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The challenge of New Zealand's ageing population
21 July 2010
Professor Kent Weaver, an international expert on social policy, is urging New Zealand politicians to take up the challenge of addressing issues surrounding the country’s ageing population.
According to Professor Weaver, it is common for governments all around the world to delay addressing the financial and social challenges associated with ageing populations because retirement income policy is not regarded as a vote winner.
“Politicians everywhere delay making changes to retirement income policy because the options, such as raising the age of pension eligibility and mandating requirements for increased savings, are unpleasant and may jeopardise precious votes,” he says.
Director of the Institute of Policy Studies at Victoria University, Jonathan Boston, says the implications of demographic change in New Zealand need to be addressed soon to avoid abrupt and potentially disruptive and damaging policy changes in the future.
“The ratio of older New Zealanders to younger is going to keep increasing for several decades. Unless we start to discuss how best to prepare for the rise in the number of people retiring, and take some action, the costs of pensions and other factors involved in supporting an ageing population will eventually become a significant problem for all New Zealanders.
“We currently spend around 4% of our GDP on superannuation and that is expected to grow to close to 8% by 2030*. The extra money required needs to come from somewhere, and that’s going to require a shift in government priorities and policy settings,” Professor Boston says.
The conference will set out the key issues and lead discussions about how these issues may be addressed. The conference outcomes will contribute to the Retirement Commission’s three-yearly mandated review of retirement income policies, due in December this year.
To interview Kent Weaver or Jonathan Boston, please contact:
Anna Calver, anna@sputnik.co.nz, 04-801 9485, 021 0221 5900
Notes to editors
*Figures sourced from Treasury, Financing New Zealand Superannuation working paper, 2001, http://www.treasury.govt.nz/publications/research-policy/wp/2001/01-20//twp01-20.pdf
The projected 8% of GDP spent on pensions by 2030 is based on demographics only, without potential policy changes or the estimate of the full, original operation of the Cullen fund
