It’s the younger generation versus the boomers, economist says
Economists are debating the long-term sustainability of New Zealand's superannuation system as the population ages. Concerns are rising that the current funding model places an unfair financial burden on younger generations compared to the benefits received by baby boomers.
Why it matters
This highlights a growing intergenerational wealth gap and the fiscal challenges nations face in maintaining social safety nets for aging populations.
New Zealand's young people will be frustrated to be asked to pay the bill for increasingly expensive NZ Super while having missed out on things like free education, which older generations benefited from, one economist says.
As politicians wrestle with questions about the age of eligibility for NZ Super, and how compulsory KiwiSaver might change the picture, there is increasing debate about the sustainability of our current system.
On one hand, Alec Waugh from the KiwiSaver Annuities New Zealand Superannuation Protection Society says people who call for change might be underestimating some of the other consequences that could come with it, such as more people on the unemployment benefit, or seeking hardship grants or accommodation supplements.
"At 4.4 percent of GDP net super, New Zealand's scheme is one of the cheapest, efficient and effective schemes, near half the costs of other countries schemes," he said.
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