1. Superannuation—Entitlement Age Residency Requirements and Life ExpectancyALASTAIR SCOTT (National—Wairarapa) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSSuperannuation—Entitlement Age Residency Requirements and Life Expectancy1. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: What is the Government doing to improve New Zealand's long-term fiscal sustainability?Hon STEVEN JOYCE (Minister of Finance): This Government is making a number of important policy decisions to best serve New Zealand's long-term interests. For example we announced yesterday the Government's intention to lift the age of entitlement of New Zealand superannuation from 65 years of age to 67 years of age starting in 20 years' time in 2037. This is a fair and responsible thing to do. Although New Zealand has a more affordable superannuation scheme than most developed countries the increasing costs due to an ageing population would require future trade-offs either restricting spending increases in areas like health or education or increasing taxes. Making this change over a reasonable time frame gives today's younger New Zealanders the ability to plan with certainty for their retirement in the future.Alastair Scott: Who will be affected by this change and how will it affect the amount of New Zealand superannuation they receive? [Interruption] Mr SPEAKER: Order! The level of interjection is making it hard for me to hear what the Minister's answer is going to be.Hon STEVEN JOYCE: Firstly let me say that all current superannuitants are not affected at all by these changes. In fact only those born on or after 1 January 1974 will be impacted by the full 2-year change. Increasing the age allows us to keep pace with increasing life expectancy. A retiree turning 65 today can expect to spend just under one-quarter of their life on average receiving New Zealand superannuation. By 2041 a 67-year-old similarly will expect to live just under one-quarter of their life on New Zealand superannuation as a result of increased life expectancy.David Seymour: In light of the Minister's answer to the primary question is this something the Government is doing or something it forecasts some future Government will do long after the Minister himself has retired? Chris Hipkins: Good question. Mr SPEAKER: Order! Then we will hear the answer.Hon STEVEN JOYCE: Well the hint there is in the question which is about New Zealand's long-term fiscal sustainability and actually Governments do have a responsibility to be thinking and acting in the longer-term interests of New Zealand. It is of course the right of any future Government to change any piece of legislation it sees fit but actually if you look at the life expectancy of New Zealanders which is increasing at about the rate of 1.3 years every decade it would be irresponsible at this stage of the process where we have the opportunity looking out 20 years not to be thinking about these sorts of issues.Alastair Scott: What other changes are you making? [Interruption] To the—[Interruption] Chris Hipkins: I raise a point of order Mr Speaker. Hon STEVEN JOYCE: The Government—Mr SPEAKER: Order! We have a point of order from Chris Hipkins.Chris Hipkins: The member asking the question is not a new member and knows that that is not an appropriate way to ask a question.Mr SPEAKER: I will allow the member Alastair Scott to re-ask the question in full.Alastair Scott: Other than the answers that you have given so far regarding New Zealand superannuation what other changes are you making?Chris Hipkins: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! The member will resume his seat. I just require substantially fewer interjections coming from my left. If Chris Hipkins has a point of order I will hear it.Chris Hipkins: I think the members on this side of the House would very much like to know what changes you Mr Speaker are proposing to make to superannuation but that is not a question that is in order.Mr SPEAKER: And that is not a helpful point of order. We will hear the answer—the Hon Steven Joyce.Chris Hipkins: I raise a point of order Mr Speaker. All the rules of the House are very clear that questions have to be asked in the third person; otherwise they are questions to you as the Speaker.Mr SPEAKER: I would be grateful if the member would please familiarise himself with the Standing Orders and Speakers' rulings. I refer him particularly to Speaker's ruling 31/3.Hon STEVEN JOYCE: The Government is also proposing to increase the residency requirements for New Zealand superannuation so that applicants must have lived in New Zealand for 20 years with 5 of those after the age of 50. That is double the previous requirement of 10 years. Increasing the residency requirements brings New Zealand more into line with other countries and focuses superannuation more on those people who have paid taxes and made a contribution to New Zealand. It should be noted that this change will not affect anyone who is already resident of or a citizen of New Zealand when the legislation is passed.Chris Hipkins: I raise a point of order Mr Speaker.Mr SPEAKER: A point of order Chris Hipkins—and I hope before the member starts that he is not in any way attempting to relitigate a decision I made regarding his earlier point of order.Chris Hipkins: No I am not.Mr SPEAKER: Because if he were to do that I would deal with it very severely.Chris Hipkins: Speaker's ruling 31/3(1) refers to debate; it does not refer to questions and questions are in fact covered by different Speakers' rulings.Mr SPEAKER: I would be grateful if the member would then familiarise himself with Speaker's ruling 31/3(2): application of this ruling is at the sole discretion of the Speaker".Rt Hon Winston Peters: I raise a point of order Mr Speaker. May I suggest from a legal point of view that the application may be at your discretion but that discretion is as to the application when it is to do with speeches not questions.Mr SPEAKER: I have heard the point of order and I have made a ruling and that will be the end of the matter. But if I am not going to get more cooperation then I will not hesitate to be asking members to leave the Chamber. It has been very noisy to date; I am prepared to have a reasonable amount of interjection but the way that question time has been conducted so far will only bring this House into disrepute and I will not put up with it for much longer.Marama Fox: In light of the Minister's reference to life expectancy where inequity exists in regard to life expectancy for groups of people will the Minister consider flexible arrangements for those affected groups; if not why not?Hon STEVEN JOYCE: The Government has said that it would legislate for a review of any transition requirements to be considered in 2030 because then we will have more understanding of the nature of people working over the intervening 13 years. That will be for the Parliament then to address. But in terms of ethnicity for example the good news for the member is that the life expectancy of different ethnic groups in New Zealand—including of course Māori—is steadily improving. The gap with other ethnic groups is getting smaller and I am certainly hopeful that that gap will have closed up—indeed that is the projection—substantially by the time this particular policy comes into place.David Seymour: Given the Minister's answers that adjustments to the age of entitlement to superannuation are good and necessary and his concession that this Government cannot bind future Governments why does his Government not start adjusting the age now?Hon STEVEN JOYCE: Because—for the member's benefit—actually it would be unfair to start adjusting the age now at a period of time that would be very close to the day's date. Those people would not have the opportunity to adjust the way they approached their life decisions when they were close to retirement. I think it would be very unreasonable to do as some parties have proposed in the past and suggest that it happen over less than a 10-year period because once people get into those age groups where they are not far from retiring they do not have the opportunity to respond to a long-term decision like this. The member can of course make that argument but I think this approach is much fairer.Rt Hon Winston Peters: Is it the Government's policy on this and other matters to prop up members of Parliament give them jobs that are way above their quality ability and talent and then put up with impertinent questions whilst they try to demonstrate that they are not National Government doormats?Hon Member: I don't think you should describe Winston Peters like that.Hon STEVEN JOYCE: With the greatest respect I think the member might be describing his own party.Alastair Scott: What aspects of the New Zealand superannuation scheme will remain the same?Hon STEVEN JOYCE: The Government remains committed to the universal aspect of New Zealand superannuation with no means testing or asset testing. In addition we remain committed to New Zealand superannuation being indexed to 66 percent of the average weekly wage. It is worth noting that the weekly payments to superannuitants have increased by 35 percent after tax since 2008 compared with inflation over the same period of 14 percent. Finally KiwiSaver will continue to be available to savers once they turn 65.David Seymour: If the Minister believes a sudden adjustment in the age of entitlement to superannuation would be unfair why does he not start early and adjust it more gradually rather than proposing to lump the entire cost on millennials long after he himself has reached retirement age?Hon STEVEN JOYCE: I thank the member for referring to my youthful nature. It is important to note that what is actually happening here is that life expectancy is increasing by 1.3 years every decade. If we make a change 20 years from now to superannuation and extend it a further 2 years people who retire at 67 in 2040 will spend a slightly longer proportion of their lives on superannuation on average than somebody who retires today at 65. I think the increased life expectancy is a good thing—I think most people agree with that—but it is important that we ensure we are not increasing the burden not on this next generation but on the one after who will end up paying national superannuation.David Seymour: Is the Minister seriously suggesting that increases in life expectancy do not begin until 2037?Hon STEVEN JOYCE: No. The member should listen more carefully to the answer with respect. What I had pointed out is that over that period life expectancy is increasing and then when we make the change actually the percentage of life people will spend on superannuation will be as I say slightly more than it is today. The reason we are not changing it in the meantime is that those closer to retirement have far less time to adjust their living expenses and conditions to cope with the change and that is just being fair.David Seymour: How does the Minister reconcile that answer with the fact that every country cited in the Government's information sheet on this topic including Australia the United Kingdom Denmark the Netherlands Ireland Germany Italy and the United States are all making that adjustment within the 2020s and will finish making their adjustment 7 years before his proposed adjustment even begins?Hon STEVEN JOYCE: Because our cost of superannuation is significantly lower as a percentage of our economy than those other countries on average. The average cost of superannuation to OECD countries is 9 percent; ours is currently around 4.5 percent which gives New Zealand time to make the change in a more gradual manner. I think that is a good thing. That is why it is an appropriate fair and reasonable response to make this policy change today. I invite the member to consider it further and consider supporting it in due course.Chris Hipkins: I raise a point of order Mr Speaker. Mr Speaker I would like to ask that you give some consideration to a considered ruling on the issue of the form of address that members should use when asking questions. I went back and looked at the Standing Orders Committee's report that is referenced in the Speaker's ruling that you just gave me—Mr SPEAKER: Bring the point of order to a conclusion.Chris Hipkins: —and it refers specifically to speeches and debate not to questions. Just very briefly I think the reason it is important that the form of address is clear in a question is that it has to be clear whom the question is addressed to. A question that uses the phrase "you" or "your" is actually being addressed to you as the Speaker not to the Minister whom the member may be intending to ask.Mr SPEAKER: I will give it further consideration."