Reform of superannuation is overdue, with new figures showing more than 30,000 superannuitants are earning more than $100,000 per year. This number is growing fast as more people keep working past 65. More than 126,000 superannuitants (17% of the total) are earning more than the average wage.
“This winter, while our richest superannuitants winter in Europe, one in five of our tamariki will be growing up in cold, damp houses” says TOP Leader Geoff Simmons. “These children will face a lifetime of problems, which will hold them back from fulfilling their potential. As a country, we have to question our priorities”.
Even more shocking is that the reported income is an underestimate of the real issue. It excludes income from PIE investments (including Kiwisaver) and untaxed income from property. This last factor makes a massive difference to what IRD deems as “income”. We know from previous IRD studies that a large proportion of high wealth individuals (worth more than $50m) pay less tax than the average teacher.
TOP agrees with economists Susan St John and Shamubeel Eaqub that reform of NZ Super is needed. The money saved should be reinvested in our youngest citizens. While not strictly “means testing” a similar result can be achieved simply through changes to the the tax system, as we do currently with student loans. This has been TOP’s policy since 2017 and we will be releasing a refreshed policy in the lead up to this election.
The country is spending more than half a billion dollars on superannuitants earning more than $100,000. This is also the amount that the country withholds from its most vulnerable and youngest citizens with the complex, arbitrary and cruel requirements for the In Work Tax Credit. Simply removing these requirements and integrating the In Work Tax Credit with the rest of Working for Families would put more than $70 a week in the hands of our poorest children.
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