Pensioners' growing tax bill
People who are over 65 are contributing 15 percent of all personal taxes but economists say even as that amount grows, it won't help balance the books.
Older New Zealanders are contributing an increasing portion of all personal taxes, but that alone is insufficient to balance the nation's budget. Data from the Official Information Act indicates there were 268,800 working superannuitants and 632,300 non-working superannuitants in the most recent tax year. The working group paid $6.6 billion in income tax and $1.56 billion in NZ Super tax, while the non-working group paid $4.24 billion in income tax and $2.6 billion in NZ Super tax.
Together, they contributed $9.84 billion in income tax, with $4.166 billion allocated to superannuation. The working group received $772 million more in net superannuation than they paid in income tax on other earnings, averaging $2872 per person. Conversely, the non-working group received an average net transfer of $19,018 per person.
Westpac chief economist Kelly Eckhold predicts the tax burden of older taxpayers will continue to rise as more people remain in the workforce longer. Stats NZ projections suggest the percentage of 65-year-olds will increase from 16.5% in 2024 to around 19% by 2031 and above 20% by 2036. The growing number of 65-year-olds will contribute both income tax and GST, but healthcare costs are also on the rise, making it challenging to achieve fiscal balance.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
