Monthly Archives: August 2013

NZ Super Cost Less Than Forecast

Auckland University’s latest Pension Briefing forecast that future the costs of NZ Super  be less than previously estimated.

Comment by Alec Waugh, Kaspanz Chair:-

The Treasury’s latest estimates of the long-term cost of New Zealand Superannuation were released on 11 July. Despite often-gloomy predictions about the “unaffordable” NZS, what is the scale of the affordability problem? (2013) The trend of New Zealanders working longer is cutting into the costs of funding NZ Super, and those working past 65 had doubled over the last 3 decades, with it likely to double again over the 3 decades. NZ Super is taxable and the aged group is contributing in this manner, and  many other ways towards reasonable fiscal    outlooks and outcomes. Net costs of Super have been revised downwards in the latest revision, and this indicator counters the crisis rhetoric of many commentators, who also often use gross figures to exaggerate their costing assumptions. Remember long term projections e.g. 2050 are practically worthless as  accurate assumption tools.

Our Chair’s letter re Sunday Star Times “Sweet dealing Super for Baby Boomers”

Sunday Star Times Published today, 4 August  heading SUPER IS SUPER

Mark Brighouse “Sweet dealing Super for Baby Boomers” read like an apology for  the Generation X inability to plan or take a positive future approach, in preference to “the want it now” wish list. The answer to the Brighouse dilemma stares him in the face. The New Zealand Superannuation Scheme is a world leader with its simplicity and universality, and anyone advocating its demise, or replacement with a different formula, needs to examine their own financial and social knowledge. At a current 3.7% of GDP, we have one of the lowest cost schemes in the world, and over reasonable time spans, this will continue to be cost effective, and easy to implement. Its universality will avoid the costs and charade of asset and income testing regimes, and the impact of the current model satisfies a multitude of societal requirements and well-being standards.   The only reason New Zealand will not retain current entitlements or in a similar form, consistent with the additional Kiwi Saver income stream, will be silly thinking or poor decision making by future governments. Current media commentators are yet to get the message our New Zealand Super model is the “crème de crème”. With a focus on economic productivity, the aged continuing to work longer and pay tax, and new measures and approaches which always appear over time, our unique  taxable New Zealand  Superannuation is model  is sustainable and equitable

Alec Waugh