Scary $2 trillion debt must be addressed now

Despite the government’s election undertaking not to change the age of eligibility for national superannuation, business wants the topic on the public agenda urgently.

“We can’t keep getting reports from government warning of vast forecast budget blowouts without taking action on their causes now,” said the chief executive of the Employers & Manufacturers Association (Northern), Alasdair Thompson.

“New Zealanders are not fooled. We all know very well if constructive changes are made to such as ACC and national super then the huge liabilities we face can become manageable.

“Its plain that the entitlement age for super must go up, and in any case older people will be needed in the workforce beyond 65.

“For business certainty, its important to get super on the table for discussion now. We can’t wait until the next election or some time in the never never plan.

“Its also plain that limits must be put on working for families benefits. Incentives to work must be restored, so people are not encouraged to stay on welfare as they are at present.

“We need urgent action to eliminate tax rip offs by well off people who invest in highly leveraged real estate, or get their income through trusts, then claim welfare benefits, including working for families and rest home subsidies.

“The $250 million a week the government is borrowing is adding to the pressure on the currency and our exporters and ramping up a future burden for young people.

“The government must show more leadership by demonstrating it is prepared to take action to reduce its need to borrow.

“If it doesn’t, taxes will have to go up over the next 5-10 years to avoid massive forecast increases in public debt and interest costs.

“Instead of borrowing to fund infrastructure investment, the government and councils should sell outright (or 49 per cent in the case of SOE’s), their tens of billions of assets in SOE’s, ports, airports, and even hotels to private investors and super funds.

“Governments cannot live beyond their means without putting the country and our people under greater long term stress. Doing that is irresponsible.”