Preferences on designing and financing New Zealand's retirement income schemes

The survey, conducted in 2022, is almost identical to a 2014 survey. It is designed so that respondents make trade-offs between seven features of retirement income schemes, including taxes.  The results are similar in both years.

Five results stand out:

1. There was noticeably more support in 2022 for maintaing the age of eligibility at 65 years rather than increasing it to 67 years, although opinion is still divided.  
2. In both years, support for universality and opposition to means testing is the most important criterion overall, although it was seen as less important in 2022 than in 2014.
3. Opposition to a small compulsory savings scheme is higher now than in 2014, but it remains small. Most people would not oppose a compulsory savings scheme.
4. Opposition to an increase in current taxes has increased, but a majority of people still would be willing to pay higher taxes now to reduce the need to raise taxes on future generations.
5. Overall, the 2022 respondents were less confident than the 2014 respondents that they would be comfortable in retirement.

The survey highlights that New Zealanders have diverse views on the relative importance of different aspects of retirement schemes. The results can be used to make inferences about the relative popularity of different potential policy reforms. As was the case in 2014, raising the age of eligibility to 67 years attracts much less support and much more opposition than raising taxes to keep the age at 65 years. If taxes were raised, there is a preference to raise them sooner rather than later to avoid significant increases for future generations. 

Biography

Andrew is a research economist at the Reserve Bank of New Zealand and a visiting professor at the Asia School of Business, Kuala Lumpur. His research interests include intergenerational economics, tax policy and social security; transport and housing economics; and international monetary economics.  He has written widely about the New Zealand economy, and was a member of the 2010 Saving Working Group. Andrew has a PhD in Economics from Princeton University and taught at the University of Michigan and the University of Otago.