Letters from the Southern Man
Migrating is more than just filling in forms and submitting paperwork, its a complex process that will test even the most resilient of people.
Understanding New Zealand is paramount to your immigration survival and to give you a realistic view of the country, its people and how we see the world, read our weekly Southern Man blogs. Often humorous, sometimes challenging, but always food for thought.
What’s the best immigration related question you think I have ever been asked?
I have to tell you I get some good questions from potential clients and I also get some really dumb ones. In the category of not-completely-brain-dead-but-getting-close was when I was asked at a seminar I was presenting – ‘What language do you speak in New Zealand?’ I swear it took the wind out of my sails as I tried to work out if they guy was taking the piss or not – he wasn’t it turned out. So I explained in the best, ah, English I could muster, that the answer to his insightful question was….English. Chuckles all round. Bewilderment on one face…..
I thought this week I might give you the answer to what I think is the best question ever.
Last year I was asked what would be the biggest challenge facing New Zealand in twenty years’ time. How good a question is that given most migrants move for their children?! I haven’t stopped thinking about it since and it has been almost a year.
To be quite honest given it is Friday, this is a bit heavy (memo to self – write these heavy blogs on a Tuesday when mind is fresh and not scarred after a week fighting the forces of immigration evil).Truth be told I really just want to crawl out of the office and find a bar but in the interests of sharing I will tell you.
I said at the time that our ageing population presented the greatest challenge. It was however a close run thing – our love affair with tax payer funded welfare was a close second although arguably they are not mutually exclusive.
New Zealand is like most of the developed world. We have an ageing population, low birth rates and politically sensitive migration figures which when added up all means that there is little growth in our population. The baby boomers (born between 1946 and 1964) represent a large bulge in our population and the first have hit 65 and retirement age.
With retirement in this country comes a non means tested, doesn’t matter how much other income you have, universal taxpayer funded pension. We are one of only four countries on the planet offering this universal pension.
For a single person living alone this is worth $400.07 a week (before tax) and for a married couple it is $604.70. By no means a king’s ransom but if you have no bond on your home and you don’t live in Auckland you are going to get by when that is combined with our taxpayer funded healthcare system. It isn’t a glamorous existence I am sure. Little doubt that for many it must be a struggle if they have no supplementary income and most won’t be holidaying on the French Riviera but it is generally, dignified.
Next year this pension will cost the taxpayers of New Zealand $500m more than this year. By 2016 it will cost $3 billion more than this year.
By 2020 it will cost billions more and 2020 ain’t that far away.
This economy has a GDP of $170 billion of which Government expenditure is roughly $95 billion.
Just to give you an idea of how much NZ$1 billion is if you stacked $100 bills on top of one another they would stop a kilometre into the air. Social welfare spending at $23 billion would see that pile of notes stretch 23 kilometres into the sky.
Our generous pension system makes up a substantial portion of that $23 billion this Government now spends each year on welfare of one form or another. It is only going to grow. And grow quickly.
Unfortunately while we possibly have the world’s nicest Prime Minister he made the imbecilic commitment before he was elected four years ago that before he would make significant changes to eligibility (such as sensibly raising the age to perhaps 67 over a period of years given our life expectancy is around 80 years) he would retire form Parliament. He has painted himself into a corner. He believes (hopes?) that if he can ensure there is sufficient economic growth all will be well.
I am not so sure.
I am no Economist but I am okay at maths. And the maths doesn’t look flash when coupled with all the other spending priorities in this economy – public education and health being the two biggies. Oh, and handing out billions to the lazy and indolent along with a minority of less fortunate (no shame there if they really cannot work) because no Government has the balls to make people get off their backsides and find work.
At the risk of digressing (hey, you know me…) in this week’s Manpower Survey over 48% of New Zealand employers found ‘difficulty’ in filling vacancies in the past year. That’s half!! How can we have 6.3% unemployment and yet even unskilled vacancies get no applicants?
Answer – welfare – too easy to get on – too hard to get off. Too many people simply do not wish to work. Or enter training and up-skill themselves. Well I could fix that in a jiffy! I’d be a one term Prime Minister for sure but I’d take a pinch of Singapore and a dash of the USA and mix it with a drop of South Africa and out of that you’d have something a little less draining on the public purse.
And that by the way is why it is taking my fluent English speaking clients between 4-6 weeks to find jobs even when they land here without their residence visas or even work visas. But that’s another story.
Back to the question at hand…..
Of course we do have over 1.7 million New Zealanders now enrolled in Kiwisaver which is our ‘voluntary’ retirement saving programme (employer contributes 2%, you contribute up to 8%) and the Government provides a tax credit of $560 a year so it is a no brainer not to join it. It would be a simple step now to move to a compulsory system – who is left to complain when most people have opted in anyway? This would have all sorts of positive impacts on the voting populations’ future expectations and needs from Government. There are plenty of arguments that compulsory schemes do not much alter overall savings but in my own case it has – I now save as there is no way I want to live on $600 a week!
The only solution as I see it (short of becoming the next Saudi Arabia – apparently the oil is there we just need to get at it) is some combination of:
• Kiwisaver becoming compulsory
• Raising the age of eligibility – hell, we live for 15 years on average on the pension – it wasn’t meant to sustain people for close to quarter of their lives. When the concept was introduced back in 1937 it was only meant to sustain them for the last 2 years!
• Means test it – give a little more to those at the bottom of the heap (sorry readers in America – call me a Socialist!) and less to those at the top end.
So that was my answer. The greying population. Our greatest challenge that our current Government appears unwilling to tackle.
Until next week