Superannuation Costs Leave Expert Baffled

Natalia Albert attended an event called What should we do about the Super age? by IDEA, the Institute for Democratic and Economic Analysis. The panel consisted of Cameron Bagrie, Managing Director of Bagrie Economics; Susan St John, Honorary Associate Professor at the University of Auckland; and Bill Rosenberg, economist and former CTU Director of Policy.

The discussion centered around the rising cost of Superannuation (Super) in New Zealand. According to The Treasury's Long-term Fiscal Statement, published last September, Super costs 5.1 percent of GDP. However, Inland Revenue's long-term insights briefing in April stated that it costs about 4.4 percent of GDP.

The figures are different due to varying base years and whether they count Super before or after tax. Treasury's gross figure of 5.1 percent is closer to 4.3 percent once netting off the tax is considered, resulting in a gap of roughly $4 billion. The forecasts for the future also hide multiple choices, such as whether we're discussing Super alone or bundled with health and aged care.

The panelists presented different views on how to address the issue: Bagrie treated it as a political economy problem, St John saw it as distributional, and Rosenberg viewed it as a revenue question. The author noted that they were unable to follow the discussion due to its complexity and conflicting information.