BusinessNZ’s Post

Thanks Catherine. Don’t disagree - but I would like us to be more agile in our thinking about what people can and will contribute and how and when they do this in their lifetime. I think we risk being too linear in our conversation about our futures. For instance it can go like this “You start working at a certain age and head to another age then stop and need a hand to live out the rest of your years”. Is that really what is happening? The stats show marked increase in workforce participation until mid 70s and that is from the people who thought 20 years ago stopping work in your 60s was a thing. Is this because people have to work? What % is because people want to? Is this more a story about the impact of longevity rather than a story about aging (or a bit of both)? Why does the language matter? Because it implies something different is possible about the contributions that can be made throughout your lifetime, how you can support productivity in NZ through your life and what policy settings can enable this? Do we think our future selves will just be old and incapable of contributing or is there an increasing group of NZers keen to be more agile in their expectations of their futureselves than that?

By 2050 most people will have a substantial Kiwisaver account by age 65. Some people may need government assistance. This can effectively mean that the Pension as we know it could be scaled back considerably. The problem can be using an asset test because that encourages people to spend or hide their assets and then receive the public pension. There are some ways around this however. If a persons taxable income from age 30-60 is totalled up and is more than a certain amount then that could be the test rather than assets alone. If a person earns a total of more than $10 million over a 25 year period between 30-60 years old then that could disqualify them from receiving a public pension. In this scenario the capital gains that people make from selling assets could be recorded and calculated but not taxed. So there need not be a Capital Gains Tax. Your tax is that you do not get a pension if your income + capital gains over a 25 year period exceed $10 million. This seems like a high amount but it needs to account for inflation and it could not be implemented immediately so the earliest that such a mechanism could be put in place is 5-10 years in the future.

These two pictures sum it up for me. Net fiscal revenue from working age people. And we are running out of those people.

A really pertinent post, Catherine Beard. One correction: I don't believe that we're currently a First World country. Rather, we're somewhere between Third World and First World status.

Good read thanks Catherine! With our ageing population and strain on the healthcare system it’s critical to invest in medicines and vaccines to keep people well. We want to avoid the ambulance at the bottom of the cliff and ensure we help build sustainable healthcare systems, productive workforces and communities.

Immigration of high volumes of low wage migrants at a time of high unemployment and government austerity is a recipe for social unrest. There are lessons to be learnt from Europe

Human nature is that some think and save to sustain themselves in later life when they need to rest in a bit of comfort. Others make different personal decisions when young and live for the day by spending everything they earn. No thought of the future. Are “we savers” expected to subsidise by paying more tax to assist those who have a short day to day view on life and live it up and happen to live into old age? How will you feel when the assets we worked and saved for are whittled away by the govt for aged care when the person in a chair beside you in an aged care home has everything paid for by the Govt because they have zilch assets. The simplistic answer is extract a compulsory superannuation and untouchable contribution for all people during their working lives. It would at least feel equitable when you make friends with your neighbours in an aged care home. I rest my case in relation to NZ current Govt strategies.

I despair! Criticising todays tax and superannuation forgets that we endorsed the system we have today over decades - it’s pushed us down a prosperity hole and forced the cost of superannuation on to the next generation It won’t be fixed in one government term and it won’t be fixed by government alone It can only be fixed through changes that are going to hurt. This requires politicians and business to own the issue and have the courage to do things that add to incomes and prosperity This starts with spending on education and activity that creates value. This needs tax. It needs government non tax income like most nations have. Super come later

A lot of interesting discussion on the fiscal mechanics of dealing with an aging population but no mention of organically growing our population through support/encouragement of the family unit (ie. more kids). The bulk of the country's social investment should have a preference toward 0-18 year olds to provide the optimal start in life as well as growing the base of young taxpayers. At the other end of the spectrum, I'm also supportive of encouraging people to work for as long as they feel able rather than setting some mandated retirement age. Everyone has value regardless of age and we need to stop erecting these artificial barriers to societal engagement. Nothing should be off the table in terms of our thinking on this topic.

Good points, and I’d like to suggest something that your paper omits - babies! Supporting the decision of young people to have and raise multiple children while also protecting and improving their long-term productivity is vital not just for NZ but all nations facing demographic challenges. Most politically & culturally stable countries are now in this scenario. Family-friendly policies are the most effective investment the nation can make in its own long-term future. Looking at what suits over 60’s best over the next 20 years is short-termism (and selfishness?). Let’s imagine a truly multigenerational and intergenerational vision for NZ.