The underlying message is that if historical productivity growth of 1.5 per cent a year does not improve, and Budget deficits projected over the medium term are not controlled, public debt to GDP could blow out from 106 per cent today to $223 per cent by 2050.There's little to disagree with in Whitehead's advice:
If productivity growth were to improve by 2 per cent a year, labour force participation was 3 percentage points higher than it is today, and new migrants added 15,000 to national population annually instead of the 10,000 forecast, net debt would rise to 146 per cent of GDP by 2050. "This is still an unsustainable fiscal position," the report says.
These include:Spot on.
• Linking the age of pension eligibility to national average lifespans, as Denmark has done, with changes not kicking in until the late 2020's.
• For a quarter of all pensioners, Government Superannuation is less than 20 per cent of their income, while for the other 75 per cent, it is more than 80 per cent. Halving or axing eligibility for pension payments to this upper quarter would yield significant savings. A trade-off could be to spend more on health services to meet the growing costs of an ageing society.Could Key put a cap on the Super sector and get away with it? After his blunt promise on doing nothing before last election, he might try to review his pledge in the run up to the next election and get a mandate on it. If anyone has a chance to review their options, Key has.
• Adopting health system practices which, in other countries, have halved the length of average hospital stays.
In a strange echo of the New Day Dawning theme in the HBO series The Wire, Whitehead wants to focus on what works and not playing the stats game with Health. Personally, I think Ecstacy, LSD and marijuana have a very important palliative role to play in hospices.
• New Zealand's prison population is forecast to rise from 150 prisoners per 100,000 citizens in 1999 to 225 per 100,000 by 2017, and justice system costs have doubled in the last 15 years despite a stable crime rate.I really can't believe how Labour are letting the Nats get away with all this expensive law and order mumbo jumbo. There's record incarceration rates, and Labour have agreed with every single piece of draconian nutbar legislation that the Nats have introduced. Labour couldn't find a wedge even if they were wearing bike pants.
"Given that New Zealand's imprisonment rate is already one of the highest in the OECD, and recent increases have had little impact on recorded crime rates, it is unlikely that further increases in our imprisonment rate will be the most cost-effective way to achieve lower crime rates," the Treasury said.
• Education funding assistance is indiscriminate and risks not being captured by groups in society who need it most.Whitehead sez leave NCEA alone. Right now it's good enough, and Dagg knows a bit of natural evolution will settle that beast down. As for Tolley's plan to test the kiddies, the whole point of the exercise is to identify that 20 percent John Key points to who are falling through the cracks. It remains to be seen whether once those kids are identified, something productive is done to help them, or whether it becomes a George W Bush No Child Left Behind mess.
Stuff looks at a different angle of Whitehead's white paper. A stunning little number becomes clear:
Mr Whitehead noted the imminent threat to government spending liabilities from the increasing 65-plus age bracket. A quarter of Government spending currently went towards that group, which made up 12 per cent of the population. "By 2050 the ratio of people 65 and over to those of working age will double,'' Mr Whitehead said.My billy bold there. Even if NZ doubles its productivity and its unemployment halved, we're still in the shit. No disrespect to Lindsay Mitchell and her stance on the DPB, the unemployed and the unemployable. But these areas are a pittance compared with the copious share of government spending that goes on the aged.
Funds management guru Brian Gaynor touts the big and important success of KiwiSaver. You'd be stupid (or too impoverished) not to be in on this taxpayer funded swindle:
Any scheme where individuals contribute only $35.10 of every $100 deposited in their savings account is a no-brainer - there is a huge incentive to join.Forget the fact that there's actually less money in there than what has been put in. Put aside all the extra overheads that are hidden in the footnotes, the IRD processing, the divvie for portfolio managers, the transfer of wealth from the state coffers to private interests. It's all good.
At least Brian Fallow is giving the demagogues of management a bollocking for ignoring all the expat Gen X talent does doesn't fit their narrow, risk averse criteria. That same school of thought also gave us Equiticorp, Bridgecorp and Feltex. Whatever happened with that Feltex thing anyway? Still nothing, eh?
Despite today's NZ Herald editorial calling on Key to re-examine his stance on the Super question, Whitehead's tsunami warning, and Tracy Watkins in the DomPost having a go at Key too, it is still not getting through to the vote-wary politicians. One indignant voter bloc of 12 percent is enough to swing to hang anyone who tries to tinker with the entitlement.
Take the latest big gorilla swindle that passed largely unnoticed in the MSM or blogs. TVNZ was onto it though:
Social Development and Employment Minister Paula Bennett says retirees nowadays were not content "to be regaled by the adventurous tales of the overseas experiences (OE) of their grandkids. They want their own OE."
Previously if some needy pensioner wished to take a round the world cuise aboard some luxury liner or whatever, they only received 50 percent of their hand out. Now they can live in the south of France and live off the lifeblood of Kiwi residents and citizens without ever stepping foot in the country again.
No other state beneficiary has such luxury. The unemployed and invalids can't swan off like Rodney on the taxpayer dime and get away with it. But if you're over 65 you can. You might need a free bus fare to get to that job interview across town. You'll have to apply at WINZ for special permission there. But if you're over 65, you can free lunch on the bus off peak with no worries.
Seriously, I'd consider moving to Australia if it wasn't full of Australians. Right now, they're about the only country that looks fit to dodge that fucking big grey gorilla in the room.
