Retirement Life
2 August 2023

Let’s get political


In recent years, there has been a noticeable drop in advocacy for seniors, with the political focus on low-income families and young people. Yet, there are a number of complex issues that government needs to resolve for older people and significantly more resources will be needed to pave the way for improved quality of life in retirement.


Let’s look at some of the key issues.


Affordability of NZ Super for our economy.

With a projected sharp rise in the number of retirees, the New Zealand Superannuation Fund was set up in 2001 by then Labour Minister of Finance, Michael Cullen, to partially pre-fund the future cost of NZ Super. The idea was to make contributions into this fund at budget time. However, the National Government suspended contributions in 2009 due to rising national debt. The Labour Government resumed contributions in 2017.


Some political parties have pledged to raise the age of eligibility for NZ Super over time to address the affordability problem. Raising the age distinctly disadvantages those people with a shorter life expectancy, especially Maori and Pacific Islanders and those with known health conditions. It also disadvantages those working in very physical occupations, such as tradespeople.


Fortunately, no political party has yet dared to suggest means testing NZ Super, undoubtedly aware that it would be political suicide. Another potential solution would be to make contributions to KiwiSaver compulsory and to set a minimum level of contribution. Again, voters are unlikely to accept this.


High inflation.

People on low incomes, such as retirees, are more affected by high inflation as they spend a greater proportion of their income. It is challenging to keep ahead of inflation over the long term when investing retirement funds as it generally requires taking on financial risk. Excessive government spending and high levels of government debt can be significant contributors to inflation, as we have seen in recent years.


Project your retirement income.

The cost and availability of suitable housing.

Home ownership is one of the biggest determinants of standard of living and quality of life for retirees. There is a growing number of people reaching retirement who either do not own a home or still have a mortgage – estimates suggest over 30% of superannuitants pay either rent or a mortgage. NZ Super is just not enough for these people.


For homeowners, two key issues are the shortage of houses suitable for retirement living and the lack of options for accessing the funds they have tied up in their home, for example through a reverse mortgage.


Lack of accessibility to health care.

Many areas throughout the country have GP shortages, so anyone moving to a different area to retire can struggle to find a doctor taking on new patients. Even if you are lucky enough to have a GP, it can take several weeks to get an appointment.


Te Whatu Ora (Health New Zealand) is undertaking significant restructuring which will undoubtedly have an impact on the delivery of health services. As we know, waiting lists for less urgent procedures like hip and knee replacements and cataract surgery continue to be an issue. Meanwhile, there is disparity between geographic regions as to the availability, quality, and accessibility of health care.


Shortage of rest home beds.

Rest homes are government regulated and funded through the Residential Care Subsidy. There is a cap on the amount of funding per patient that rest homes receive through the subsidy and, with recent high inflation, many are suffering extreme financial pressure. Severe staff shortages at rest homes only add to this, with the better funded public health system offering higher wages and salaries.


Over the last year around 1200 rest home beds were lost due to rest homes closing. The predicted demand for additional rest home beds is around 15,000 by 2030, yet bed numbers are falling.


Lack of employment opportunities for seniors.

There are many reasons why people over the age of 65 wish to continue working. Some are forced to find work to make ends meet, some want to continue making a positive contribution to the economy, and some just love working. Yet, there is very little support available to help keep people in employment in their senior years.


Lack of funding for support services for seniors.

Social isolation, accessibility issues, and digital literacy are all important issues for seniors, yet the Government allocates only a relatively small budget to organisations who help in these areas. Volunteer organisations are relied upon to fill the gap.

Calculate your income today.

There is no better year than an election year to raise awareness of these issues with your local MP and parliamentary candidates in your electorate. It’s time for retirees to get political!

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Written by:

Liz Koh

Liz Koh is a money expert who specialises in retirement planning. The advice given here is general and does not constitute specific advice to any person.

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