Treasury suggests lifting pension age

The Treasury says New Zealand does not face a fiscal crisis, but gradual changes are needed over time to cope with the demands of an ageing population.

In its third statement on the country's long-term fiscal position, the Treasury on Thursday again suggested lifting the age of eligibility for the pension from 65 to 67 to help alleviate rising costs pressure on the Government, saying changes are needed to avoid problems 20, 30 or 40 years from now.

Treasury Secretary Gabriel Makhlouf said he wants the report to promote a nationwide conversation about the need for change.

"What the Treasury wants to see done with this is a recognition that there are real fiscal pressures in the long-term and actually there are choices ... for all of us as a society and we should start addressing the choices and the issues.

"Have the conversation, have the debate - which we will participate in and hopefully everyone will participate in - and then we'll be in a better place to make recommendations. But at the moment ... there is no crisis."

Other options the Treasury has suggested - aside from tinkering with New Zealand Superannuation - include increasing the goods and services tax (GST) to 17.5% and slowing the rate of increase in health spending.

It said if New Zealand reverted to historical spending trends then healthcare and superannuation costs, as a proportion of economic activity, would rise dramatically.

But Finance Minister Bill English said on Thursday the report vindicates what the Government has been doing and there is no need to consider the Treasury options, including raising the age to get a pension.

"Treasury's long-term fiscal statements actually are reasonably optimistic, as what it shows is that with the kind of decisions the Government's made in the last five years it's had quite a big impact on the long-term fiscal outlook.

"And if we stick to the track we're on, then we would have the long-term outlook for government spending in reasonable control."