The silver tsunami: decades of treading water

Sunday, 15 February 2026

Tracy Watkins is editor of The Post and Sunday Star-Times.

OPINION: I was in Hamilton last week for the University of Waikato’s NZ Economic Forum - now a mandatory fixture on the political calendar. One panel discussion, in particular, caught my eye: “Superannuation and the silver tsunami - can our system keep up?”

It felt like Groundhog Day.

I dug up an old article I’d written on the same topic. The headline? “The Silver Tsunami.” In it, I had grilled a range of economists and politicians on the sustainability of our superannuation system. Their near-universal conclusion was that it wasn't sustainable.

That article was dated July 2010. A staggering 15 years ago. It is sobering to realise we are still debating the exact same crisis with the exact same metaphors.

The only real difference is the maths. Fifteen years ago, the central debate was whether to nudge the entitlement age from 65 to 67. At last week’s forum, the tone was far blunter. Raising the age by a mere two years is no longer viewed as a panacea; it’s barely a band-aid.

Milford CEO Blair Turnbull voiced the collective frustration: “We can't afford either [65 or 67]. In fact, Treasury is very clear: unless it goes to something like 72 or 73, we can't afford it.”

Would we still be in a bind if we had followed the expert advice back in 2010? Probably. The demographic reality of an ageing population and a shrinking tax base is a maths problem that doesn't go away. But we would have provided a 'softer landing' for those now staring down the barrel of retirement. We would have given New Zealanders the one thing the government owes them: time to plan and time to shift expectations.

Instead, we’ve spent 15 years in a state of political paralysis. While the panel—from National’s former finance minister Steven Joyce and former Labour minister David Parker to ANZ’s Sharon Zollner—reached a consensus on our current fiscal dilemma, the ghost of 2010 remains. We are still talking, while the clock keeps ticking.

Parker and Joyce even pointed out that they had both, at various times in government or opposition, campaigned on raising the age of entitlement. That’s a remarkable level of political consensus—so why are we still mired in the same debate?

Politics. The consensus always crumbles in the heat of a campaign.

Take 1997, when a compulsory savings scheme was put to the country by referendum. The architect was NZ First leader Winston Peters. It required employees to put a portion of their income into a personal account, rising to 8% by 2002, offset by tax cuts. For low-income earners, the government would provide a 'top-up' to ensure everyone reached a minimum target.

I expect many retirees would be better off today if that had passed. Yet it was overwhelmingly rejected by 92% of voters. While Peters had the backing of then-PM Jim Bolger, other National ministers - led by his successor Jenny Shipley - actively campaigned against it.

It was a massive missed opportunity, much like the Kirk Labour Government’s compulsory scheme in the 1970s. National convinced voters then that it was a communist takeover, using the infamous “dancing Cossacks” TV ads. Another own goal by voters.

Had we stuck with it, we would likely be in the same fortunate position as Australia. Their compulsory 'super' is now acknowledged as one of the best systems in the world, bolstering both national wealth and individual nest eggs.

Instead, New Zealand’s pension history is a tangle of poor decision-making, bad faith, and broken promises. Means-testing and asset-testing soured public opinion and undermined trust. We are now paying the price.

But consensus is finally building on some fronts. Labour, National, and NZ First are all discussing lifting KiwiSaver rates, and 'compulsion' is no longer a dirty word. That discussion, along with the tax treatment of savings, currently disincentivising savings over other forms of investment, should be front and centre of the upcoming election campaign.

Let’s hope this election will be the one that finally breaks the 15-year loop.

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