# OECD Economic Survey of New Zealand 2026 — Ageing & Pension Recommendations **Source:** OECD Economic Surveys: New Zealand 2026 **Published:** 7 May 2026 (launched at NZ Treasury media briefing) **Category:** International / Economics / Superannuation **Cross‑references:** NZ Super Age Debate, Retirement Income Policy, Health Spending **KB Location:** `05_Funding_and_Subsidies` --- ## Overview The OECD's 2026 Economic Survey of New Zealand was launched at Treasury on 7 May 2026. It contains a comprehensive assessment of NZ's economic position and a specific reform agenda, including significant recommendations on superannuation, pension taxation, and ageing‑related spending. > _"Ageing will drive health, long‑term care and pension costs sharply higher, threatening debt sustainability unless reforms accelerate."_ --- ## NZ Superannuation Recommendations ### 1. Link Pension Eligibility Age to Life Expectancy The OECD recommends linking the age of public pension eligibility to life expectancy, with a **maximum age of 69**, while considering occupational and ethnic differences in life expectancy. - Current NZ Super eligibility age: **65** - National Party policy: raise to 67 from 2044 (Coalition Agreement with ACT) - NZ First: opposes any change - Labour: opposes raising the age ### 2. Reform Pension Taxation The OECD recommends switching NZ's current **Taxed-Taxed-Exempt (TTE)** system to an **Exempt-Exempt-Taxed (EET)** system — i.e., make contributions and investment earnings tax‑free, but tax withdrawals. This aligns NZ with 31 of 38 OECD countries. ### 3. Expand KiwiSaver - Increase contribution rates (Budget 2025: default 3% → 3.5% in 2026, 4% in 2028) - Target **10–12% for higher‑income earners** (similar to Australia's Superannuation Guarantee) - Restrict first‑home withdrawal rules - Enable regulated "private‑asset" fund options ### 4. Public/Private Pension Reform The OECD recommends a combined public and private pension and NZ Super Fund reform strategy. --- ## Government Response ### 1. Initial Response (7 May 2026 — Treasury/OECD Launch) **Finance Minister Nicola Willis** (via RNZ, 6 May 2026): - **No plans to raise the pension age before the 2026 election** - Rejected tax changes: _"We are trying to get the books back in balance so radical tax reforms that require a deficit on the government books are not something we are exploring right now"_ ### 2. Detailed Response (May 2026 — Newstalk ZB/Mike Hosking Breakfast) Willis expanded significantly on her position: - **"We are going to have to do something. If you're sensible, you listen to these facts."** - **Demographics breakdown:** 1960s: 7 workers per pensioner → today: 4 → 2065: 2 - **Cost pressure:** Super spending = ~16% of every tax dollar today → projected >20% - **"Every dollar we're spending on superannuation is a dollar not available for education, for health, for infrastructure"** - **"They don't need to be as dramatic as the OECD suggests, but some adjustments will be needed"** - Rejected any changes before the 2026 election ### 3. The Post Interview (Tom Pullar-Strecker, May 2026) Willis's most detailed policy interview: - **"It is not credible for any party to go into this year's election without a policy to ensure NZ's super settings are 'affordable and sustainable'"** - **"But my view is that if we want to ensure that every New Zealander in their retirement can be afforded a good retirement, then there will need to be changes to our superannuation settings."** - **"Having no policies to change superannuation settings was the same as saying 'what you want to do is tax New Zealanders more and more and more'"** - **"Whether or not it is through the approaches that the OECD suggests is another question. But is reform required to our superannuation settings? Yes."** ### 4. Prime Minister Luxon (May 2026 — Newstalk ZB) - **Confirmed National will campaign on raising super age at the 2026 election** - **"We will go to the election with another election policy around superannuation and lifting the retirement age for sure"** - Wants to implement **"as soon as we get back in"** for a second term - Called current settings **"unworkable and unaffordable"** - Acknowledged needs cross-party support to pass legislation ### 5. Full Party Positions | Party | NZ Super Age Position | Means-Testing Position | OECD Alignment | | --------------- | ------------------------------------------------------------------ | --------------------------------------------------- | --------------------------------------------------------------------- | | **National** | Raise from 65 to 67 (from 2044); election campaign on raising | Oppose (universal entitlement) | Partial — OECD wants link to life expectancy (potentially >67) | | **ACT** | Supports raising, possibly faster | May support targeting | Aligned — favours reform | | **NZ First** | **Keep 65 — non-negotiable** (Peters: "top line, not bottom line") | Oppose | **Opposes** | | **Labour** | Keep 65 (official policy) | Hipkins "open to conversation" but not party policy | Partial — open to means-testing but opposed on age | | **Greens** | Keep 65 | Oppose | Opposes | | **Māori Party** | Keep 65 | Oppose | Opposes — OECD's own equity analysis supports Māori/Pasifika concerns | ### Political Reality Check - Reform is a **"non-starter"** (The Spinoff) because NZ First blocks any change and National cannot govern without either Labour or NZ First - Super age will be a **defining 2026 election issue** — over-65s constitute >30% of voters with highest turnout - The OECD's ethnic equity analysis (Māori/Pasifika shorter life expectancy) adds complexity to the debate - Treasury's He Tirohanga Mokopuna 2025 LTFS reinforces that on current settings, debt heads toward 200% of GDP --- ## Economic Projections (Table 1.1) | Indicator | 2024 | 2025 | 2026 | 2027 | | --------------------------- | ----- | ----- | ----- | ----- | | GDP Growth | -0.3% | 0.5% | 1.4% | 2.3% | | CPI Inflation | 2.9% | 2.8% | 3.4% | 2.4% | | Unemployment | 4.8% | 5.3% | 5.4% | 5.1% | | Current Account Balance/GDP | -4.7% | -3.6% | -4.0% | -3.7% | | Gov't Gross Debt/GDP | 57.5% | 59.4% | 61.5% | 63.1% | **Key observation:** Ageing‑related spending pressures are expected to intensify even as the economy recovers. The gap between NZ's pension age (65) and rising life expectancy continues to widen. --- ## Other Recommendations Relevant to Older New Zealanders ### Health Sector - Quicker and deeper digitisation of the health sector - Address workforce pressures through improved productivity and service delivery ### Capital Markets / Retirement Savings - Average KiwiSaver balance: NZD 28,000 vs Australia NZD 130,000 - Mandatory replacement rate for average earner: 43.8% vs OECD average 63.2% - Recommend shifting to EET pension tax system to close the gap - Tighten first‑home withdrawal rules for KiwiSaver (withdrawals doubled from $100m/month in 2023 to $200m/month in 2025) ### Housing / Infrastructure - Address land‑use constraints and housing supply for growing regions - First national flood map announced in Budget 2026 — affects older homeowners --- ## Political Implications | Party | Stated Position on NZ Super Age | Alignment with OECD | | --------------- | ------------------------------- | ------------------------------------------------------------------------- | | National (Govt) | Raise to 67 from 2044 | Partial — OECD wants link to life expectancy (potentially higher than 67) | | ACT (Govt) | Raise to 67, possibly faster | Supports reform | | NZ First (Govt) | Keep 65 | Opposes OECD | | Labour | Keep 65 | Opposes OECD | | Greens | Keep 65 | Opposes OECD | | Māori Party | Likely keep 65 | Opposes OECD | The OECD recommendation adds to pressure from Treasury (LTFS 2025), the Retirement Commission, and NZIER for superannuation age reform — but the Government has explicitly ruled out action in the short term, likely ahead of the 2026 election. --- ## Sources - OECD Economic Surveys: New Zealand 2026 (full report): https://www.oecd.org/en/publications/oecd-economic-surveys-new-zealand-2026_3ec5de98-en.html (accessed 11 Jun 2026) - OECD summary — Recovering in an Uncertain World: https://www.oecd.org/en/publications/oecd-economic-surveys-new-zealand-2026_3ec5de98-en/full-report/recovering-in-an-uncertain-world_7e812bfa.html (accessed 11 Jun 2026) - OECD Chapter 4 — Unlocking Capital Markets: https://www.oecd.org/en/publications/oecd-economic-surveys-new-zealand-2026_3ec5de98-en/full-report/unlocking-capital-markets-to-drive-growth_d1f7a7f7.html (accessed 11 Jun 2026) - OECD PDF: https://www.oecd.org/content/dam/oecd/en/publications/reports/2026/05/oecd-economic-surveys-new-zealand-2026_27daa8d8/3ec5de98-en.pdf (accessed 11 Jun 2026) - RNZ — OECD report suggests raft of reforms: https://www.rnz.co.nz/news/business/594574/oecd-report-suggests-raft-of-reforms-to-help-new-zealand-economy (accessed 11 Jun 2026) - The Post — Willis agrees super settings must change (Tom Pullar-Strecker): https://www.thepost.co.nz/business/360999312/no-shortage-ideas-oecd-how-put-nz-economy-better-track (accessed 11 Jun 2026) - Newstalk ZB — Willis: changes don't need to be as dramatic: https://www.newstalkzb.co.nz/news/politics/nz-super-reforms-nicola-willis-says-change-can-be-less-dramatic-than-oecd-report/ (accessed 11 Jun 2026) - NZ Herald — Willis: change can be less dramatic: https://www.nzherald.co.nz/nz/nz-super-reforms-nicola-willis-says-change-can-be-less-dramatic-than-oecd-report/5HVKAHELSFDNTJI42Q6XFUZ5VU/ (accessed 11 Jun 2026) - NZ Herald — Luxon confirms National will run on raising super age: https://www.nzherald.co.nz/nz/politics/national-will-run-on-raising-super-age-as-soon-as-we-get-back-in-christopher-luxon/RTA6XYCZMBD3TND77OIZMTQRNI/ (accessed 11 Jun 2026) - The Spinoff — Super debate back but reform looks like non-starter: https://thespinoff.co.nz/the-bulletin/15-05-2026/the-superannuation-debate-is-back-but-reform-looks-like-a-non-starter (accessed 11 Jun 2026) - Financial Standard — OECD recommends NZ overhaul pension system: https://www.financialstandard.com.au/news/oecd-recommends-nz-overhaul-pension-system-179812468 (accessed 11 Jun 2026) ## KB Maintenance - **Updated:** 11 Jun 2026 — Added detailed Government Response (Willis interviews, Luxon confirmation, full party positions, political analysis) following Prompt B3-9 execution - **Next check needed:** June/July 2026 when the election campaign intensifies — track party manifesto releases on super - **Related trackers:** NZ Super Age Debate tracker, Retirement Income Policy tracker, Party Position Matrix - **Related KB files:** `2025 - Treasury - Long-term Fiscal Statement.pdf`, `2026 Issue Brief - Budget 2026 Implications for Older New Zealanders.md`, `2026 OECD Source Brief - Pensions at a Glance NZ Country Notes.md`, `2026 Party Position Matrix - Seniors and NZ Super.md` - **Cross-reference findings:** `17_Automated_Research/02_FINDINGS/2026-06-11_1000_PromptB3-9_OECD_NZSuperReport_GovernmentResponseCheck.md`