Why is there this talk about increasing the age of eligibility

Why is there this talk about increasing the age of eligibility when reintroducing the taxation surcharge has not been mooted?

John Key has been quoted that he considered suggesting an increase in the age of eligibility to obviate superannuation problems as being his most regretted political statement, but he is now testing the waters by way of these Right-wing stooges. He has said that he will resign as leader of the National Party if there is any change to superannuation rates or entitlement.

Altering the age of eligibility is definitely a change to entitlement, but changing the marginal rate of taxation on additional income is outside his undertaking.

Fred Hamer should not have received both his income (without a taxation surcharge) from working as well as full National Superannuation. There are people almost doubling their income overnight on their 65th birthday, while there is average 19.5% youth unemployment and up to 50% in some age-groups and areas.

There are jobs summit suggestions about encouraging early retirement at the same time as National Superannuation is totally unaligned.

Despite what Muldoon called it, National Superannuation is a welfare benefit. To say that there should be unconditional entitlement to receiving it is nonsensical. I have spoken to many retired, or near retired, persons and all see the receipt of National Superannuation without a surcharge on other income as an anomaly (perhaps the biggest anomaly) in New Zealand's social welfare system.

When Muldoon introduced National Superannuation for all, the top marginal rate of taxation was 66 per cent. In essence, this meant a significantly lower transfer payment to those receiving significant other income. Since then personal income taxation rates have been lowered (and a top rate of 30% is mooted) and GST has been imposed. Those continuing to work after reaching age 65 are receiving a much greater benefit than they would have when National Superannuation was first introduced.

My opinion is that a progressive surcharge should be applied. Investment income should be exempt so as not to discourage savings. An amount of supplementary business or employment income taking an individual's total income to the equivalent of an average wage should be tax exempt. Thereafter, a progressive marginal income tax rate should be applied, unless the individual opts out of receiving National Superannuation.

The "married rate" should go and National Superannuation should be paid only to individuals and the above regime be applied on an individual basis. The spouse of a Superannuitant who has not reached age 65 should be entitled to receive a single adult unemployment benefit without obligation to be work-tested.

There might be some loopholes (trusts, or something), but these would not be as anomalous in aggregate as the present system of receiving both National Superannuation and employment or business income free from taxation surcharge.

If this does not address forecast actuarial shortfalls in superannuation provisions, then a surcharge on some level of investment income should be the next option.