It doesn't matter whether we vote left or right, red, blue, green, yellow, or black. We all have to give our political parties the cojones they need to enact the policies that will save this country. Treasury's been warning us for years now, decades. Current government policies —whichever government has been in— are not sustainable.
Treasury's 2025 long-term fiscal statement says population ageing is going to put unbearable pressure on New Zealand's long-term fiscal position. You know this. If you know anything about news, if you know anything about New Zealand politics, if you know anything about New Zealand society, you know this to be true.
ANZ senior economist Miles Workman says Treasury's report should be on the reading list of every New Zealander. Because, he says, I don't think politicians are going to be able to make the changes that are needed here until the voting public is behind those changes. And he's right.
In short, fiscal pressures will accelerate in coming decades with costs of superannuation and healthcare expected to rise significantly as the population ages. There is no one solution. In 1965, there were seven working-age New Zealanders for every person over 65. So that was seven working New Zealanders paying taxes for every person over 65, and for the most part, in 1965, those people on the Super weren't working. Today, we have four working-age New Zealanders to one person over 65. In 40 years, which is not a very long time, it'll be just two working New Zealanders to every person over 65. Successive governments have known this. Voters have known this.
But political parties need the support of voters to make the changes that are needed, as Infometrics principal economist Brad Olsen told Ryan Bridge last night.
ANZ senior economist Miles Workman says Treasury's report should be on the reading list of every New Zealander. Because, he says, I don't think politicians are going to be able to make the changes that are needed here until the voting public is behind those changes. And he's right.
In short, fiscal pressures will accelerate in coming decades with costs of superannuation and healthcare expected to rise significantly as the population ages. There is no one solution. In 1965, there were seven working-age New Zealanders for every person over 65. So that was seven working New Zealanders paying taxes for every person over 65, and for the most part, in 1965, those people on the Super weren't working. Today, we have four working-age New Zealanders to one person over 65. In 40 years, which is not a very long time, it'll be just two working New Zealanders to every person over 65. Successive governments have known this. Voters have known this.
But political parties need the support of voters to make the changes that are needed, as Infometrics principal economist Brad Olsen told Ryan Bridge last night.
“The worry a little bit is that we've had these warnings before. We had something very similar from the Treasury four years ago in 2021. And realistically, I think what the Treasury is continuing to highlight is that there's, there's a lot of big challenges in front of us. We don't have to solve them all tomorrow, but we really do have to start sometime soon to get us out of what looks like a very unsustainable pathway going forward. But, and here's the biggest kicker for me, you can't do any one thing and it will magically solve our sort of fiscal challenges. There's a lot that's going to have to happen that will be unpalatable to politicians across the political spectrum, but by goodness, we've got to start soon.”
It's only going to be “unpalatable” if political parties expect voters to act out of self-interest. And that's what I mean, it's on us to affect the changes.
I was talking earlier this week about the need for political parties to have a bipartisan approach to important issues like infrastructure and health and education curriculum. It's absolutely imperative. They can tinker around the edges, but it is incumbent upon them to have an infrastructure plan to stop the waste of money. And it's incumbent upon us to take a grown-up approach and look at the good of the country as a whole, not our immediate needs.
If you've got your Super, calm the farm – your gin money's quite safe. Nobody's taking it off you now. But those of us in the 45 to 60-year age group need to realise that we're the ones that need to affect the changes needed to keep the country alive by allowing politicians to introduce policies that if they tried to introduce them previously would have sent them to political oblivion.
There are options: raising the age of Super eligibility, broadening the tax base, (euphemism for fiscal drag and wealth taxes), index linking super payments to inflation rather than wages, means testing – these are all options. And another option is that New Zealand grows its wealth, that we become wealthier so we can afford it all. That's not looking likely. Treasury notes in the report that recent productivity trends have diverged from past projections, which means productivity growth over the past two decades has been weaker than predicted, averaging just 0.7% per year, and they expect that to last.
So, ask not what your country can do for you, but what you can do for your country.
I would like to think if we make the changes necessary, the Super will be there for those who need it. I would like to think that if we make the changes necessary, young people starting off in life, starting off with their families, will not be crippled by the burden of looking after people who were too lazy and self-interested to vote for the changes needed to spread the burden.
It's on us. We can't just look to the politicians – what are they going to do? They are only going to come out with policies that they think will appeal to us. Are we that childlike that we just want the sweets before we'll vote a political party in? We have to be grown-ups. We have to grasp the nettle and say this is tough and this is going to be ugly, but we're going to do our bit to ensure that New Zealand is a better society for future generations. That's the way it used to be, and we've dropped the ball.
You know, we can moan and grizzle all we like about the waste of money and the lack of purpose and the dithering around and the incompetence, but ultimately, if we want to affect change, it's on every voter in this country to do so.
Kerre McIvor, is a journalist, radio presenter, author and columnist. Currently hosts the Kerre Woodham mornings show on Newstalk ZB - where this article was sourced.
7 comments:
Another down economy under National, a tale as old as time! Wouldn’t’ve happened under Clark!
It's straightforward to solve this problem. Here is one way, but our Finance Minister won't do it. She won't read it, can't understand it, and is in the pockets of oligarch's with Key era bunkum advisers. Its a 'welfare: savings-not-taxation' reform. Willis announced the new RBNZ Governor at the same time Treasury revealed how NZ was going bankrupt - tells u everything about how she doesn't even care.
https://www.tandfonline.com/doi/full/10.1080/00779954.2025.2496872
Means testing of pensions, like a wealth tax, is not just a different kind of envy tax, it's a tax on being sensible with money throughout your life, and accumulating assets which will hopefully make your life in retirement a little easier, like getting a knee replacement in 1 month instead of 18.
As with all taxes, it will spawn and industry dedicated to avoiding them. There will always be people who will want to save for their retirement but this will just give them a good reason to do it invisibly.
Speaking for all superannuants if I may, is it our fault that the money we have paid to governments over the years for investment to pay for our pensions has not been used wisely? It's all the more galling when we see how wasteful govt's have become, from a forest of road cones around people leaning on their shovels playing with their phones to the burgeoning empires of public servants passing reports to each other, and then there's "The Treaty" industry. Our cussies across the ditch may have the most toxic fauna on the planet, but we have the biggest parasite.
Wish Robert MacCulloch would tell us what the answer is please
Luxon and his fellows promised they had the cojones to make the hard calls. Seems they have all placed their cojones in an inaccessible vault and become nonsexual creatures that roll over at the slightest pushback.
Great article Kerre, I agree. It is us who have let the rot in by our voting and we have no one else to blame.
We cannot go on like this but I’m afraid we will: debt is hidden but spending is visible as well as an easy and winnable way to win power.
We have let the government reach into every area of our lives and each news cycle comes with increasingly loud and persistent calls for the government to “do something” and we rub our hands and nod in agreement with them that yes, someone should do something.
We never talk anymore about what the government should leave alone, what freedoms they should guarantee even when it’s uncomfortable, what bullsh*t rules they should abolish because they add to burden.
We fret over councils losing a slight modicum of power to sign off a house like their word is infallible and guarantees a perfect home, we anguish over sub-1% of children that don’t have enough food for lunch instead of pointing a finger at their parents and we subsidise the very above average living standards of people who just can’t be bothered.
The trouble with handouts is always taking them away.
If we do not make the call to remove these luxuries that we can’t afford we will simply cease to have enough to hand out.
Are we ready to give up our superannuation? Our WFF subsidy? Our KiwiSaver top ups? Our generous welfare system? State houses? Free healthcare? Subsidised drugs? Sickness benefits? Free school? Hell, are we ready to give up subsidised university and last year free study? Interest-free student loans? Student allowances for over 25s? Living allowance? Winter energy payment? 10k business gifts for beneficiaries? I mean, it goes on and on and I haven’t even begun on all the local council treats.
I think we it comes down to it, things are going to have to get a lot more incomparable before we’re ready to have this conversation.
He did. Leave while you still can and before they introduce an "exit tax".
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