Transcript generated automatically by AI and may contain errors.
Chapter 1: What are the challenges facing New Zealand's retirement system?
You're listening to a Sharesies podcast. Max, the universal nature of New Zealand's superannuation system is one of the things that's historically made it maybe a bit more equitable than the Australian system. Do you think that there might be growing political pressure to actually means test the super payment?
Yeah, look, I think you can already see some of that pressure growing. We see all those stories about people who are earning over a million dollars and still getting New Zealand Super, things like that. I think it's tricky. I mean, I don't think we need to rush into any kind of decision like that.
I feel there's a bit of a sense of panic growing about the sustainability of New Zealand super, and I don't agree with that. Even on the Treasury's projections, if we do nothing around superannuation and health spending, in 20 years' time we'd just need the tax take of a normal European country. So tax would have to rise, but not to any particular amazing extent, even if we do nothing.
So there's quite a lot of runway. We can still say, look, the cost of super is going up a billion dollars a year or so. Could we spend that money better somewhere else? And in which case, how do we reduce the cost of super?
Chapter 2: Is means testing a viable solution for NZ Super?
If we were going to do that with the big options, raising the retirement age, sort of reducing the value of the payment so it goes in line with inflation rather than wages, or means testing it, Means testing is theoretically the best of those three options, but it's also politically incredibly hard. To be fair, you'd have to means test not just on income, but also on people's assets.
And that's very intrusive, very complicated. It would be an absolute political firestorm. I'm not ruling that out, but that's a very complicated discussion that, again, I think we're going to need to have very carefully as a country.
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