Tuesday, October 18, 2011

Lower the Māori retirement age

This post will outline the point of my latest essay.

There are some stark facts that jump out at when you investigate how retirement and Māori interact. These facts show inequity for Māori at every level of the debate and retirement reality. Let’s just lay them out:

Non-Māori males life expectancy at birth is around 79.0 years, and for male Māori, 70.4 years. Female non-Māori 83.0 years compared to female Māori of 75.1 years. So Māori can expect on average to live shorter lives than non-Māori – that’s a fact, and although life expectancy is increasing for everyone, the gain for Māori was less than for non-Māori when compared between, 1985 – 1987 and 2005 – 2007.

Okay what about leading up to retirement – what’s the story there?

Māori on average earn less than non-Māori and even when the qualifications were similar, the median incomes were still lower for Māori.

The are a number of measures of Māori participation in employment and the current information shows that the labour force participation rate for all people, in the year ending June 2011, was 68.3% compared to 66.1% for Māori. The unemployment rate for the same period for all people was 6.5% against 13.5% for Māori. They are facts, Māori earn less and a higher number are unemployed and that means disadvantage in the ability to save for retirement but other factors also need to be mentioned.

Māori are also a younger population, with higher birth rates, more dependants and less disposable income. Any surplus is often directed towards the younger generation which reduces again, the opportunities to save.

All of these facts result in a higher percentage of Māori indicating NZSuper as their sole income. The crucial years of saving from around 50 upwards, for many of the population, is when the mortgage is paid off, the kids have left home. But the facts show that 67% of Māori have achieved home ownership, with or without a mortgage, by the age of 65, which contrasts with non-Māori at 81%.

Every part of the retirement debate ignores the cultural interactions and responsibilities that come for many older Māori and these often begin well before retirement and they incur a financial cost for older Māori. A cost that is not applicable to non-Māori, and after retirement the inequality is just as apparent, and not just in longevity.

The ‘Living standards of older Māori’ study (2002 reported that 15% of older Māori, compared with 10% of non-Māori, face some financial difficulties with a further 20% of older Māori facing severe difficulties, in stark contrast to a further 6% for the older population generally. Added to this is the knowledge that single older Māori tend to be in a worse situation financially, often the death of a spouse is a major contributor to this, with older Māori women being particularly vulnerable.

Within a whānau, older Māori support, and are supported, with 78% of respondents providing care for their whānau and most saying they received care from whānau. (Waldon, 2004). I am not going to go into iwi initiatives to support and help older Māori because I’m looking at the structural inequalities and as the facts show there is no equality for Māori.

I blame the Government and their abuse of Māori in not actualising the Treaty of Waitangi, specifically Article 2 and 3. Even today scant regard is paid to tangata whenua and their specific circumstances. It is not good enough to treat Māori as a sub-group of the general population, the facts burn the eyes, yet the powers that be, refuse to see. They prefer Māori to be disadvantaged, it is deliberate. The facts are known, they are the Governments own facts FFS.

There are other aspects I could describe like the relationship between financial literacy, self determination and the management of iwi pūtea – the management outsourced for most, to non-iwi members.

These inequities are wrong and shameful for this country and our Government yesterday, and today, and show one of the reasons tino rangatiratanga is needed – there is no alternative. Māori should have fairness and equality throughout life and that all needs to be fixed. One small but significant step that Government could do to really help Māori today, is that the payment for NZSuper should kick in earlier for Māori, the retirement age for Māori should be lowered.

There should be an equal partnership between the Crown and Māori, and the role of older Māori, as kaumātua and custodians of knowledge should be exalted. Not all Māori wish to or are able to fulfil that role, but many are involved with their whānau and knowledge is being imparted. Reducing the retirement age for kaumātua would allow them to fulfil their cultural function and responsibilities without the current financial cost, and dismantling that barrier to participation for older Māori could create an upsurge in marae activity and show an honest movement from the Government towards equality for Māori. This would actualise the treaty and the partnership inherent within that document.

This aligns with tino rangatiratanga and provides even more opportunities and responsibilities culturally for older Māori, leading to richer more rewarding lives. in later life for them, including better health outcomes.

Reducing the retirement age for Māori would alleviate some of the stressors for older Māori and add real benefits for the individual retirees, their whānau, hapū and iwi, the Māori Nation and the country as a whole.


Anonymous said...

I agree with your points regarding how Maori may be disadvantaged but to base a retirement age just on race is too simplistic.

The most obvious problem - how do you classify someone as being Maori in the first place?? How about someone who is 50% Maori? Or maybe 25% Maori? Where do you draw the line?

As you have mentioned, aside from mortality, the financial position of a person at retirement is quite different for Maori on average compared to non-Maori (rates of home ownership at retirement etc). But these are just averages. How about those Maori who are home owners then? If the retirement age was lowered for them, they will now be advantaged compared to a non-Maori retiree. Where is the equity in that?

For the same reason that insurance cannot be risk rated based on race alone, it does not make sense (or is it fair) to have different retirement ages for different ethnicities. I agree that having just a flat NZ super and one age for retirement is perhaps not perfect. But if your concern is mortality (another way to look at it – number of years someone can enjoy retirement), and financial circumstance at retirement (and therefore the need for NZ super), this can be achieved using a more objective basis than just ethnicity alone. For example, smoking status is highly linked to mortality and therefore, for example, maybe smokers can have a lower retirement age (I suspect that the higher mortality for Maori is at least partly due to higher rates of smoking among Maori). In terms of addressing the inequity arising from different financial circumstances, maybe NZ super should be means/asset tested, with more going towards those who are less financially well off. Of course, when we only have an optional retirement programme (Kiwisaver) as opposed to a compulsory scheme, this raises another question of are we disincentivising people to save by asset testing NZ Super?

Any changes to the retirement scheme will have to be drafted up carefully as to not replace one form of inequality with another, and to make sure that the right behaviours are encouraged.

Marty Mars said...

Kia ora anon

You raise fair points. If the determination of ethnicity is made at the end then it can also be used at the beginning in terms of who would qualify. I agree that there are tricky areas around it.

In my analysis I try to see the thing and the impact of the thing. Lowering the retirement age is a thing to do but what effect would it have and what are the desired outcomes. For me i want to see a better quality of life for our elders and there is a cultural aspect to that. It's about reducing barriers to allow roles and functions to be realised. So the money isn't the real issue creating the space for people is.

Of course costs have to be considered but they would be small really and the gains for the country could be great.

The whole issue is worthy of debate so I'd be interested in your further thoughts anon.