September 24, 2025 • 13 mins
A former Finance Minister's discussing the Superannuation age in the wake of an alarming Treasury report.
Treasury's long term fiscal statement notes the importance of responding to challenges with an ageing population.
It suggests the cost of NZ Super could be kept stable by steadily increasing the age of eligibility, requiring it to rise to 72, by 2065.
Steven Joyce told Kerre Woodham Superannuation policy gets more urgent every time it's left alone.
He believes the age should be getting gradually older as we live longer, and says he had a plan to lift it with 20 years notice before doing so.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the Carrywood and Morning's podcast from News Talks.
Speaker 2 (00:10):
He'd be as we've been discussing. Treasury's long term fiscal
statement contains numerous alarms and highlights the challenge of responding
to an aging population. In nineteen sixty five, there were
seven working age New Zealanders for every person over sixty five.
Today that ratio is four to one, and forty years
it will be just two to one. There is no
(00:32):
one solution, however, raising the age of super eligibility, broadening
the tax base index, linking super payments to inflation rather
than wages means testing actually getting wealthier, growing our productivity,
or all options. Former Minister of Finance Steven Joyce joins
me now also chair of our company, and said me,
(00:54):
but I would like to highlight given our discussion yesterday,
you haven't told us what topics to discuss, and you
haven't told me what to say or what questions to ask.
Have you, Stephen, good morning?
Speaker 3 (01:03):
No, but I'll just seend them through. Now.
Speaker 2 (01:05):
How are you but late? Really we're well underway. Why
did your government not take action? This has been known
for decades.
Speaker 3 (01:17):
Well, I think the short answer is we did probably
a couple of areas we weren't able to. But it's
quite interesting because Treasury has been very careful in their
long term statement to be politically neutral, as you to expect,
but they have sort of fingered that some of the
(01:37):
problem has been made worse by some of the fiscal
decisions in recent times, and those really relate to the
amount of money that was spent on the COVID response
and some of the other decisions around that time. And
I've been careful not to say that, but that's just
(01:57):
one element. But if you take it for example, when
we left office in seventeen, fiscal balance was good, was low.
We actually had a plan to reduce the cost of
super which was actually well supported at the twenty seventeen election,
just not by one particular gentleman and probably of the
(02:21):
And you know, we had I think a pretty good
immigration policy, which is part of the story of this
because demographics domestically are changing, so you do need some
immigration to bring in more working age people. And the
one that probably was eluding us a bit was in
the health space, and health is a big challenge. But
(02:42):
if you look at what Treasury is saying, there are
four things that are the key issues super health, demographics
and the overall attitude to spending and taxing beyond health?
And are those of the four leavers really you can
pull if you want to simplify it a bit. My
(03:03):
personal view is a superage should be getting gradually older
because we're all living longer. And as I say, we
had a plan at the time, which was to lift
it in twenty years time, progressively two years older. So
people who were in their forties had heaps of time
to realize that they're going to be sixty seven when
they retire rather than sixty five and plan accordingly. And
(03:25):
I think you've got to give some Whether you can
afford to give that much notice now, I don't know,
but at the time that was that was how you
do that was one answered how you could do that.
The other is the indexing to inflation, and as it's
been spoken about, and the third one is you know,
when people are working full time, maybe they don't get
it straight away.
Speaker 2 (03:45):
Well, I do remember Bill English, you know, promoting that
the major policy shift to raids raise the age from
sixty five to sixty seven by twenty forty. Yeah, and
I don't recall the urgency no, no it didn't. But
I don't recall there being that sense of urgency that
we're that we needed to hear perhaps or perhaps we
(04:08):
just didn't want to hear it.
Speaker 3 (04:10):
I possibly just didn't want to hear it. I mean,
which gen years on nearly now? Yeah, we're eight years
on and it gets a bit more urgent each time
you leave it. But I don't know genuinely. I'm in
a cynical politically, and I don't think that's going to
change as long as Winston Peters is anywhere any government,
because it's his whole life is that, even though the
people that vote for him have already retired.
Speaker 2 (04:30):
But anyway, the first people to bring in and complain
are the ones who are getting it. It's not going
to change, They're not going to not going to lose anything.
Speaker 3 (04:40):
And then you get to the health sector, and that
is tricky, but I think we've made it worse in
the interim because having one now large monopoly health system
that we've created as against the admittedly government owned but
sort of ten or twelve has had one really big
change and that is this as you're seeing it play
(05:02):
out now, is the huge debates between the unions and
the government to who should be paid what. And that's
part of the monopoly national plan, which is it's everybody
has to get a pay increase at all times. And
while you know, I'd argue that that you know, there's
great nurses and doctors that should be being paid more.
(05:25):
Our sort of monopoly provision system not just in pay,
but also in how you will do things and how
you will operate the system does not breed the sort
of innovation and different ways of doing things that you
need in the health system if you're going to meet
these costs. And what I mean by that is things
like telehealth, for example, is one innovation, but god, it's
(05:47):
taken us what twelve years to get here and has
to be done centrally with big government bureaucracies making a
decision about whether this was going to be supported or not.
You can't have the what is the country's in effect
biggest industry being controlled by a bunch of uroucrats whatever
they called, whether it's TAFATA or or Health New Zealand
(06:09):
or Ministry of Health and Wellington. There's just that inflexibility
I think is going to count against us unless we
actually allow more private provision God save us in the system.
So yes, that's two. The third one is demographics, and
you know, the populace will tell you that all immigration
is bad. That's their starting position, and of course that's
(06:30):
the ascendency in the world at the moment. But the
irony of courses that the countries that are getting most
wound up about it are the ones that are most
going to have their populations collapse unless they allow more
people of working age into the country, and we need
to face that squarely. Sure, there's questions around how people
assimilate into the culture of the country that they're moving to,
but let's be blunt, given that we're not replacing our
(06:53):
population ourselves, and we're not as badly off as some
countries in this regard, but you know it's heading the
same way. Then, Actually, we are going to have to
encourage bright young things to come and live here, and
we need to think of about how we do that.
So that's the third one, and then your fourth one
is just the whole sort of fiscal balance, and governments
(07:16):
tend to be less honest about that because, particularly if
they want to spend more and they don't want to
tax more, they prefer to say that a law be
all right in the end, and of course it's not
all right in the end unless you actually have some
real fiscal discipline. And we can see the political divide
on that again. At the moment. You know, the current
(07:37):
government is trying to wind back some things, frankly, according
to some people, not enough. But then you know, even
those are creating massive screams from the other side, who
will no doubt and want to increase expenditure again. And
then of course if you say, well, okay, that's fair enough,
it will tax more. You can tax more if you like.
But of course that makes it harder to attract the
people that you want to have lived here to help
(08:00):
the place grow, because then they look at it your
tax policies and go, well, it's not for me. And
so so it's reasonably straightforward, and we come around every
four years and there's much weeping and whaling and gnashing
of teeth. But that's the that's the that's those are
the those are your choices you've got. And you see
France went through of course, you know they said, oh no,
(08:21):
we're going to know, we want to spend more as
a government. Therefore we will you know, they've had a
high tax, high spend approach for a long time. Then
they tried to cut it back, and now, of course
Macron is nearly more or less a dead duck. And
and meanwhile, the French government bonds are worse than the
(08:43):
Greek ones a few years ago because they have not
faced the fact that they that they either have to
reduce spending or increase tax. They can't increase tax anymore
because too many people are moving out of the country
anyway because of higher taxes, and that's where it leads.
So that's a that's the sort of choices you.
Speaker 2 (08:59):
Get a global youth diasper as they treek around the
globe trying to find a country where they're not supporting
the oldies. And I'm not talking about the oldies right now.
You are all quite safe, So just call your jets,
you know, stop with the texting. It's only really people
who are forty five to sixty that need to worry.
And even then, I mean, why on earth would a
(09:21):
bright young thing come here to be highly taxed and
support an older person in their healthcare and their aged care.
Speaker 3 (09:29):
Well, it's a question all over the world, and actually
it's a question that the current generation of the under
forties aren't particularly happy about as you will see, and
so they are kicking up and fair enough, and you
know they're not prepared to it. And the other interesting
thing is in this world, you know, of basically technology,
(09:50):
you can work from anywhere, so labor is completely portable.
The only industries which are tied to actually physically being
in a country the food industry and the resources industry
and the tourism industry. And you know you have to
be here or somewhere else to participate in those industries
(10:11):
in those countries, and the number of people being employed
in those areas will continue to decline as a percentage
of the population. So you're going to find more and
more of your people are portable. And you know, if
you're a bright software person who can work with AI,
you know you can work anywhere in the world and
you just take the best offer.
Speaker 2 (10:29):
Yeah, and are we going to be it unless we
make changes?
Speaker 3 (10:34):
Well, not necessarily, because we are quite isolated. And that's
both an attraction and a repulsion for a lot of
young people because they think, oh gosh, it's you. You
imagine if you're sitting in California and somebody says I've
got an idea, let's all move to New Zealand. You
look down the other end of the microscope and it's
it's pretty small. So we're always there's always going to
(10:55):
be a smaller number of people that are willing to
live in this part of the world compared to elsewhere,
which is sort of good. We don't need that many,
but we are going to have to be attractive to
them to want to bring up their families here, and
that you know, as much of it's the lifestyle, it's
also the income they can get and what ad buys.
(11:15):
That's that's what that's important.
Speaker 2 (11:17):
And just finally, how much of this is on voters
to take responsibility rather than political parties.
Speaker 3 (11:25):
Well, sort of all is in the end, because actually
you only get the political parties that you that you
know that you vote for. And that might sound tripe,
but that's the reality politicians. Fundamentally, as one who's been
there for a period of time, your job is as
much as possible to reflect the aspirations of the people
that vote for you, and you can try and stretch
(11:47):
it at the margins and and take on more challenging things.
And as the saying goes spend political capital on some
of those things, but there's a limit to that. Fundamentally,
the population needs to say, well, we want to address
those things and electively in a majority sense. So you
(12:08):
take the super one in twenty seventeen, we got forty
one percent. I think I act got about I'm trying
to remember about five or six percent, so forty seven
tantalizingly close to a majority, but not. And so it
didn't happen. Everybody else opposed it, so yeah, and that's
(12:30):
that was There was no great political heat in it,
and that people weren't sort of marching around saying this
is you know, this has to not happen. It was.
It was just amongst the sort of set of choices.
And you can either choose a political party that has
a more short term is sort of she'll be right
(12:51):
sort of you yep, or you take one that's got
a that's got a longer view. And sadly, I think
the history of politics and most people more people take
the people with the short of view and the longerview.
Speaker 2 (13:02):
We need to change that. I thank you very much
for your time. Steven Joyce, Forman National Party Minister of Finance,
Directorate joice Advisory ultimately my biggest boss.
Speaker 1 (13:13):
For more from Kerry Wooden Mornings, listen live to News
Talks A B from nine am weekdays, or follow the
podcast on iHeartRadio
You're listening to the Carrywood and Morning's podcast from News Talks.
Speaker 2 (00:10):
He'd be as we've been discussing. Treasury's long term fiscal
statement contains numerous alarms and highlights the challenge of responding
to an aging population. In nineteen sixty five, there were
seven working age New Zealanders for every person over sixty five.
Today that ratio is four to one, and forty years
it will be just two to one. There is no
(00:32):
one solution, however, raising the age of super eligibility, broadening
the tax base index, linking super payments to inflation rather
than wages means testing actually getting wealthier, growing our productivity,
or all options. Former Minister of Finance Steven Joyce joins
me now also chair of our company, and said me,
(00:54):
but I would like to highlight given our discussion yesterday,
you haven't told us what topics to discuss, and you
haven't told me what to say or what questions to ask.
Have you, Stephen, good morning?
Speaker 3 (01:03):
No, but I'll just seend them through. Now.
Speaker 2 (01:05):
How are you but late? Really we're well underway. Why
did your government not take action? This has been known
for decades.
Speaker 3 (01:17):
Well, I think the short answer is we did probably
a couple of areas we weren't able to. But it's
quite interesting because Treasury has been very careful in their
long term statement to be politically neutral, as you to expect,
but they have sort of fingered that some of the
(01:37):
problem has been made worse by some of the fiscal
decisions in recent times, and those really relate to the
amount of money that was spent on the COVID response
and some of the other decisions around that time. And
I've been careful not to say that, but that's just
(01:57):
one element. But if you take it for example, when
we left office in seventeen, fiscal balance was good, was low.
We actually had a plan to reduce the cost of
super which was actually well supported at the twenty seventeen election,
just not by one particular gentleman and probably of the
(02:21):
And you know, we had I think a pretty good
immigration policy, which is part of the story of this
because demographics domestically are changing, so you do need some
immigration to bring in more working age people. And the
one that probably was eluding us a bit was in
the health space, and health is a big challenge. But
(02:42):
if you look at what Treasury is saying, there are
four things that are the key issues super health, demographics
and the overall attitude to spending and taxing beyond health?
And are those of the four leavers really you can
pull if you want to simplify it a bit. My
(03:03):
personal view is a superage should be getting gradually older
because we're all living longer. And as I say, we
had a plan at the time, which was to lift
it in twenty years time, progressively two years older. So
people who were in their forties had heaps of time
to realize that they're going to be sixty seven when
they retire rather than sixty five and plan accordingly. And
(03:25):
I think you've got to give some Whether you can
afford to give that much notice now, I don't know,
but at the time that was that was how you
do that was one answered how you could do that.
The other is the indexing to inflation, and as it's
been spoken about, and the third one is you know,
when people are working full time, maybe they don't get
it straight away.
Speaker 2 (03:45):
Well, I do remember Bill English, you know, promoting that
the major policy shift to raids raise the age from
sixty five to sixty seven by twenty forty. Yeah, and
I don't recall the urgency no, no it didn't. But
I don't recall there being that sense of urgency that
we're that we needed to hear perhaps or perhaps we
(04:08):
just didn't want to hear it.
Speaker 3 (04:10):
I possibly just didn't want to hear it. I mean,
which gen years on nearly now? Yeah, we're eight years
on and it gets a bit more urgent each time
you leave it. But I don't know genuinely. I'm in
a cynical politically, and I don't think that's going to
change as long as Winston Peters is anywhere any government,
because it's his whole life is that, even though the
people that vote for him have already retired.
Speaker 2 (04:30):
But anyway, the first people to bring in and complain
are the ones who are getting it. It's not going
to change, They're not going to not going to lose anything.
Speaker 3 (04:40):
And then you get to the health sector, and that
is tricky, but I think we've made it worse in
the interim because having one now large monopoly health system
that we've created as against the admittedly government owned but
sort of ten or twelve has had one really big
change and that is this as you're seeing it play
(05:02):
out now, is the huge debates between the unions and
the government to who should be paid what. And that's
part of the monopoly national plan, which is it's everybody
has to get a pay increase at all times. And
while you know, I'd argue that that you know, there's
great nurses and doctors that should be being paid more.
(05:25):
Our sort of monopoly provision system not just in pay,
but also in how you will do things and how
you will operate the system does not breed the sort
of innovation and different ways of doing things that you
need in the health system if you're going to meet
these costs. And what I mean by that is things
like telehealth, for example, is one innovation, but god, it's
(05:47):
taken us what twelve years to get here and has
to be done centrally with big government bureaucracies making a
decision about whether this was going to be supported or not.
You can't have the what is the country's in effect
biggest industry being controlled by a bunch of uroucrats whatever
they called, whether it's TAFATA or or Health New Zealand
(06:09):
or Ministry of Health and Wellington. There's just that inflexibility
I think is going to count against us unless we
actually allow more private provision God save us in the system.
So yes, that's two. The third one is demographics, and
you know, the populace will tell you that all immigration
is bad. That's their starting position, and of course that's
(06:30):
the ascendency in the world at the moment. But the
irony of courses that the countries that are getting most
wound up about it are the ones that are most
going to have their populations collapse unless they allow more
people of working age into the country, and we need
to face that squarely. Sure, there's questions around how people
assimilate into the culture of the country that they're moving to,
but let's be blunt, given that we're not replacing our
(06:53):
population ourselves, and we're not as badly off as some
countries in this regard, but you know it's heading the
same way. Then, Actually, we are going to have to
encourage bright young things to come and live here, and
we need to think of about how we do that.
So that's the third one, and then your fourth one
is just the whole sort of fiscal balance, and governments
(07:16):
tend to be less honest about that because, particularly if
they want to spend more and they don't want to
tax more, they prefer to say that a law be
all right in the end, and of course it's not
all right in the end unless you actually have some
real fiscal discipline. And we can see the political divide
on that again. At the moment. You know, the current
(07:37):
government is trying to wind back some things, frankly, according
to some people, not enough. But then you know, even
those are creating massive screams from the other side, who
will no doubt and want to increase expenditure again. And
then of course if you say, well, okay, that's fair enough,
it will tax more. You can tax more if you like.
But of course that makes it harder to attract the
people that you want to have lived here to help
(08:00):
the place grow, because then they look at it your
tax policies and go, well, it's not for me. And
so so it's reasonably straightforward, and we come around every
four years and there's much weeping and whaling and gnashing
of teeth. But that's the that's the that's those are
the those are your choices you've got. And you see
France went through of course, you know they said, oh no,
(08:21):
we're going to know, we want to spend more as
a government. Therefore we will you know, they've had a
high tax, high spend approach for a long time. Then
they tried to cut it back, and now, of course
Macron is nearly more or less a dead duck. And
and meanwhile, the French government bonds are worse than the
(08:43):
Greek ones a few years ago because they have not
faced the fact that they that they either have to
reduce spending or increase tax. They can't increase tax anymore
because too many people are moving out of the country
anyway because of higher taxes, and that's where it leads.
So that's a that's the sort of choices you.
Speaker 2 (08:59):
Get a global youth diasper as they treek around the
globe trying to find a country where they're not supporting
the oldies. And I'm not talking about the oldies right now.
You are all quite safe, So just call your jets,
you know, stop with the texting. It's only really people
who are forty five to sixty that need to worry.
And even then, I mean, why on earth would a
(09:21):
bright young thing come here to be highly taxed and
support an older person in their healthcare and their aged care.
Speaker 3 (09:29):
Well, it's a question all over the world, and actually
it's a question that the current generation of the under
forties aren't particularly happy about as you will see, and
so they are kicking up and fair enough, and you
know they're not prepared to it. And the other interesting
thing is in this world, you know, of basically technology,
(09:50):
you can work from anywhere, so labor is completely portable.
The only industries which are tied to actually physically being
in a country the food industry and the resources industry
and the tourism industry. And you know you have to
be here or somewhere else to participate in those industries
(10:11):
in those countries, and the number of people being employed
in those areas will continue to decline as a percentage
of the population. So you're going to find more and
more of your people are portable. And you know, if
you're a bright software person who can work with AI,
you know you can work anywhere in the world and
you just take the best offer.
Speaker 2 (10:29):
Yeah, and are we going to be it unless we
make changes?
Speaker 3 (10:34):
Well, not necessarily, because we are quite isolated. And that's
both an attraction and a repulsion for a lot of
young people because they think, oh gosh, it's you. You
imagine if you're sitting in California and somebody says I've
got an idea, let's all move to New Zealand. You
look down the other end of the microscope and it's
it's pretty small. So we're always there's always going to
(10:55):
be a smaller number of people that are willing to
live in this part of the world compared to elsewhere,
which is sort of good. We don't need that many,
but we are going to have to be attractive to
them to want to bring up their families here, and
that you know, as much of it's the lifestyle, it's
also the income they can get and what ad buys.
(11:15):
That's that's what that's important.
Speaker 2 (11:17):
And just finally, how much of this is on voters
to take responsibility rather than political parties.
Speaker 3 (11:25):
Well, sort of all is in the end, because actually
you only get the political parties that you that you
know that you vote for. And that might sound tripe,
but that's the reality politicians. Fundamentally, as one who's been
there for a period of time, your job is as
much as possible to reflect the aspirations of the people
that vote for you, and you can try and stretch
(11:47):
it at the margins and and take on more challenging things.
And as the saying goes spend political capital on some
of those things, but there's a limit to that. Fundamentally,
the population needs to say, well, we want to address
those things and electively in a majority sense. So you
(12:08):
take the super one in twenty seventeen, we got forty
one percent. I think I act got about I'm trying
to remember about five or six percent, so forty seven
tantalizingly close to a majority, but not. And so it
didn't happen. Everybody else opposed it, so yeah, and that's
(12:30):
that was There was no great political heat in it,
and that people weren't sort of marching around saying this
is you know, this has to not happen. It was.
It was just amongst the sort of set of choices.
And you can either choose a political party that has
a more short term is sort of she'll be right
(12:51):
sort of you yep, or you take one that's got
a that's got a longer view. And sadly, I think
the history of politics and most people more people take
the people with the short of view and the longerview.
Speaker 2 (13:02):
We need to change that. I thank you very much
for your time. Steven Joyce, Forman National Party Minister of Finance,
Directorate joice Advisory ultimately my biggest boss.
Speaker 1 (13:13):
For more from Kerry Wooden Mornings, listen live to News
Talks A B from nine am weekdays, or follow the
podcast on iHeartRadio
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