Staged UBI and the New Zealand Superannuation

NZ Super is a touchy subject for many, especially around election time.  As we have seen on many of our Facebook threads, there is also a wealth of opinion on how it should be managed. Like everyone else, TOP has an opinion too, and it happens to be one of our main policies. Unfortunately, there seems to be a large amount of confusion on how this policy will actually affect people, so we want to make sure we are clear on what we are trying to achieve. 

Firstly it is important to point out that with all our policy we make sure we have a way to pay for it. We always try to show the cost and benefit, as after all almost everything has a trade-off. Political promises without the source of funding are common but disingenious, even deceitful. In this case our proposition is to cut NZ Super in half and then means test any top up required. For people who need all of their NZ Super there will be no change. With the proceeds we intend to provide a UBI (Unconditional Basic Income) to all parents with young children, and spend the rest lifting kids out of poverty.

Means testing NZ Super will ensure all elders still get the income they need. For people over 65 earning other forms of income (as defined by our tax policy) the amount of “top up” they’re entitled to will abate from $10k (if they earn nothing) to zero by the time they’re earning $50,000 pa. To reiterate, those people that earn over $50k will still be guaranteed $10k a year from our “Elders UBI (Unconditional Basic Income)”.

Our rationalisation of NZ Superannuation – long overdue and avoided by the Establishment parties who simply will not deal with this issue, affects only those who do not require such significant taxpayer assistance.

The rationale

The total cost of NZ super is around $12 billion pa, and that amount is increasing each and every year. The Establishment parties are ducking and diving around raising the age to make it affordable, something that will make every retiree worse off. Why should we continue to give this generous benefit to wealthy people like Gareth, when we could direct money to people who actually need it, like young families?

Where is the money going?

Half of all families with new-born children will experience at least a year of poverty, and for 1 in 4 that poverty will last for 4 or more years. Every cent raised from this means testing will be redirected toward our “Thriving families” policy, giving all families with children under three $10,000 per year as a “Young Familes” UBI. It will also fund further support for poor families, and free, full time, high-quality early childhood education.

The evidence is clear that the return on investment for society is much higher when investing in children early, so by doing this we can help nurture the most vulnerable sector of our society, all at the expense of a few less overseas holidays for our wealthy retirees.