Prime Minister Christopher Luxon says the Government has a “deep commitment” to universal superannuation, but wants to find more political common ground before making any changes to the government-funded retirement payment.
Luxon made these comments at a Westpac-hosted Trans-Tasman Business Circle event on Friday. During a Q&A session with NZME’s head of business, Fran O’Sullivan, he said superannuation is one of the many areas that the Government has to invest in over the coming years.
“We’ve got to deal with savings and investments in a number of other things [like] the housing market and getting that balance in the right way. Superannuation is one of those things,” Luxon told O’Sullivan.
He proceeded to describe superannuation as “if you're looking out the front window screen of the car and you can see a bumper that's down the road.” The reasoning behind this comparison was left unexplained.
In the 2026 Budget on Thursday, Finance Minister Nicola Willis revealed that New Zealand Superannuation is “growing rapidly” as the country’s population gets older. Budget forecasts show the annual cost of superannuation jumping to $31.2 billion in 2029/30, up from $24.7 billion in the current 2025/2026 financial year.
To help meet the future costs of New Zealand Superannuation, withdrawals from the NZ Super Fund are now expected from 2054 onwards. Previously, withdrawals had been expected from around 2035/36. As at 31 March, the fund’s value stood at $86.6 billion.
On Friday, Luxon said he wants more “visibility” on superannuation so that the Government could work out where to find common ground politically.
“It shouldn’t be an ideological issue; it’s actually a New Zealand issue that the country is going to have to deal with and successive governments of different colours or flavours will have to deal with. So why don't we talk about it and why don't we work out where we can and at least try to find some common ground around an issue like that,” he said.
O’Sullivan told the Prime Minister that the NZ Super Fund had been sold to people like herself – the baby boomer generation, who were born between 1946 and 1964 – as being ready to start “spilling out” by the time baby boomers needed to start drawing on it.
“We’re all going to be dead by then,” she said and questioned the Government’s thinking behind pushing out the fund’s withdrawal start date by 20 years.
“Those are the kind of conversations that we've got to have as part of that core superannuation conversation,” Luxon said.
“And that's why I say to you, look, we're [in the] early days and a problem is coming at us.”
Contributions to the Super Fund are expected to increase to a total of $3.1b over the next four years which is $2.2b more than previously expected. According to Willis on Thursday, another significant change was the Guardians of the NZ Superannuation lowering their assumption of long-term expected returns from 7.8% to 7.2%.
“This reflects their view that, with global equity markets at historically high levels, future returns will likely be weaker compared to recent years,” she said.
Budget 2026 revealed that the OBEGALx – the Operating Balance Before Gains and Losses, excluding the revenue and expenses of the Accident Compensation Corporation – was expected to return to surplus in 2028/29, a year earlier than was forecast in December.
The net operating package was $2.1 billion, incorporating $3.8b of new spending a year on average, which included $1.7b of savings and revenue, mainly from the public service overhaul, the scrapping of the final-year fees-free scheme and reduced Kāinga Ora construction costs.
1 Comments
Up until MMP, and beyond, National & Labour governments allowed the known projection of the unsustainability of NZ’s super to continue unaddressed. These two dominant parties have an inherent duty to the people to do something about it rather than dithering around with political niceties which arise from nothing other than blatant self interest. Some maturity, leadership and integrity needs to be displayed. Form a neutral bi-partisan working group and enlist requisite independent expertise as necessary. Formulate a plan, put it to parliament with the clear mandate of the combined vote and share equally the plaudits or the criticism. The junior parties can either contribute or go whistle.
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