The experts insist a change is needed in spending priorities. Photo: Supplied
Top economists have called for action on the pension age at a University of Waikato economics forum.
ANZ chief economist Sharon Zollner, ASB chief economist Nick Tuffley and Infometrics principal economist Brad Olsen spoke as a panel on Thursday morning.
Panel host Steven Joyce asked whether New Zealand's current settings were right and whether the country was "in a box too much" with its thinking.
Zollner said a place to start "unconstrained thinking" was the age at which people become eligible for the pension and capital gains tax.
"If we are going to be different from almost the rest of the world, we should be able to have a mature conversation about what makes us different and why we think this is appropriate for us, when everyone else has chosen a different path, but we seem incapable of doing that," she said.
"Similarly, with the retirement age... we do seem to really struggle to have a conversation on that."
She said she was part of the age group affected by the previous National government's plans to raise the pension age to 67.
"My pension was going to be delayed by three months, but that was killed off by people older than me, who were not going to be affected.
"The slower you go, the bigger the mess when it comes to super. We really need to do something about this."
Olsen agreed change was needed.
Panel host and former Finance Minister Steven Joyce. Photo: RNZ / Rebekah Parsons-King
"At the moment, New Zealand spends more on NZ Super than on education. Where are our priorities?
"It sure as hell isn't spending on getting people smart, so they can do better jobs in life. We're paying people to be old at the moment, that's where the main focus is.
"Look at the government's accounts - that's how the fiscals work - the biggest expenditure category is NZ Super. That's the choice we are making every single day, the politicians are making and the public is making."
He said people "talked a big game" about NZ Super, but no-one cared enough to do anything about it.
Olsen said a better option would be to pay children the same amount as NZ Super from when they were born until when they were 18 and have them invest that money, but that would not be a politically palatable idea, nor easy to implement,
Tuffley said the country needed people to be well educated, with skills and the willingness to take some risks.
"We've got an extremely big welfare sector and we've chucked on top Working for Families... grafted that on top of tax system."
He said there should be a multi-party approach to redesigning the system, with a focus on getting assistance to the people who needed it most.
"At the moment, there are mixed signals."
He said someone earning $125,000 a year with six children would still get a lot from Working for Families.
"If you just snuck in above $80,000, you've got six kids, you're getting paid nearly $700 a week at that income level where you're earning quite a lot. We've created a very complicated welfare and tax system.
"Rather than tinkering around with a capital gains tax, or tax on fresh fruit and vegetables, we need to take a more holistic look at the interaction of the welfare and tax system."
