Quote Originally Posted by Aaron View Post
Interesting policy from National

https://www.nzherald.co.nz/nz/politi...JHQNDFU5SY2TA/

Indexing benefits to inflation rather than wages I don't care either way but I was wondering if anyone knew why national superannuation was excluded from this proposed change? It just seems inconsistent to me.

777 or Blackcap might know???
Historically NZS has been indexed differently to benefits. NZS - indexed to average wage, benefits indexed to CPI. Wages historically have risen faster than inflation.

New Zealand Superannuation was introduced in 1977 by the Third National government and was renamed New Zealand Superannuation in 1993. The scheme was a universal (not means-tested) scheme that paid 80% of the average wage to married people over 60.

The NZS was initially linked to 80% of average wage levels, but in 1989, it was no longer linked to wage levels and instead was increased by the lesser of price and wage.

NZ Super is adjusted every year. Last year’s increase was linked to the average wage, at a time when earnings were increasing faster than inflation. This year, NZS has been increased in line with inflation to help combat rapidly rising living costs.

The after-tax NZ Super rate for couples (who both qualify) was based on 66% of the ‘average ordinary time wage’ after tax. For single people, the after-tax NZ superannuation rate is around 40% of that average wage.

https://en.wikipedia.org/wiki/Welfare_in_New_Zealand

Benefits - prior to 2019, benefits, apart from superannuation, increased at the rate of CPI inflation (minus the inflation in tobacco and alcohol).

In 2019, the New Zealand government changed the annual adjustment of main benefits, indexing them to the average wage.
This was done to ensure that benefit rates would rise in line with wages, which historically have risen faster than inflation.
However, in 2021, inflation rose ahead of wages, causing the government to intervene and adjust benefits for inflation rather than wages.

In March 2023, the annual wage cost inflation remained at 4.3%.
In September 2023, the Labour party announced that they would retain fixing increases to benefits over time to increases in average wages.