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"New Zealand now has an exciting opportunity to secure an adequate level of superannuation into the future without imposing a huge cost burden on the workforce of tomorrow," Wairarapa MP, Georgina Beyer said today.
"The New Zealand Superannuation Fund proposed by the Labour-Alliance coalition provides for partial pre-funding of the costs of supporting the large baby boom generation in retirement.
"The baby boomers are those born between 1946, the end of the Second World War, and 1965.
"There are many more of them than there are of the generations which come before or after them. This means that as they age, the country will undergo a demographic transition," Ms Beyer said.
The facts were stark:
12 percent of the population was now aged 65 and over. By 2050, the proportion would have risen to 25 percent.
There were now six people of working age for every one retired person. By 2050, the ratio would be two of work age to one superannuitant.
The net cost of New Zealand Superannuation was now 4 percent of GDP. Over the next 50 years, that would have more than doubled to 9 percent.
"We also know that almost 50 percent of current superannuitants rely upon New Zealand Superannuation as their only source of income. So this is a crucial policy area, of vital concern to all New Zealanders. It is important that we get it right.
"So far the record of politicians on this issue has been abysmal. The proposal the Government is offering could become the basis for achieving a new consensus.
"No other solution is fair. If we do not partially pre-fund, future governments will either have to savagely cut the pension or savagely raise taxes or do both in combination. Any of those options would be damaging to our society and to our economy," Ms Beyer said.
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