NZ Super is Not Unaffordable

Many economic commentators have spread doom and gloom about the future of NZS, urging the Government to urgently curtail spending on this entitlement! Fortunately, the truth emerges, and the fake news dispelled. Max Rashbrooke, senior research fellow in the school of government at Victoria University of Wellington, in an opinion piece in The Post on June 28th, has exposed the fake news. “One of the firmest beliefs held by elite commentators – and one of the most ill-founded – is that New Zealand Superannuation is unaffordable.”

The NZ Society of Actuaries has elegantly summarised the situation in their January 2024 paper on NZ Superannuation: An actuarial view on reform :-

“We therefore are still of the view that it is not necessary to reform NZS. Debate usually focuses on the “cost” of NZS, which is often portrayed wrongly as in crisis. Contrary arguments which stress the value and purpose of NZS are strong. No reform to NZS is without difficulties.

We need to recognise trends which argue against diminishing the role or restricting the value of NZS. Today’s younger people may need NZS more than older generations. Although younger people can save in KiwiSaver for longer than older people could, they may have less potential to both own a home and save. KiwiSaver balances are not going to be high enough to allow any painless reduction in NZS. And inequalities in length of life are significant and visible to the extent that they should be addressed before planning to make them worse.”

Grey Power has submitted to the Retirement Commission’s 2025 Review of Retirement Income Policies urging that the settings of NZS remain unchanged to provide financial security and confidence to current and future retirees in New Zealand. To read our full submission please CLICK HERE