Nicola Willis: Finance Minister on the OECD report looking at the impact of our current superannuation settings on the economy
episodeTranscript
jump: chapters · speakers · find in transcriptTranscript
Transcript generated automatically by AI and may contain errors.
What insights does the OECD report provide on New Zealand's superannuation?
So the OECD had a word about New Zealand Inc. yesterday. They've weighed in on the super debate. Of course, they want eligibility linked to life expectancy. We head eventually to 69. Also, some means testing for the top 10% of earners. Nicola Willis, Finance Minister, back with us. Morning.
Good morning, Mike.
How is Singapore?
It was very positive, and that's an excellent relationship we have with a fast-growing country. We're already doing $11 billion worth of trade, and there's potential to grow a lot more, which equals Kiwi jobs, better incomes for us.
How is the rising cost of superannuation affecting taxpayers?
Good. IMF, OECD, UN, everyone's got a say on us. Do we care?
Well, look, they offer an external perspective, which I think is useful, not to just be self-dwelling and look at our own navels. Obviously, anything they say, we then need to decide what suits us and our country and our national interests. But I enjoy policy insights from others.
I mean, they say we should be doing something about superannuation. We're not going to. So is that the beginning, the middle and the end of it?
Well, no, we are going to have to do something. If you're sensible, you listen to these facts and you think, well, that's not sustainable. In the 1960s, there were around seven New Zealanders of working age for every person aged 65 or older. Today, there are four. And by 2065, there will only be two. So that burden on our taxpayers is increasing significantly. Already between last year and the end of the fiscal period, the cost of New Zealand superannuation will increase by about $6 billion a year. It's rising as a proportion of what we tax you for. So it's currently just over 16%. It's going to rise to over 20%. And every dollar we're spending on superannuation is a dollar not available. Education, for health, for infrastructure.
So gradually, over time, some changes will need to be made. They don't need to be as dramatic as the OECD suggests, but some adjustments will be needed.
More pressing for me was when he said electricity or power in this country is no longer cheap. I mean, surely that's an alarm bell, isn't it?
It is an alarm bell and their analysis is the same as ours, which is the problem is with gas drying up, that creates a risk to everyone wanting to invest in generation. And so in the absence of some backup firming capacity for when those hydro lakes run low, we can only expect the price to keep going up. The report suggests that, yep, an LNG import facility would be a good transition tool so that we don't run out in the short term. And then over the long term, technology will help us. There'll be better batteries. Our hydro facilities will be able to do more. But in the meantime, we've got an immediate issue. And if we don't solve it, we can't expect the investment and therefore the lower prices we all want.
Is the investment to your eye at the moment going to bring us abundance, which is what Richard Prebble was talking about earlier on this week? Abundance versus constraint. Do we have abundance? Will we get abundance?
We can have abundance because unlike many other countries, we have the capacity to create a lot more renewable energy. We've already seen a big uptick in the amount of solar farms and wind farms going up. But the constraint on that, ironically, is if they don't think they can get back up generation when their sun isn't shining or their wind isn't blowing. then they are reluctant to invest because what is the products they will have to sell to consumers? So what the analysis says is actually if you know you've got backup, whether it's that coal being burned at Huntly, whether it's that LNG facility or whether in time it's more natural gas, then others will be more prepared to invest in renewable energy and you can get to abundance.
That's our vision. We want an electrified economy. We want more renewable energy. But giving people the confidence to invest is the key factor.
You have a good weekend. Nicola Willis, Finance Minister.
No segments match your search.
Select any passage to copy it with its citation or turn it into a shareable card.
Chapters
2 chaptersSpeakers
2 identifiedMore from The Mike Hosking Breakfast
Richard Arnold: US correspondent on Bill Gates warning that AI growth can't keep 'going unchecked'
Steve Price: Australian correspondent on Pauline Hanson being named preferred Prime Minister in Queensland
Commentary Box: Andrew Saville and Jason Pine discuss the AFL grand final and Counties Manukau winning the Ranfurly Shield
Paul Goldsmith: Justice Minister on 90 reported citizen's arrests being carried out since powers began
David Satterfield: former US Ambassador in the Middle East on whether Trump rejecting Iran deal will impact US mid-terms
Brigitte Morten: political commentator on Labour and National launching their election campaigns ahead of November 7