One reason I am beginning to obsess over Kiwisaver is that I have begun to think forward to what may be the most important civic responsibility that I have to New Zealand in the future.
You see, this is not going to be an easy century for New Zealand. At present we face impossible challenges, fuelled in part by our extraordinary commitments.
There are many specific challenges that threaten New Zealand this century. Below are just some of them.
The biggest commitment is the Paris Agreement. The cost of meeting the Paris Agreement penalties alone are massive, particularly given the environmental course we are trending towards. Alone it is very likely that if we remain on the Paris Agreement until 2050 our obligations will bankrupt New Zealand.
The introduction of the electric fleet will be a huge change for New Zealand, but for the Government it could be a sheer disaster, leading to $1 billion per annum in lost revenue from excise tax alone.
And then there’s climate change. It is impossible to model how changes to weather events will affect us, but it seems extremely likely that the Government will be left footing the bill for repairs of unimaginable scale.
Meanwhile, the long term cost of superannuation is going up, at the same time that raising the age for superannuation eligibility becomes politically unsaleable.
Then there’s the switch to automation and the technocratisation of the labour market. The arrival of AI and the concomitant effects on low skilled labour.
The end of beef and lamb – the cessation or reduction of our main export, which provides the backbone of our wealth.
All of these things will damage the Government. In particular, they will undermine the Government’s revenues and raise expenses, meaning that the likelihood of having a secure pension in retirement is minimal.
Indeed in some ways, the very act of planning for retirement is an act of such optimism that it is almost ill-fated. That is why it is important to do it.
For all these reasons, the very least I can do is focus on becoming self-sufficient in my old age. For anyone who can think clearly, it is a civic responsibility.
