How to fix Super, once and for all

Sunday, 14 June 2026

The only way you will get voters comfortable with reducing the scope of National Super - by either increasing the retirement age and/or means testing - is for Kiwis to have enough in their KiwiSaver account, and other investments, to fund the retirement they want, says Sam Stubbs.

Sam Stubbs is the managing director of KiwiSaver fund Simplicity and a regular commentator on financial and economic issues.

OPINION: The recent budget is an example of the future of our National finances - pardon the pun. The message was that if we are to take our future finances seriously, there is not much wiggle room, with only small amounts available for critical issues. The words “sensible” and “realistic” were used by supporters, “catastrophic” by the opposition.

But to all, the long consequences are clear: A slow erosion of overall funding for big things that matter to us. To me, it was a “get used to it” Budget.

Why to we need to temper our hopes? Because there is a 100 pound gorilla in the room that’s starting to break the china - National Superannuation.

The numbers are scary. By 2030, National Super costs will rise to $31 billion a year, up from $24.7b now. That means the extra $6.3b for National Super payments, per year, by 2030, has to come from somewhere else. Obvious targets are the other big expenses - health, social welfare and education.

If you are a politician with your head in the clouds, you will invent the notion - or naively believe - that NZ can grow itself out of this problem. So let’s do the numbers. To afford the growth in National Super payments and keep Government spending at current levels, we would require another $30b of GDP growth by 2030. And to achieve that, we would need to grow GDP by an extra 1% per annum by 2030.

That sounds easy, but it’s very, very hard. It hasn’t happened in our lifetimes. Our productivity growth in the last decade has been zero. The “grow ourselves out of the problem” argument is fiscal fiction. It won’t happen. Rogernomics was the last time we went through an economic transformation of that magnitude, and I’m guessing we have no appetite for change that drastic under MMP.

So what do we do? As a voting public, we need to make this issue number one in the election. And we need to insist on bi-partisanship. To me it feels like a Royal Commission may offer the gravitas and neutrality to come up with recommendations that would be hard to ignore, and easier to implement, for all political parties. But we should leave it to the leaders of our major political parties to agree on how they could run a process they would all be happy with, and could sell to the electorate.

The result needs to provide a comfortable retirement for all, in the way National Super used to. But in the absence of enough savings, the fear that it won’t happen is real. ‘Keep your hands off my super’ plays well to those who really need it, and fear it being taken away. So, to remove that fear, we have to give generations of Kiwis comfort that they will have a comfortable retirement from their own savings, with National Super as a safety net.

And that means any conversation about lowering the costs to taxpayers of providing National Super has to go hand in hand with increasing our savings via KiwiSaver. They are now inextricably linked.

To my mind, the only way you will get voters comfortable with reducing the scope of National Super - by either increasing the retirement age and/or means testing - is for Kiwis to have enough in their KiwiSaver account, and other investments, to fund the retirement they want.

So here are the sorts of messages Kiwis need to hear. The numbers are less relevant here, any Royal Commission and/or The Treasury can work those out, but Kiwis need to hear something like this from an agreement multi-party retirement policy;

For all those living in fear about having their Super taken away, let’s reject any do nothing, head-in-the-sand attitude, and fix this once and for all. The Aussies have, we can too, says Sam Stubbs.

Over 50 years old? - Don’t worry, you’ll get National Super for the rest of your life. And we will grow your KiwiSaver nest egg by as much as possible before your retire via compulsory KiwiSaver and slowly rising contributions.

Under 50? - we will be increasing the age of entitlement, or reducing National Super payments. We have to. But you will have at least another 15 years to save and adjust. By the time you retire, compulsory and rising KiwiSaver contribution rates means you will have a surprisingly large next egg, typically in the low hundreds of thousands.

Under 30? Lucky you. With compulsory KiwiSaver and rising contributions, you will have hundreds of thousands saved, giving you a bigger income than your grandparents currently have via NZ Super. And it will be your money, so you don’t have to worry what any Government will do.

Unable to earn? There will be plenty in the Government coffers to provide you a good base income for retirement. National Super will top up what you don’t have.

If you think this is fantasy, look at Australia. They already have six times our population, but 30 times our retirement savings. And that means the percentage of tax revenue funding their (means tested) National Super is now going down. So, unlike Nicola Willis, their Minister of Finance already has more to spend on hospitals, roads, schools and police. As a nation they have saved, so they can now spend.

This is all achievable. But we need to send our politicians the message that we want them to take KiwiSaver and retirement policies seriously, that we want a bi-partisan agreement, and that it needs to be honest about the challenges and clear about the way froward.

And speaking as someone who speaks to audiences on this topic frequently, the public get the issue. They are smarter than the politicians treat them, they get the realities, and are up for amending National Super, as long as there is a path to a better future. There now is, via KiwiSaver.

And for all those living in fear about having their Super taken away, it doesn’t have to be that way. For the sake of our children and grand-children, let’s reject any do nothing, head-in-the-sand attitude, and fix this once and for all. The Aussies have, we can too.