David Farrar: The bigger cost saving for NZ Super

Henry Cooke writes:

There are good reasons for our politicians to look seriously at the long-term affordability of superannuation.

It is by far our largest benefit, and largest single-ticket item, taking up around 16.6% of tax revenue and 5% of GDP. It costs close to five times what we spend on the unemployment benefit or more than our entire educational system. And given we are both living longer and having fewer children it seems set to eat up more and more of the wider budget. …

David Farrar: KiwiSaver moving to 6%

National announced that if re-elected they will increase the default KiwiSaver contribution rates from 3% to 4% (already announced as government policy) and then to 6%. The rates will be:

Roger Partridge: What Did New Zealand Do With Its Trillion Dollars?

A familiar lament has resurfaced in recent weeks: that Robert Muldoon’s decision to cancel Norm Kirk’s 1975 compulsory superannuation scheme cost New Zealand a trillion-dollar nest egg. The Government’s weekend signal of higher KiwiSaver contributions has given that argument new life, encouraging some to reach again for the comparison. New Zealand, we are told, might otherwise be an “Antipodean Tiger.”

Guest Post: On the long-term costs of New Zealand Superannuation: more affordable now?

A guest post on Kiwiblog by Michael Littlewood:

As New Zealand’s population ages and, in particular, as the proportion of over-65s increases, the cost of New Zealand Superannuation (NZS) is rising. We know that and it doesn’t help us understand the issues to create headlines that catastrophise the expected costs.

The pensions payable in the future, public and private, will be claims on tomorrow’s economy, so the best way to express the expected cost of NZS is as a proportion of tomorrow’s economy. At present, this is probably best measured by the Gross Domestic Product (GDP). This is not a perfect measure, given the number of factors that bear on its calculation, particularly for long periods into the future. But it’s the best we have.

Mike's Minute: We can't get out of our own way on Super

From the "we can't get out of our own way" file comes the question, as posed this week by the Retirement Commissioner, as to whether people who have money in the bank should get the pension.

The first part that is wrong with that is I thought we had decided many a decade ago, rightly or wrongly, that Super is an entitlement.

Mike's Minute: The Census work numbers give me hope

The Census, and some of those numbers released this week, really are a treasure trove of not just fact and stats but, I would have thought, hope.

That astonishing move south, with the tens of thousands who have headed to the South Island and particularly Christchurch, is a framework for what the whole country could be.

Heather du Plessis-Allan: Don't touch my pension

Let's talk about this business with the pension age.

Chris Luxon has said today twice that he wants the pension age to go up to 67.

He said it once on Kerre’s show this morning, and then at a post-budget lunch speaking to business leaders, he repeated it and he told them that this is basically going to be election policy for National next year.

Lindsay Mitchell: RNZ showcases why nobody trusts mainstream media

A brief post to set the record straight.

Today RNZ is running an article entitled, Do you know what people on benefits actually get?

NZCPR Newsletter: Transforming Our Future

When Labour launched their failed Three Waters scheme in 2021, which aimed to confiscate council water services and amalgamate them into mega-authorities controlled by Maori, one of the major concerns raised was over the financing of the scheme.

The quantum of the proposed debt was eye-watering - some $180 billion was to be borrowed. Their figures were made more attractive because the repayment of that debt fell outside of their 30-year cash flow projections!

This controversial funding arrangement was likened to a Ponzi scheme – one day the chickens would come home to roost and the money would have to be paid back.

Heather du Plessis-Allan: Consensus Politics can take a hike

You know what's more boring than talking about a capital gains tax? It’s talking about superannuation, and yet here we are again.  

We're talking about it again, and how we need to take the Super off the 65 year olds because of what happened yesterday.  

Now what happened yesterday was that for a brief minute, the two major political parties almost found consensus on the Super, but it only lasted a few hours.

Max Salmon: The young stand to suffer as ageing population bites

New Zealand's superannuation scheme is laudable for its universal and simple approach to ensuring dignity for our elders. However, the system's simplicity obscures unfortunate truth – it will punish our younger generations.

The current superannuation system (and the wider welfare state) is dependent on the taxes of the working population, a portion of which it receives. This system is functional, provided the ratio of working people to retired people does not change dramatically.

Mike's Minute: We don't need a super debate right now

The odd stat of the week was the 50,000 people who claim superannuation but also earn over $100,000 a year.

That doesn't mean anything. But as a result of that odd stat, yet again off we went down a bit of a rabbit hole debating superannuation and its many and various outworkings.

David Farrar: NZ Super should be means tested and age increased

Stuff report:

Almost 50,000 people claim NZ Super while also earning more than $100,000 a year, data from the Retirement Commission shows – and income-testing them could be one way to make the system more affordable.

There have been concerns that NZ Super will become too expensive as a growing proportion of the population reaches the age of 65.

Kerre Woodham: What's the right solution for the future of NZ Super?

I did laugh when I saw the Retirement Commissioner’s report out yesterday, because I thought here we go again, round it comes the first of the twice-yearly discussions on whether we should lift the age of eligibility for the New Zealand Super- which we have been discussing for as long as I have been a journalist, I think, and that is a very, very long time.

Peter Winsley: How sustainable is New Zealand Superannuation and what are the alternative policy options?

Debate on superannuation focuses on the eligibility age and long-term fiscal sustainability. Only rarely is the connection made between superannuation and retirement savings policies, and economic performance.

Since around 1950 New Zealand has been in relative economic decline, and its productivity has been stagnating for many years. Key to this has been low domestic saving rates, which translate into thin capital markets, investment short-termism and to a low ratio of capital to labour, constraining labour productivity. Low domestic savings rates mean high real interest rates and a real exchange rate that weakens our tradeable sector.

Chris Trotter: Dangerous Generations?

ON SATURDAY (1/4/23) SHAMUBEEL EAQUB came out swinging against the Baby Boom Generation on TV3’s The Nation. The Gen-X economist was adamant that the New Zealanders born between 1946 and 1965 had guaranteed themselves a universal retirement income, which they were now enjoying, regardless of the economic impact on subsequent generations. Outraged that the Boomers, not having saved for their retirement, continue to live on “welfare”, Eaqub made it clear that he regarded NZ Superannuation as a form of intergenerational theft. It was unaffordable, unsustainable, and it had to stop.