.6% unemployment levy there... people are very good at declaring taxes for some things should be mandatory but people only get to live off their net pay, not their gross.

And that is getting harder and harder with each passing day, not helped by the government refusing to index and trying to politicise adjusting the tax system for inflation it mandates into existence with RBNZ as as 'tax cut'.

And it would be entirely on brand for Kiwis to think this would be the thing to do, when the real glaring difference between Aus and NZ Super schemes is that the Australians are taxed on exit, and we rob ourselves of the accumulated benefit of the earnings over our entire working careers by paying tax on income earned each year. Compounding returns are the most powerful force in the universe, and we're pretending they don't exsit so the state can jack up the tax take.

Technofreak

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#3088274 10-Jun-2023 22:50

GV27:

Technofreak:

Any changes to the government super should be coupled to improving Kiwi Saver, for example, by increasing the mandatory contributions so that eventualy there is no need for the government super.

This doesn't work in an economy where saving is a luxury in the first place. An extra 3% of people's incomes here for money they can't access until 65 when you're on the bones of your arse here, an extra 1.6% unemployment levy there... people are very good at declaring taxes for some things should be mandatory but people only get to live off their net pay, not their gross.

And that is getting harder and harder with each passing day, not helped by the government refusing to index and trying to politicise adjusting the tax system for inflation it mandates into existence with RBNZ as as 'tax cut'.

And it would be entirely on brand for Kiwis to think this would be the thing to do, when the real glaring difference between Aus and NZ Super schemes is that the Australians are taxed on exit, and we rob ourselves of the accumulated benefit of the earnings over our entire working careers by paying tax on income earned each year. Compounding returns are the most powerful force in the universe, and we're pretending they don't exsit so the state can jack up the tax take.

So we just keep kicking the can down the road?

One way or another we have to pay for Superannuation. Sure there would be some pain with an increase in contributions but also there should eventualy be a reduction in the tax burden.

You make some good points especially around compound returns and taxation. My suggestion of increasing the contributions isn't the only improvement available. Your suggestion about how it's taxed is another one. I think all super contributions should be tax free, in other words the employees contributions are taken out before tax and the employer can gain a tax write off on the employer contributions. We should be making very effort to encourage the adoption a a system like Kiwi Saver as in the long term it will reduce/remove the need for government super.

The mandatory contribution levels could/should be increased slowly over time to reduce the immediate impact on take home pay. We need to ensure that Kiwi Saver provides a worthwhile income for peoples retirement.

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GV27

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#3088367 11-Jun-2023 11:14

Technofreak:

We should be making very effort to encourage the adoption a a system like Kiwi Saver as in the long term it will reduce/remove the need for government super.

The mandatory contribution levels could/should be increased slowly over time to reduce the immediate impact on take home pay. We need to ensure that Kiwi Saver provides a worthwhile income for peoples retirement.

If there's not going to be government super for me then I don't want to pay tax levels that support the kind of super that retirees get today. That's a pretty crappy deal: pay a huge mortgage, pay for everyone else's retirement, but also pay for your own. Millennials are halfway through their working lives, you can't expect them to suddenly free-up the cashflow to finance their own retirement on top of all the other inflated crap they have to provision for

If that's going to be the deal then I'm not paying taxes to fund it for others. Simple.

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#3088416 11-Jun-2023 11:37

Luxon flails on Q+A: https://thedailyblog.co.nz/2023/06/11/mediawatch-qa-review-luxon-latest-crash-and-burn-interview-wheres-thomas-coughlans-train-wreck-column/

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