The challenge of New Zealand’s ageing population

The challenge of New Zealand’s ageing population

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.

Professor Weaver is one of the keynote speakers at the Retirement Income Policy and Intergenerational Equity conference in Wellington, being hosted this evening and tomorrow by the Institute of Income Policy Studies in association with the Retirement Commission.

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 making savings for retirement compulsory, 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.

ENDS