Funding the aging population.
14 April 1997
Mr Paul Avery
Clerk of the Committee
Electoral Law Select Committee
Dear Mr Avery,
The Centre would like to submit to the Committee, that any wording of the
referendum on compulsory superannuation, or any wording in subsidiary
information, which did not reflect the principles of democracy on which New
Zealand society is based, is contrary to the humanistically determined nature
of politics in a free society.
The Centre therefore submits that any wording which suggests a greater knowledge
of the facts of superannuation, or a greater knowledge of the facts of political
or economic matters on the part of the Government, is contrary to the right
to self determination of the people of New Zealand. By extrapolation therefore,
it is further submitted that such, or similar, wording as " . . . to help
you save for your retirement" is an intrusion into the cognitive processes
of free citizens by their elected representatives.
It is the view of the Centre that the role of elected representatives of
any group of individual human beings in the case of decision making by general
vote, be it the Committee of the local rugby club or the Government of New
Zealand, is to present the facts without bias.
With regard to the funding of the "ageing population", the Centre submits
that the funding of a democratic society, including an ageing population,
is a function of the disposal of the wealth available to that society, regardless
of who generates that wealth.
To illustrate this principle consider the two cases which follow. A family
consists of a male electrician, married with three children and who earns
an annual salary of some $33,000 - slightly above the average of some $31,000.
That family, group, population or "society" has therefore an annual income
of some $33,000 with which to meet the costs of their family or "society"
In the second example consider the well reported cases of Chief Executive
Officers of some organisations in this country who have an annual income
of some $1,000,000 annually. If such a CEO was also a married male with three
children, then this second family, group, population or "society" would have
an annual income of some $1,000,000 to meet the costs of their family or
It can be seen that in each case the society has a population of five and
also in each case twenty percent of the population is supporting the remaining
eighty per cent. In terms of the wealth available to each society it will
be noticed that the wealth of the society is not a function of the size of
the population, or of the proportion of generators of wealth to consumers
of wealth. The society funded by the CEO has thirty times the wealth available
to it than does the society funded by the electrician. It is submitted therefore
that the wealth available to each society is a function only of the ability
of wealth creators to create it. The Centre understands the annual income
currently available to the people of this country for disposal, in the form
of taxation, is some thirt five billion dollars.
In view of the preceding argument it is submitted that the annual income
of a society available for disposal, is a function of the emotional desires
of those human beings who want or a forced to make money and who pay taxes
on that money. It is also submitted that it is those same human beings who
employ other human beings who in turn pay their taxes.
It is therefore the view of the Centre that all wealth in all societies is
created by the business sector.
However, it is also the view of the Centre that in a democracy the disposal
of wealth generated by the business sector, is a function of political ideology
decided by individual citizens via the ballot box.
By extrapolation, as long as New Zealand remains a democracy and social policy
is therefore decided through the ballot box, a future political party may
well stand in a general election on the basis of using the wealth generated
by the business sector to fund its social policy targets which may well include
funding the so called "ageing population".
With the greatest respect it is submitted that such a course of action is
for the people to decide on the basis of the facts presented to them and
not by the use of apparently misleading terminology such as " . . . helping
you to save for your retirement"
This leaves open the question of whether or not the future drain on the annual
income of this country by the existing superannuation scheme can be met by
he annual income generated by the business sector. Research carried out for
the retirement commissioner suggests that it can.
The Otago Daily Times (23.12.96) carried a report which said in part:
| "Research for the Retirement Commissioner, undertaken by the NZ Institute for Economic Research, indicates that as long as debt continues to be repaid and the economy remains on track, then state funded
superannuation should be easily affordable."
In a further Otago Daily Times report (27.4.96), economist Len Baylis is
reported as saying on the subject of superannuation:
|"In 1966 about 38% of the population supported the rest. Today the figure was about 45% and expected to rise.
"Mr Baylis said while the number of people receiving superannuation would go up, the number of dependant people would also drop."
On the subject of saving for one's retirement, in the same article Mr Baylis
is quoted as saying:
|"Statistics showed there was about $90 billion invested in financial
assets but $300 billion was invested in real assets such as houses."
In view of the arguments as set out above, the Centre would like to submit
that the wording of either a referendum document, or that of an information
campaign; in a democracy, must reflect the right of the citizens of that
democracy to make their decision on the basis of full and frank disclosure
of accurate information. It is further submitted that the citizens of a free,
democratic society also have the right to not have their world view distorted
by the use of the power available to their elected representatives - but
which is not available to them.
J M STEVENSON (Mr)