Address to Grey Power Auckland

Speech notes for Associate Social Development and Employment Minister Darren Hughes' address to Grey Power Auckland.  Fickling Centre, Mt Roskill, Auckland.

Good morning and thank you for inviting me to speak with you today on behalf of the Labour-led Government.

This Labour-led Government is extremely proud of its achievements this term. We were elected on a platform of providing Kiwisaver, cheaper doctors’ visits, interest-free student loans and 20 free hours of early childhood education. We have delivered on those promises and in Thursday’s Budget we will move to cut personal taxes to help relieve the pressure on household budgets. We know people are doing it tough at the checkout and the petrol pump and we know this is because of a global economic downturn caused by rising world food prices, the ever-increasing cost of oil and the credit crunch. To help combat these international pressures, Dr Cullen has signalled that there will be personal tax cuts that will make a real difference to people’s pay packets.

 Today, I want to talk to you about what the Government is doing to help senior citizens.

 Superannuation and Veterans Pension

Across all walks of life, and all socio economic groupings, every New Zealander is concerned at some time with their financial security. That doesn’t change with age.

New Zealand Superannuation is the main source of income for most older people. It is currently the only form of income for more than half of those aged 65 and over.

As part of Labour’s confidence and supply agreement with New Zealand First, we have committed to adjust New Zealand Superannuation annually to 66% of the average ordinary wage for a married couple – one percent higher than the legislation requires.

We first fulfilled this commitment in 2006 and again in 2007.  In April this year we adjusted the NZ Super rate again, so that as of 1 April, New Zealand Superannuation and Veteran’s Pension rates increased by 3.18%. More than half a million New Zealanders will benefit from this adjustment. 

Married couples receive an after-tax increase of over $13 a week.  A single person living alone will receive almost $9 net a week more, and singles who are sharing living arrangements get just over $8 net per week extra.

Because of our government’s confidence and supply agreement with New Zealand First, seniors are getting $34 more per week with a Labour-led government than they would have from the National Party, which wanted to freeze the rate of NZ Super at 61% of the net average weekly wage when Bill English was Finance Minister.

For some superannuitants and veteran’s pensioners, the increased rate would have meant that they lost their eligibility for their Disability Allowance or the Community Services Card. So we adjusted the thresholds for the Allowance and the Card to ensure those who were receiving these supports will continue to do so.

As some of you know, the Ministry of Social Development and Treasury have been reviewing the treatment of foreign state pensions paid into New Zealand, and payment of NZ Super overseas.

NZ Super is unique because it is paid in full after a person has lived in New Zealand for 10 years. In most countries the level of a pension is based on the number of contributions a person has made during their working life.

Retirement pensions are becoming more global as people choose to work and retire in different countries. The review, which is to be released shortly, looks at balancing access to retirement provisions between the country where a person has worked and where they retire.

Its objectives include ensuring that the treatment of overseas pensions paid to New Zealanders is equitable for New Zealanders who have lived and worked in New Zealand all their lives, as well as to allow New Zealanders to retire comfortably in the country of their choice.

I am aware that the issue of access to the KiwiSaver scheme is of interest to some Grey Power members. KiwiSaver has been developed by the Government to provide a private savings vehicle designed to enable people to build up some financial assets for use primarily in retirement. The scheme is not available to those who are already entitled to NZ Super, because, in the Government’s view, to benefit from both would be inequitable.

Since the matter is currently before the human Rights Review Tribunal, further comment would be inappropriate.

Financial protections

Staying with financial matters, for most older people the equity they hold in their homes is the major part of their wealth. And increasingly, older people are using home equity conversion schemes to access that wealth and to supplement their income.

Typically, these home equity schemes allow owners to continue occupying their homes for life in return for a loan comprising either a lump sum or periodic payments.

The loan sum is limited to a percentage of the value of the house, with the percentage increasing the older you are. The loan is repaid only when the property is sold or the owner dies.

The schemes can be very beneficial. But there are pitfalls. For a start, there’s been a rapid growth in range of conversion schemes to choose from.  From what we have seen, it is not always clear to people at the outset just what they may be committing to. To guard against this, we are developing a code of practice for home equity conversion schemes.

The proposed code seeks to protect the financial interests of older people and help shape this rapidly growing industry at its earlier stages of development.  The draft Code has now been sent to key stakeholders for comment.

The financial protection of older New Zealanders is also a focus of our work to amend the Protection of Personal and Property Rights Act 1998. Specifically, the new legislation provides greater legal protections for older people - and disabled people - when setting up an enduring power of attorney. 

The Act, which was passed at the end of last year strengthens witness requirements, and changes the personal care and welfare threshold at which an attorney’s powers can be activated. The provisions will prevent an attorney from gifting or making loans from the donor’s property, unless that has been provided for when the power of attorney was set up.

SuperGold Card

Last August we launched the SuperGold Card as part of our confidence and supply agreement with New Zealand First.

Replacing the Super Card and Community Services Card for those aged 65 years and over, the SuperGold card also provides access to discounts from a range of participating businesses. Currently [as at 17 April 2008] there are 764 business partners representing nearly 4000 outlets nationwide.

In addition, as associate senior Citizens Minister Winston Peters recently announced, this year’s Budget will include new funding to enable SuperGold cardholders to travel free on public transport during off-peak times – that’s trains, buses and ferries.

This year’s budget will also include a significant funding boost to ensure greater access to hearing aids.

If you’re receiving New Zealand Superannuation or a Veteran’s Pension, you’ll automatically receive a card in the mail. If you haven’t received your card, please get in touch with the Ministry of Social Development or talk to your local Work and Income office.

Rates rebates

One form of concession already available to older New Zealanders is the rebate on household rates. In July 2006, the government increased the rates rebate threshold, making more people than ever before eligible for this assistance.

Today, the maximum annual rates rebate is $500, up from $200. And the income threshold for the maximum rebate is $20,000 per year, significantly higher than the $7,400 before July 2006. The additional income allowance for dependents has also increased – from $156 to $500, per dependent, per year. 

In practice, what this means is that couples whose only income is New Zealand Super will receive some level of rebate if their annual rates bill is more than $1,400. 

After the significant improvements to the scheme in July 2006, rebates of over $50 million were approved in 2006/07 to over 112,000 households. Rebates granted for the current financial year are on track for a similar amount. This compares with just $696,000 paid out to only 4220 households in the year before the scheme was changed.

The government is also looking at how the scheme can be improved in the future. I encourage you to contact your local council and fill out the rates rebate application form if you haven’t already done so.

Turning to health:

The World Health Organisation’s first ever analysis of the world’s health systems, using data from 1997, ranked New Zealand’s performance at the time at No 41 – not a ranking that anyone would be proud of, I’m sure.

So when Labour took office in 1999 we’ve were faced with a long climb back.  We have responded by injecting literally billions of dollars of extra funding into health services that have enabled significant upgrading of public hospitals in many parts of the country, big increases in the medical and nursing workforces, especially in key areas such as mental health, and more affordable primary health care.

With regard to the latter, about a million people, including those aged 65 and over, are today receiving low-cost primary health care services.  All New Zealanders enrolled in Primary Health Care Organisations are now receiving considerably cheaper access to primary care services than five years ago.

The hospital upgrade progammes are still under way. When they are complete, we will have 22 new operating theatres nationwide.

Investment in healthcare is resulting in more New Zealanders seeing their doctor and the highest rate of elective surgery since reliable reporting began, including big investments in hip and knee operations and cataract surgery.

Recently we launched a national Carers’ Strategy with a Five-year Action Plan to begin addressing some of the issues that impact on the nearly 420,000 New Zealanders who assist friends and family members who need help with everyday living because of ill health, disability or old age.

Informal caregivers tend to be mainly women, many of whom are older people with health needs of their own. So we see this as an especially valuable initiative.

While there are a range of indicators showing our health services are improving, there are still a lot of areas where we can – and need – to do better. With a modernised hospital infrastructure, a larger health workforce, and a more accessible primary health care system, we are well placed to do that.  

Measuring progress

Currently, we invest a quarter of all government expenditure in older New Zealanders. With our population ageing, this proportion will only grow. As you represent such significant investment, we recognise that our service delivery to older people needs to be flexible and responsive to the increasingly diverse range of needs. The Ministry of Social Development is in the process of reviewing its services to ensure they meet the needs of older clients both now and in the future. This includes improving how it works with other agencies in providing services that help people to ‘age in place’.

How do we know we’ll keep on track? There’s the old adage, “what gets measured gets done”. And the planning and reporting processes that come under the umbrella of The New Zealand Positive Ageing Strategy helps ensure just that.

The 2006-07 Annual Report and the 2007-08 Action Plan is now available and shows government and community partnerships are delivering practical initiatives to improve the lives of older New Zealanders.

Conclusion

Right now there is a lot of activity focused on improving the lives of older New Zealanders. What’s important to me is that organisations such as Grey Power continue to provide a voice for older people as these activities develop. I strongly encourage you to keep participating in the ways you have been.

Once again, thank you for your invitation.