National on KiwiSaver

Bill English has made an observation that few others have – NZ provisions for retirements savings are very high by world standards.

Our NZ superannuation scheme is thought to be the most generous in the world. It is not means tested or income tested, and not only is it inflation adjusted, it is linked to be 66% of the average wage (for a couple).

English notes half of all retirees in Australia get a state pension due to asset or income testing.

We also have the Cullen Fund, which pre-funds part of NZ Super. This is also a higher level of pre-funding than most other countries.

Finally we now have KiwiSaver, which requires a higher proportion of savings than Australia.

Bill correctly questions whether we need NZ Super, the Cullen Fund and Kiwi Saver. It is overkill having all three. My personal solution would be to pour the Cullen Fund into KiwiSaver and income and asset test NZ Super.

He also makes the point that there is more to a country than savings:

“Savings are good but they are not the only thing, and we can’t win the hearts and minds of 20-year-olds by telling them that the best thing about New Zealand is retiring into a plush rest home.”