Menéndez March Ricardo; Bayly AndrewRICARDO MENÉNDEZ MARCH (Green): Tēnā koe Madam Chair thank you. Look I welcome the opportunity to have this debate in good faith on the merits of New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill.I wanted to ask the member around the point of sustainability because I note in the introductory remarks that the bill is intended to contribute to the sustainability of super. I wanted to ask I guess around the evidence the member has or is aware of around to what degree this bill will contribute to the sustainability of New Zealand super in the longer term.Because what we do know from the initial briefings by the Ministry of Social Development (MSD) is that there is an expectation that as we restrict people going on to New Zealand super some migrants who need income support will end up going to a main benefit. While that number may be slightly lower there's higher operational costs to going from New Zealand super to a main benefit due to just the complexity of the welfare system. I note that the initial briefing by MSD also notes that in the longer term the projected savings of this bill to super—and this was before the Supplementary Order Paper was introduced—are likely to be even lower now. It's only 0.3 percent of the projected cost of New Zealand super.So we do know that this bill will increase hardship somewhat to our migrant communities but that the sustainability and the cost savings are really minor. So I would love to hear—and this is my question—what further evidence there is or just the member's view on how much this bill will actually contribute to the savings of New Zealand super. Thank you.ANDREW BAYLY (National—Port Waikato): Thank you. Very good question. I note that the Greens' minority view in the report of the committee.The simple fact is if you look at what's happening with superannuation around the world most countries are moving to increasing the age of entitlement up to 66 through to 68. That has been the trend and part of that has been brought on by recent economic events. But that has been quite a clear trend if you look across the OECD. So obviously at the moment we're at 65 and that's where we sit. In terms of the cost of super at the moment it's effectively about 4.8 percent. It's the single highest amount of Government spending that the Government incurs every year in terms of social spending. It is expected to double under the current projections to just under 8 percent by I think 2040.What people don't realise is that even with our New Zealand super fund which presently is over $50 billion—probably closer to $60 billion—that doesn't get used to help minimise the cost of New Zealand super it doesn't kick in until about 2033 or 2034. Even when we start to apply that fund—which possibly might be worth $100 billion at that stage—even starting to use it to top up the superannuation payment will only account for about 6 or 7 percent of the total cost of New Zealand super at that point in time. So New Zealand super is just an escalating wave that gets bigger and bigger like a tidal wave in terms of cost for the Government. As I've said before in a generic sense it doubles in terms of the cost of GDP of New Zealand from 4.8 to just over 8 percent.What's worse if you look at it and take into account health costs by the time you take rising health costs and superannuation costs you could easily project by about 2040—and certainly by 2060—that nearly half of our expenditure will be in just those two components. That's why it's absolutely necessary to start making these changes and that's why other Governments around the world have already started down this pathway. So one of the ways to deal with that is certainly raising the age of entitlement. The second one is—and this is a smaller component. It's only likely to affect about 6000 people—that's the rough guess of what we think—so it's a small proportion but it's part of what virtually every other country in the world has moved to: a 20-year rule. We're one of the few countries alongside Australia who have a 10-year rule at the moment and by moving to 20 years over a progressive period of time we're actually bringing ourselves in line with most other countries. So that is the raison d'être about it because we've got a tsunami of superannuation costs and this is one of reasons of how we might be able to deal with it.