Australia looks at universal pensions

Australians are beginning to show interest in New Zealand’s universal pension scheme. Here is a column the could have been written by my friend and colleague, New Zealand economist Susan St John. (Susan, were you the ghost writer?)

Australia has one of the most complex super schemes in the world. ….

New Zealand’s system, by contrast, is probably the simplest pension scheme in the world. There is no asset testing, you can work and continue to receive the pension, there are no electable options and there’s an absence of fishhooks to indirectly benefit the financial services sector as families struggle to understand and comply with a raft of Byzantine rules.

The Government has said it will raise the age of entitlement as life expectancies increase¬† but by international standards 67 years is a generous provisioning and it won’t be phased in until 2037. Set at 65 per cent of the average wage, New Zealand’s pension is higher than many other countries.

Alex Malley, “NZ the lucky country when it comes to superannuation“, National Business Review, 9 April 2017.

Australian accountant Alex Malley is the chief executive of CPA Australia (Certified Practising Accountants), not to be confused with the Communist Party of Australia. He is author of The Naked CEO: The Truth You Need to Build a Big Life (John Wiley & Sons Australia, 2015). National Business Review (NBR) is a weekly New Zealand newspaper.

This short, readable column is highly recommended. My only quibble is that the author leaves out some important details. New Zealand’s universal pension is the same for everyone who meets a residence test, except for a small penalty applied to married couples and a severe penalty for those who receive a contributory or non-contributory pension from a foreign government.

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