The Treasury has issued a "choose your poison" challenge to the Government, warning that if serious consideration is not given to pegging the costs of superannuation other public services will suffer.
It yesterday released its Long Term Fiscal Statement, a series of projections of government spending and revenue over 40 years.
The statement fingered superannuation as the area of spending expected to grow the most over the next 40 years, because of the ageing population.
It warned that steps had to be taken soon to rein it in or future generations would be footing the bill while the public services that benefited them were disadvantaged.
It presented several options for cost savings - including raising the age of eligibility as life expectancy increased, income testing, and adjusting it by inflation rather than the average wage.
Treasury Secretary John Whitehead said the statement was aimed at beginning a debate about priorities for the future and how to pay for them - a process he said would only get harder over time.
However, his calls for further debate on the issue were largely stonewalled by those who would have to lead it. Both Finance Minister Bill English and Labour finance spokesman David Cunliffe refused to enter it, saying their parties were committed to the current age and level of superannuation.
Requiring future taxpayers to cover the costs of superannuation while facing cuts to public services amounted to "intergenerational unfairness," Mr Whitehead said.
Prime Minister John Key said before the election that he would resign if those entitlements were changed, and yesterday Mr English refused to go even so far as to say the Government would consider the pros and cons.
He said the debate was one for "future governments" to consider. The Government was aiming to increase growth and become more efficient elsewhere, he said.
"The report makes the good point that you're better to make decisions earlier that have a smaller effect over a long period of time ... but despite Treasury's forecast we made a number of political undertakings around national super and maintaining benefits and we're going to stick to those."
Mr Cunliffe said the Government's decision to halt payments to the Super Fund had not helped - Treasury estimates the impact of the holiday in contributions mean the fund will now cover only 8 per cent of the cost of super in 2050, instead of 11 per cent.
The Treasury paper also presented politically unattractive proposals for other services - including health, prisons and education. It suggests reducing entitlements under Working for Families and cutting numbers of sickness and invalids' benefits.
Projected growth of 5 per cent a year in health spending was unsustainable, it said.
It said there was also a range of options for savings in education - including shifting more of the costs on to students and families and targeting subsidies at low income areas.
The Treasury paper also suggests releasing non-violent or low-level offenders earlier, noting the $90,000 cost of keeping a person in prison for a year, compared to $18,000 for someone on home detention.
* Superannuation cost $7.7 billion in 2009. It is projected to grow from about 4 per cent of GDP to 8 per cent in 2050.
* The number of people aged over 65 is projected to increase from 553,000 to 1.35 million. Average life expectancy is forecast to be 85 - up from 80 now.
* By 2050, the ratio of people aged over 65 to the working age population is expected to double.
* Raise the age of eligibility as life expectancy increases.
* Index payments to inflation instead of the average wage.
* No or half superannuation for wealthiest quarter of superannuitants.