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Let’s be clear: we’ve got money problems and unless we do something about them now, our kids and grandkids, are likely to pay a hefty price down the track. This is not something you’ll hear the politicians yelling about in Question Time. It’s long-term, and complicated; the kind of issue that gets buried under a pile of press releases, whiteboards, diagrams, reports and spreadsheets. But it matters, big time.
This week I buried myself in Treasury’s latest 40-year outlook document He Tirohanga Mokopuna: Long-term Fiscal Statement 2025. The te reo translates to “a grandchild’s perspective” but a more direct title could be something like, ‘Your future – ignore at your peril.’
New Zealand is spending more than it earns, and it’s only going to get worse. We are living beyond our means and those in power with the ability to do something about it are selfishly only worried about their immediate political survival. Telling you nothing needs to happen right now is disingenuous at best and a downright lie at its worst.
The Treasury says government policies are not sustainable for the long term. Without change, by 2065 government spending per person will be double what it is today. Health spending will double, interest costs will be six times higher, defence spending will quadruple and spending on education and welfare will also grow. A much smaller share of public resources will be available for younger generations.
Let’s say we make no changes to current welfare and superannuation payments and carry on as we are. By 2065, the retirement age will have to be 72, not 65, and GST will need to be 32%, not 15%, to afford the cost.
We are hurtling towards a future where the country will be permanently broke, and we’ll be permanently borrowing just to keep the lights on in hospitals and the superannuation payments flowing.
The core problem? An ageing population, a shrinking tax base, and politicians who don’t want to deal with reality.
John Key suspended Crown contributions to the Super Fund and said he’d resign if the eligibility age was raised under National of the level of payments declined. Bill English then lifted the age of eligibility to 67, to take effect in 2030. It was the bravest and most honest anyone has been on NZ Super.
Then Labour overturned that, returning it to 65. Winston Peters has carved out a career saying NZ Super is affordable, leave it alone. Labour is saying the same thing. They’re all in political la la land.
Carry on as we are and debt will be four times what it is now – and this is the government’s own modelling.
So why the sudden urgency? Because we have done nothing. Every four years this report comes out and we go, “Meh, later.”
Boomers are retiring, good on them — they worked hard, they’ll tell you that - but the rest of us? We’re going to be paying through the nose for pensions, healthcare and aged care. The Treasury reckons healthcare alone will be eating up a quarter of the government’s budget by 2060.
Meanwhile, we’ve got a smaller proportion of workers paying for it all.
And although the numbers are scary, the real scandal is no one in Wellington has a plan. The Treasury’s doing its job by waving the red flag. But the politicians? Dishonest, disingenuous and in denial – the lot of them. They’re too busy fighting over potholes and polls and they’re too frightened to say something, let alone stand for something, in case they become unpopular – or more unpopular than they are now.
MMP doesn’t help. It dumbs us down and encourages us to go slow and tinker at best. We’ve now had years of crisis-response government. Covid. Cyclones. The cost of living. And every time, the answer is the same: spend more now, figure it out later.
That’s fine in a crisis but what if the crisis never ends?
Luxon, Willis, Hipkins, Peters, Key, Clark, Cullen, Ardern, and Robertson ...
We need leadership. Someone has to stand up and say the hard stuff: maybe the pension age needs to rise. Maybe we can’t afford to keep the healthcare system as it is. Maybe we actually need to reform the tax system – not just tinker around with bracket creep and pretend it’s “structural”.
All of our leading politicians have let Rome burn. In former Labour finance minister Michael Cullen’s defence, at least he made us, and the government, save.
But the others — too risky. It might upset someone on social media or talk radio. Instead, we kick the can down the road again and again. Well, guess what? The road ends in a brick wall. And we are heading straight for it.
New Zealand used to be known for bold reform when it mattered. The 80s and 90s weren’t easy, but at least there was honesty about the mess we were in. Now? Governments manage decline. They are politically paralysed and economically lazy.
In the current Parliament, is there anyone willing to do what is truly needed? Maybe David Seymour, but when you are a minor party, the people have spoken and the big party, as in National or Labour, is now part of the problem, not the solution.
The Treasury has handed us the map. It’s not a good one, but it’s honest, what we need now is someone – anyone – with the guts to read it and say, “Right we’re changing course.” Because if we don’t, our kids and grandkids will be left cleaning up the debt, the dysfunction and the downright denial.
