Treasury says pension age should rise to 72. Do any politicians dare to agree?

Tuesday, 30 September 2025

Luxon is backing Nicola Willis after New Zealand’s economy shrank 0.9% in the June quarter. As pressure mounts, the Government is touting infrastructure investment while new polling shows a majority believe the country is on the wrong track.

A sobering report from Treasury paints a picture of extreme debt if taxes don’t rise or the pension age isn’t increased. But neither of those policies are election-winners, so is there any political consensus?

For decades, the pension age has been the elephant in the room and most politicians have just tiptoed around. Those who have dared touch it, have been stomped on by the electorate.

Labour campaigned in 2011 to move it to 67. They got pummelled in that election and the policy was later dropped. In 2017, then-Prime Minister Bill English announced the age would increase in 2037 from 65 to 67. National lost that year’s election.

It’s still National’s policy to increase the superannuation age, but that didn’t become a coalition government policy because New Zealand First is hell bent on it staying at 65.

So all this time, politicians have just put it in the too-hard basket, letting the fiscal time bomb tick away, occasionally pointing out its existence by saying ‘we need to have a discussion as a nation about superannuation’.

Treasury’s sobering report

Treasury’s latest long-term fiscal report (interestingly released just as the new Reserve Bank governor was announced) takes the lid off this basket and paints a dire picture of what government debt will be in 2065 if nothing is done to the pension age.

Government debt will be 200% of GDP (the size of the economy). It’s currently 43% which is around $187b.

To keep the superannuation bill at 5.1% of GDP, Treasury says the age needs to gradually increase to 72 over the next 40 years.

It offers alternatives as well - although neither are politically palatable: raising income tax rates by a third or increasing GST from 15% to 32% by 2065. Cuts to health and welfare are also suggested.

“If New Zealand continues to delay change, we will instead be squeezing people born in future decades. The longer we wait, the greater the transition cost will become,” the report says.

It also says the sooner the transition to an age of 72 begins, the more time people will have to prepare.

“Starting earlier provides more opportunities to share those costs, rather than leaving larger and more disruptive change to future generations.

“Pre-announcing a planned and incremental approach also enables people to change their plans around how much they work and save,” it says.

Will politicians do anything?

No. And those who will do something won’t go nearly as far as Treasury suggests.

Only National and ACT are open to increasing the pension age. ACT wants it to increase by two months each year until it hits 67, while National wants to gradually lift it to 67 but not until 2040.

As Treasury was releasing its long-term fiscal statement report, Willis was unveiling her new RBNZ governor.

All the other parties currently in Parliament want it to stay at 65.

What’s the rationale?

National: Its finance spokesperson - and the current Finance Minister - says there’s not one big radical change that can sort the fiscal position.

“Long-term fiscal sustainability is something successive governments will have to chip away at over the next few decades,” she says.

“Treasury says in the report that an important first step is returning to surplus and bringing debt down to more prudent levels. That is precisely what this Government is doing.”

Regarding the superannuation age and whether all parties need to agree to increase it, Willis says “parties will have another opportunity to put forward their policies on these issues at the next election and in subsequent elections”.

Labour: It’s committed to keeping the pension age at 65, and boosting funding for services like health. How it will afford it will be unveiled “over the next year” in its economic plan.

“We need to look at how we tackle the structural issues and have a mature conversation about how to prepare for the future without the scaremongering tactics that have been deployed in the past,” says finance spokesperson Barbara Edmonds.

“I am committed to that conversation. There are huge fiscal challenges ahead for New Zealand and National’s only plan is to cut the services Kiwis rely on,” she says.

ACT: Leader David Seymour - who’s also Associate Finance Minister - believes it’s inevitable superannuation settings will have to change given the financial burden they’re increasingly becoming.

“Hard choices are coming our way. Either we’re going to need to tax productive people even harder, keep piling debt on future generations, or start saving some money. It’s no secret that ACT will be advocating for the latter,” he says.

“The current government has started down the right path. Obviously it hasn’t gone as far as ACT would like to and we need to keep making savings in areas that aren’t delivering results for New Zealanders,” Seymour says.

When the pension scheme is changed, Seymour says it must be sustainable for New Zealanders and include provisions like flexibility around when people can access their Kiwisaver.

Green Party: “We don’t support raising the pension age,” says economic development spokesperson Julie Anne Genter.

Why? Because she believes the massive fiscal hole can be filled in by introducing a wealth tax, rather than cuts to services that benefit everyone.

“Treasury's prescription of GST hikes, cuts to public services, and cuts to pensions mean working and low-income New Zealanders would once again bear the burden of our broken economic system, while the $100 billion of wealth held by rich listers isn’t taxed,” she says.

“In a wealthy country like ours, nobody should retire into poverty. Universal superannuation must be protected so all New Zealanders are guaranteed a decent income when they retire, regardless of their background,” Genter argues.

Do the Greens support a cross-party agreement on increasing super? Nope. Genter says voters deserve to have a choice and politicians need to make the case to them.

Te Pāti Māori: At the last election, Te Pāti Māori campaigned on lowering the superannuation age for Māori given life expectancy rates for Māori are seven years behind non-Māori.

“We cannot support raising the retirement age, as doing so would only deepen this inequity,” a party spokesperson says.

Like the Green Party, they support a wealth tax to pay for it “rather than continuing to place the burden on hard-working people”.

“The current superannuation age discriminates against Māori. On average, our people die seven years earlier than others in Aotearoa, meaning we receive seven fewer years of superannuation,” the spokesperson says.

NZ First: Stuff didn’t receive a response but their website says “the age of retirement will remain at 65 years. No ifs, buts, or maybes”.