October 13, 2013

Think of a number and multiply by 80000

Bernard Hickey in the Herald

Imagine the public outrage if it were discovered that more than 80,000 New Zealanders were receiving wages, salaries and investment incomes of more than $6 billion a year, but were also receiving a benefit from the Government.

and

Income figures this week from Statistics NZ show more than 80,000 New Zealanders over the age of 65 receive wages, salaries and investment returns of more than $6.5 billion a year while claiming NZ Super.

It certainly helps to summon the outrage if you uses totals rather than averages. I  think there could be a reasonable case for means-testing NZ Super, but these numbers are not a contribution to informed public debate.

I’m not even sure where he got the data: he says “income figures this week from Statistics NZ”, and the only plausible source on the Stats NZ release calendar seems to be the NZ Income Survey, released on October 4. But in the NZ Income Survey data, table 8 says there are only 53,900 people aged 65+ with income above $1150/wk, which works out to just under $60000/year (including their NZ Super, of course).  His figures could still be right — perhaps the very wealthy people at the top drag the total up —  but they can only be right in the same sense as Bill English‘s “people earning under $110000 collectively pay no net income tax”.

Imagine the public outrage if it were discovered that nearly 54000 retired New Zealanders were earning over $45000/yr  from investments and salaries and still collecting NZ Super as well. Go on, imagine it.

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Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »

Comments

  • avatar
    Martin Kealey

    This all of course assumes that superannuation is a “benefit” rather than the payout on an “investment”.

    «Imagine the outrage if it was revealed that most people with incomes over $XXXXX per annum were *also* receiving investment returns…»

    It all depends how you spin it.

    Let’s not forget, until the previous Muldoon government diverted it into the government’s consolidated account, there HAD been a collective savings fund for superannuation. Arguably the consolidated account was drawn down by considerably more than that in the long run, but that’s hardly the fault of current retirees.

    1 year ago Reply

    • avatar
      Thomas Lumley

      Sure. But the case for treating it as an investment is relatively weak, considering that there’s no specific payment earmarked for it, and the payouts are unrelated to income or tax paid or anything (in contrast to Social Security in the US, for example).

      The better case for it being an entitlement is that people have planned their investments under the assumption that something like the NZ Super scheme will exist, so there’s some sort of implied contract.

      1 year ago Reply

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