Government Superannuiants Association

  • David Carter
Senior Citizens

Canterbury/Westland branch

Good afternoon branch chairman Margaret Draper, secretary Peter Gooding, and ladies and gentlemen, members of the Government Superannuiants Association.

Thank you for inviting me here this afternoon to speak to you on Government's policy for the aged, and our plans for celebrating the United Nation's International Year of Older Persons.

As Minister for Senior Citizens, I've spent the last few months coming up to speed with some of the issues concerning our older population.

What I've discovered are a set of issues we should ALL be concerned with.

How we fund our retirement, how we ensure our health and independence as we age, what plans we have for life after work, and how we maintain financial and personal security in old age, are issues that will - whether we like it or not - affect our lives.

Whether we are 40 or 80 years old, we all want to feel secure in our aspirations for the future.

My meetings with groups like your own over the past six months have been very useful in identifying and talking through the issues for the older community.

I can assure you Government is listening - we are only too aware that our growing older population has unique needs, and that they need to be supported by the rest of the community.

I'd like to start today by addressing the situation of our ageing population.

Like many other developed countries, New Zealand's population has been "ageing" over recent decades as a result of our declining birth rate and rapid improvements in life expectancy.

Older people now make up a growing proportion of our population.

In March last year, the 65 years and over made up 12 percent of the population, up from 11 percent at the start of the decade in 1991.

By the year 2011, when the baby boom generation of which I am a part of, enters the over-65s, we will see this group grow to 13 percent of the population.

The 65 years and over will then grow to 17 percent of the population by the year 2021, and then grow to a staggering 21 percent by the year 2031.

At the same time, over the next two decades, the age structure of the working age population will also substantially change.

What we can expect is a substantial decrease in the working age population, that is those aged between 16 and 64 years, relative to the rest of the population.

Currently we have four people in the workforce for every superannuiant.

In just 40 years time, we will only have two people in the workforce for every superannuiant.

What this all means is that over the longer term, proportionally fewer people of working age will be available to generate the resources needed to support the increasing number of retired people.

The growth in our older population is not unique to New Zealand.

Countries throughout the western world are experiencing this demographic phenomenon to different degrees.

What we share in common are the significant policy implications this demographic change will bring.

Governments throughout the western world are being challenged to develop and implement policies, which prepare for the expected economic and social effects of an older population.

The main implications we have to consider include the fiscal implications.

Change will be required to fiscal policy to prevent the need for large increases in Government spending We also need to keep an eye on our markets.

Governments with ageing populations need to ensure they have policies which labour and capital markets can be responsive to, following changes in our demography.

It is also important for Government to encourage "active ageing".

Helping people stay active, flexible and self-reliant has benefits for the older population, as well as society as a whole.

Finally Government has to weigh up the collective and individual responsibilities of ageing.

There are major challenges here in considering all of these factors.

We have all heard over the last couple of years the debate concerning the future of superannuation in this country, but the demands of our growing retirees will not only affect the cost of superannuation.

They will also impact significantly on our health budget.

Current Government policy is designed to promote community care - care which assists older people to remain living in their homes for as long as possible.

This policy is supported by the majority of the older population, who in the main, want to remain living in the community.

Home-based services currently funded by Government include meals on wheels, cleaning, and personal care services for older people who need help with bathing, dressing and feeding.

Government has already predicted the demand for these home-based services will only increase in the future. In support of this already, additional resources have been provided over the last decade for the development of home support services.

Government is also considering the future superannuation needs of the country.

It is not scaremongering on our part to raise the issue of how much superannuation we can afford to fund in the future.

I can tell you as Minister for Senior Citizens, we have a serious and looming problem on our hands.

A stable and secure income in retirement is the expectation of most of us, but with growing numbers of older people proportional to the rest of the population, we need to be realistic about what this country of barely 3.8 million people can afford.

Last year Government confronted the situation head-on, and made changes to the wage indexation relating to National Superannuation.

The change, which reduced the wage floor under which superannuation can not fall, saw New Zealand Superannuation reduced from 65 percent to 60 percent of the average wage.

It wasn't an easy decision, and we came under a lot of criticism from some of our political opponents who used the issue as a "political football".

Rather than debate the change on its merits, the opposition focused on polarising people on the new policy.

I regret that as we approach another General Election we still see some political parties prepared to promise anything as a means of buying votes from superannuiants.

Not only were WE looking to the future, aiming to ensure sustainability of the superannuation scheme, we were struggling under some of the harshest international economic conditions in years with the Asian crisis.

What many people chose to ignore was the very real fact that New Zealand Superannuation would keep pace with inflation, and the change did not mean a resultant reduction in current rates.

But last year's announcement was only an interim measure.

A longer term solution to the problem of our ageing population and its retirement needs, has to be found.

That's why Government has set up a Superannuation 2000 Task Force, tasked with the goal of looking at the wider issues surrounding superannuation.

The Task Force consists of ten highly-skilled members from the community, with the chair being taken by Angela Foulkes from the Council of Trade Unions.

The other members include:

Murray Horn, the chief executive of ANZ, Colin Blair, the Retirement Commissioner, Rodney Cook, the chief executive of AMP, Paul Fyfe, from the Investment, Savings and Insurance Association, Gary Hawke, Professor of Economics at Victoria University, Ann Knowles from the Employers Federation, Alison Mau, a TVNZ presenter, Lysbeth Noble, former chair of the Advisory Council for Senior Citizens and Rahera Ohia, a Maori policy consultant.

The Task Force will:

establish the policy principles for future retirement income strategies
agree on modifications to New Zealand Superannuation required in the medium term
consult with the public and engage their views on superannuation
develop a process for managing change in retirement income policies which will reflect New Zealand's changing circumstances over time
And finally produce a report containing specific legislative proposals which will be turned into Government by November this year
The Task Force is a very real start that involves all of us, and I hope party politicking will not deter the efforts of this attempt to find sustainability for our superannuation.

The Government also celebrated last month the enacting of a law change which has now made age discrimination in the workforce illegal.

The introduction of this Human Rights Act amendment has removed the final legal barrier for those attempting to work past 65 years.

Now, as a society, we just have to work on generating the cultural change that will accept older employees as an established part of the workforce.

In the long term the economic growth of any country is dependent upon the number of people employed and their rate of productivity.

It is fairly evident that the retention of productive older workers will have enormous economic benefits, and will contribute socially.

Research suggests that those who work longer in life enjoy better health in their old age.

The choice to work later in life, often using part-time arrangements, allows many older people the chance to put into practice, "the active ageing challenge".

This scenario is also beneficial from a retirement planning perspective, as the latter working years of an older person's life are often good retirement savings years.

This is usually the time of life when the family has left home, the mortgage is paid off, and a good portion of the older person's earnings can go towards setting themselves up for retirement.

It is a time of life many of us look forward to, and it has to be a good thing if we can allow people to put together a better retirement package before they turn to the State for help.

Government has also spent considerable time and resources over the last few years developing elder abuse and neglect services, which tackle some of the problems our more vulnerable older people face.

As of last year, there were 12 elder abuse and neglect services operating nation-wide.

Government has now provided funding for an additional ten services, which will be established in ten new locations over the next two years.

These services provide support, advice and guidance to older people suffering physical, psychological, sexual or financial abuse or neglect, perpetrated by close family members or family friends.

The service co-ordinators work in closely with the affected person and their family to find the best solution that will solve their particular grievance.

With a growing older population, we can only expect more demand for this type of service.

Finally, I'd like to mention an initiative, which is a little closer to home, and is helping older people in a tangible fashion. Christchurch's Confident Living Programme deserves considerable praise for the inroads it has achieved with older people, helping them address their fears about crime and general security.

The programme, which is unique for involving the New Zealand Police and Fire Services, has been operating in our city since 1993.

I've heard nothing but good things about this programme, which works with older people to develop strategies which will make them feel safer in their own homes and communities.

We all seem to be feeling a little more threatened by crime these days, but for many older people the fear of falling victim to crime, actually takes over their lives.

That's why this programme is so useful.

It's tackling some very real concerns amongst our older population.

In its final report to Government, the Prime Ministerial Task Force on Positive Ageing recommended that Christchurch's Confident Living Programme be continued, AND be expanded to other cities.

Officials from my Senior Citizens Unit are now working on ways the programme could be modified for use by other centres.

In closing today, I'd like to spend a few minutes detailing Government's plans for celebrating this year, the United Nation's International Year of Older Persons.

International Year of Older Persons kicked off on October 1 last year and runs to 31 December of this year.

The year is an ideal opportunity for Government and the community to celebrate our older generations, while also recognising the ageist barriers that continue to exist in society.

As I have already mentioned, last month's abolition of compulsory retirement was one of the tangible outcomes older people have gained this year.

Age used to be a barrier in the workplace. Legally, it is now no longer. But a cultural change is still required for employers to feel comfortable about employing older people.

That will happen, but it will take time.

Our national strategy for this International Year has been developed around the theme of "Valuing Older People", with the twin objectives of:

promoting positive attitudes to ageing and older people; and
preparing for an ageing population.
Government has allocated half a million dollars for the year's celebration, and $250,000 of this has already been handed out to community projects which focus on positive ageing.

As Minister for Senior Citizens I'm looking forward to taking part in some of the planned celebrations.

These include intergenerational programmes which will bring school children together with older people in May in a landmark initiative designed to foster acceptance and understanding between the generations.

Then in October, a series of community festivities, including radio programmes, galas, history displays and art exhibitions will highlight the pivotal role our older generation plays in society.

I can tell you there has never been a better time for us to recognise and value our older people.

More significantly, there has never been a better time for us to promote the concept of positive ageing.

As well as the community celebrations, Government is also funding a research project into the factors which allow older people to remain independent.

The research is focusing on the type and extent of services needed to support independent ageing.

Government expects to hear the research results later this year.

This project will result in further gains for older people, by helping Government understand what policies are working, and which aren't, in terms of supporting older people remaining independent.

We want International Year of Older Persons to be more than a year of celebration.

We need to have positive outcomes for older people as well.

Celebrating and recognising old age is all very well, but there are some very real issues that need tackling, and this is the year to do it.

Thank you all for your interest this afternoon.

I'd now be more than happy to answer any questions you have about International Year of Older Persons, or the Government's policies for the older population.