I don’t think baby boomers realise what current trends in emigration, average tax paid, average transfer payment received and attitudes towards older people will converge to.
The inability of people to perform basic math means that we’ll never have entitlement reform.
The government will borrow from overseas to pay people who are no longer working.
Many of these people never worked a day in their lives. Many more will live to a very old age and receive far more in taxes that they or their children will ever pay.
And wealthier couples who sell their $800,000 villas in Auckland and retire to the Bay of Islands will keep getting superannuation even when they could live comfortably off the interest or dividends their capital would provide.
This isn’t about political ideology – it’s a mathematical imperative that there are some restraints put on the exploding cost of superannuation before we turn into Greece.
But because we have cast our lot at the foot of universal suffrage, the political reality is that nothing will ever change.
It’s New Zealand, we’ve been on a trajectory of decline since the 1950’s and we’re never going back up the OECD rankings in anything.
The current level of Kiwisaver contributions are so pathetic that the relief they will provide to future governments in reducing superannuation payments based on the level of assets you have will barely dent the cost.
How can the 2020 government possibly reduce their debt or keep rolling it over through issuing more debt when faced with the likelihood of riots in the streets?
Get ready for lower living standards everyone! We’ll shoot through the Reinhart-Rogoff debt/GDP lower growth threshold faster than any other developed country!