When Bill English delivers his next Budget a month from now, he will no doubt portray the Government as a model of providence and fiscal responsibility.
And indeed, by international standards New Zealand's headline fiscal numbers don't look too bad - a balanced budget and relatively low levels of government debt.
The Government's overarching fiscal goal is to bend the curve of public debt to below 20 per cent of gross domestic product in 2020, from 27 per cent now, and to keep hauling it down until it declines, not only relative to the size of the economy, but also in absolute dollar terms. At that point - in maybe six years' time - it might see its way to resuming contributions to the New Zealand Superannuation Fund.
The problem with this picture of careful stewardship of the Crown's finances lies off balance sheet.
It is the Crown's obligations to future superannuitants, whose ranks are growing apace as the baby boomers move into retirement.
The International Monetary Fund's latest Fiscal Monitor, released this month, estimates the increase in NZ Superannuation costs by 2030 will be 2.5 per cent of GDP.
To calibrate the scale, that is on top of the 5 per cent of GDP that super costs now (4.2 per cent after tax) out of government spending of around 30 per cent of GDP.
Put another way, it will soak up another nine days a year of the economy's output.
New Zealand's projected increase of 2.5 per cent of GDP contrasts with an average of 1 per cent for the 20 largest advanced economies.
It is not as if that is the only fiscal pressure ahead. Health care spending, the IMF estimates, will increase by 2.3 per cent of GDP, a bit lower than the 2.6 per cent projected for the G20.
Looking further out, to the middle of the century, New Zealand's pension cost numbers are even more challenging.
The IMF puts the net present value (NPV) of the increase in superannuation costs by 2050 at the equivalent of 69 per cent of GDP.
In today's dollars that would be $170 billion. It dwarfs the $30 billion built up in the NZ Superannuation Fund, set up by Sir Michael Cullen to partially pre-fund super. The present Government suspended contributions to it in 2010.
The Government insists [superannuation] is perfectly affordable. And so it is, provided you are indifferent to the mounting cost.
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Relative to the size of the economy, the NPV of superannuation cost increases by mid-century is three times the average increase the IMF projects for advanced economies.
That reflects the fact that, when it comes to retirement income, New Zealand relies especially heavily on tier one (taxpayer-funded) pensions. New Zealand Superannuation is more generous than most such schemes.
The age of eligibility is 65, it is universal and not means-tested (though it is taxable) and it is indexed to the average wage, not CPI inflation.
The Government insists this is perfectly affordable.
And so it is, provided you are indifferent to the mounting cost, whether that takes the form of higher taxation or cuts to other things the Government spends money on.
The Treasury has done some thinking about what the options are for a fiscally sustainable approach to retirement income - just in case the Government ever moves on from John Key's reckless commitment that the entitlement parameters for NZ Super will never change on his watch.
All the options involve trade-offs and create different winners and losers. The equity issues within and between generations are challenging.
And the unyielding laws of arithmetic mean that the later you start an adjustment (and you have to give people notice) and the more gradually you phase it in, the less the fiscal relief will be. Of the more realistic possibilities, the biggest savings come from changing the indexation provisions.
Splitting the difference between indexation to the average wage (the status quo) and indexation to the consumers price index (which preserves the real but not the relative value of the pension) would stabilise the cost of NZ Super at around 6 per cent of GDP from 2030.
Raising the age of eligibility to 67, phased in at two months a year from 2021, would save a bit less than that.
Those savings are likely to be partially offset, however, by increases in other forms of income support, if rates of elder poverty are not to increase, including the accommodation supplement as home ownership rates decline.
Another approach would be to move superannuation from the current and time-honoured pay-as-you-go (Paygo) system, where money is transferred from current taxpayers to current superannuitants, towards a save-as-you-go (Saygo) system funded by savings made during the superannuitant's working years.
That could either be on an individual basis (like a compulsory version of KiwiSaver but with higher contribution rates) or a communal basis (like the New Zealand Superannuation Fund was intended to be).
There are a lot of moving parts here, a lot of policy settings that could be adjusted. But all versions of a transition to Saygo face the problem of the "sandwich generation" who have to continue to fund their parents' super on a Paygo basis while saving more than their parents did in order to lessen the burden on their children.
So none of this is easy. You can understand why politicians prefer to avert their gaze and pretend there is no problem.
But nothing they do, or fail to do, changes the demographics or the laws of mathematics. Denial and delay only add to the cost.
Debate on this issue is now closed.