NZ retirement age in question with Key exit; Labour's Little rules out raising age

Monday 5th December 2016

By Edwin Mitson

A National government under a new leader may be more willing to lift the age of eligibility for New Zealand Superannuation, economists said after John Key announced he will step down as prime minister next week.

"The fiscal viability of current NZ Superannuation would potentially be more open to debate, as John Key has long said he would resign rather than change the current scheme," ASB chief economist Nick Tuffley said in a note.

Key said a new leader would be elected by the party caucus on Dec 12 and he will vote for his current deputy Bill English if he is put forward. Key cited family reasons for his decision to go. He said in all likelihood, he would not want to serve a fourth term as PM.

Labour leader Andrew Little told the media he would not consider raising the NZ Super age beyond 65.

"I want to make sure NZ Super is there for all future generations. I come from a background of representing working people, the idea of lifting the age is a step too far for many peoples."

Little praised Key for his contribution to government.

"Labour is ready and willing to contest the 2017 general election. We will present a credible choice for people and look forward to the opportunity to contest the election on our values and vision for New Zealand.”

Economists at ASB said the implications for the NZ economy for the remainder of the current parliamentary term "are quite minimal," arguing the senior leaders of the government are likely to remain broadly unchanged.

"It is possible that business confidence will dip slightly in the short term, and the usual pre-election slowdown of business investment decisions may be larger than normal," he added.

The NZX50 was trading at 6,906 prior to the unexpected news, falling to as low as 6,879, a drop of 0.4 percent. A short while ago it was trading at 6,880.

The NZ dollar fell from 71.13 US cents to a low of 70.76 cents in response to Key's announcement. It's currently trading at 70.79 cents.

(BusinessDesk)

BusinessDesk.co.nz

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