NZ Economic Forum: Warnings of ‘silver tsunami’ coming for Govt spending
Friday, 13 February 2026
New Zealand is facing a demographic “silver tsunami” of retirees as the working age population shrinks, health costs rise and towns across the country see population decline.
The warning came at the New Zealand Economic Forum hosted by the University of Waikato, where Milford Asset Management CEO Blair Turnbull warned that the debate round raising the retirement age was “rhetorical”, because it wouldn’t raise anywhere near the money required.
The discussion about lifting the age from 65 to 67 was “quite frustrating … because I think it's slightly rhetorical, because we can't afford either. In fact, Treasury are very clear, unless it goes to like 72 or 73, we can't afford it,” Turnbull said.
He said that in 1970 there were seven workers to every retiree, but today “that's about four workers to every person over the age of 65 and by 2060 it'll be two workers to every person over the age of 65.”
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“And the truth is, as [much] as we don't like this, we just cannot afford the superannuation system because we don't have the workers,” Turnbull said.
Milford Asset Management has over $30 billion in funds under management, about a third of which are KiwiSaver Funds.
To add to New Zealand’s demographic-fiscal set of challenges, emeritus professor Paul Spoonley warned in a panel on demography that many local councils put their long term-plans together based on incorrect assumptions about growing, when they are shrinking
“A lot of them assume ongoing population growth, and two thirds of our 67 authorities are either in stagnation mode or in decline mode …”
“When we talk to regional politicians, what strikes me is that we have a spectrum, and there's quite a significant group that are demographically naive and who assume ongoing growth, when, in fact, we can show that they're not going to have ongoing growth,” Spoonley said.
“So they need to adjust their policies to anticipate this very different community that they're serving in the future.”
He noted that with so much of the growth in population happening in Auckland, in two decades about 75% of the country would live north of Taupō.
The panel on demography noted that almost every rich country has faced a falling birthrate and public policy seemed powerless to stop it.
Turnbull was joined on the superannuation panel by former Labour revenue minister David Parker and ANZ chief economist Sharon Zollner. Former finance minister Steven Joyce chaired the panel.
Retirement and savings settings and how to pay for it all loomed large over the day’s proceedings, being brought up in several panels while also a question for politicians.
Asked about retirement settings and a push for bipartisanship, Labour’s finance spokesperson Barbara Edmonds said it was an issue for more than just Labour and National.
“It's ultimately about the wider retirement system in itself and how people save for their retirement. The Retirement Commissioner has done some really good work on that. But ultimately, it's not just a Labour/National Party decision. It really needs to be a wider Parliament discussion,“ Edmonds said.
Asked if she would ever considering changing the indexation of superannuation ‒ currently set at wage inflation, rather than cost inflation as other benefits are ‒ she said Labour did not have a policy on that and it was not something she had considered.
The sixth forum was a room replete with policy-makers, government officials, economists, academics and the generally interested.
Earlier in the day, Finance Minister Nicola Willis had given a speech calibrating for the national ballot being held in November, in which she ruled out a big-spending election campaign.
“So to those who expect that in election year, we will have a big spending Budget, absolutely not.”
In an overtly political speech, she made the case for fiscal restraint while also reminding the audience of the fiscal legacy left by the previous Labour Government.
While not mentioning the Labour Party by name, Willis denounced higher spending and fiscal drift.
“In moments like this, it can be tempting to drift, or to reach for higher spending as an easy answer. But after the last Government more than doubled debt to 41.8% of GDP, New Zealanders know the cost of that band-aid approach ‒ it is simply not sustainable,” WIllis said.
Government spending has continued to increase under the current Government.
Willis also used her speech to spruik the Government’s Investment Boost policy announced at the last election. The numbers released by Willis, via Inland Revenue, suggest that its uptake is strong and that it is making investment more likely.
Willis came to the forum after yesterday announcing a new inquiry into Reserve Bank monetary policy during Covid-19, which was denounced by the opposition. But amongst those at the forum, there seemed to be mostly agreement
“I don’t think we should be afraid or scared of having a review of an unprecedented time,” Kiwibank chief economist Jarrod Kerr said.
“The only thing that comes close is wartime”.
While Kerr said that most economists recommended slashing interest rates and doing “a little” quantitative easing at the start of the pandemic, that “like the whole of Covid we ended up doing way too much”.
“Going through it, is, I think, a great idea,” he said.
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