David Chaston explores how migrants and older workers are keeping NZ Super sustainable

This is a chart that worries many.

It shows how many people 15 to 64 years of age there are compared with those 65 and older. 

It is trending in such a way that it is hard not to conclude that ‘soon’ there may be too few workers paying tax to afford public retirement superannuation.

It calls into question the viability of the universality of NZ Superannuation.

How long could this trend continue?

But other data from Statistics NZ’s population database produces this:

The median age of our population peaked in 2013 at 37.6 years, and has been falling since.

That hardly seems consistent with what the data in the first chart shows.

Part of the issue with the data in the first chart is that it assumes everyone 65 and over is not working. Everyone 65 and over is receiving the universal NZ Super, but increasing numbers of them are working (many by choice; me for example).

If that data is adjusted to show how many people are working for each person over 65 (and getting NZ Super), then there is no deterioration.

In fact, this ratio has been largely stable for the past 15 years.

Of course, this is not to say that the numbers of people 65 and over won’t live a lot longer, nor to deny that the retirement surge of boomers is actually just beginning and has some time to go.

But a key way to manage that is to try to keep the median age of the population from growing, something we have been fairly successful at recently.

And one way to do that is via immigration of under 35 year old workers. 

Migration opportunities come in cycles, cycles that ebb. Even the current high levels haven’t pushed our rate of population growth to unusual levels. It may be relatively high now, but it is not by much margin.

Curbing migration aggressively will likely have the unfortunate effect of making NZ Super unaffordable at current levels much sooner.

(All data in this article is from the “Population Estimates” tab (DPE) in their Infoshare resource.