Article #450
Nine years ago, I wrote about Roman Centurions. The New Zealand Economics Forum last month proved I wasn’t being dramatic enough.
When I wrote my very first Canny View in September 2017, I told the story of Roman Emperor Augustus and his military pension scheme, the Aerarium militare. Augustus faced a problem that will sound familiar: Romans were living longer, the pension fund was catastrophically underfunded, and someone had to pay for it.
His solutions were creative, if not entirely honest. Keep raising taxes. Extend the military service requirements, again and again. And when the pension rolls got too heavy? Launch another campaign! Rome always found another frontier war conveniently thinned the numbers — the Germans, the Dacians, the Parthians. It was just fiscal procrastination dressed up as military glory.
I wrote then: what is happening today is no different to those Roman times. At the end of the day, someone has to pay for it.¹
The Road to Rome’s Problems
The Aerarium militare is one of history’s most instructive fiscal cautionary tales. Augustus established it in 6 AD, seeding it with 170 million sesterces of his own money — a sum so large he had to make it a personal gift to avoid a Senate revolt over new taxes. When that proved insufficient, he pushed through a 5% inheritance tax and a 1% sales tax on goods sold at auction to keep the fund solvent. When Tiberius later tried to abolish the sales tax, his generals warned him that there was no other way to pay veterans. So, the tax stayed.
Each time the fund came under pressure, the response was the same: extend the service requirement. Augustus raised it from 16 years to 20, then up to 25. Soldiers who had signed up expecting to retire at 16 years found the goalposts moved, repeatedly, for fiscal reasons. Sound familiar?
Some historians trace a significant part of Rome’s eventual decline to the Senate later cutting pension payments altogether. With less incentive to serve, Roman citizens stopped enlisting. The ranks filled with barbarian mercenaries. Cohesion and discipline collapsed. The pension problem eventually helped unravel the army that held the Empire together.
New Zealand introduced its own old-age pension in 1898 — one of the first countries in the world to do so, under Richard Seddon’s Liberal government. It would be received at age 65, when male life expectancy was just 56. Like the Aerarium, it was never designed to be paid to most people. It was a safety net for the few who beat the odds. The pension that most New Zealanders now expect to receive for 20-plus years of retirement was conceived for people who, statistically, were unlikely to reach it at all.
Shifting Demographics Add Up to a Problem
Back in 2017, when I wrote that first article, over 15% of New Zealand’s population was aged 65 or older. Today, we’re past 16% and heading towards 20–21% within the next decade.⁵ We’ve gone from around 750,000 receiving NZ Super then, to over 912,000 today.⁶ Crucially, the working-age population supporting them is shrinking proportionally.
It’s not a sudden crisis of compassion, but rather a mathematical problem. The ratio of workers to retirees is deteriorating. Empires fall not from external threats but from internal fiscal contradictions — and we are living that reality now.
What’s Changed Since 2017?
In 2017, Bill English had just opened the door to raising the retirement age to 67 from 2037. Jacinda Ardern promptly pledged to repeal it and declared she’d resign before raising the retirement age. Labour won, the policy was scrapped, and the age stayed at 65. It hasn’t shifted since.
Movement comes only at the margins. Residence requirements for NZ Super are increasing from 10 to 20 years, phased through to 2042.⁷ Superannuation will consume 18.6% of tax revenue by 2029, up from 16.6% in 2023.³ But the fundamental policy lever — the eligibility age — remains politically untouchable. Augustus would understand completely.
What Treasury Said in Hamilton
At February’s New Zealand Economics Forum in Hamilton, Treasury Secretary Iain Rennie warned that ageing is already materially lifting expenditure and will continue to do so throughout the next decade, outpacing revenue growth. Without policy changes, New Zealand’s debt trajectory will become unsustainable.²
The number of people receiving superannuation will grow from 928,000 today to over 1,084,000 by 2029/30. That’s roughly the entire population of Tauranga added to the pension rolls in just under five years, costing a cool $7.7 billion more per year – equivalent to 22% of all projected tax revenue growth over that period.² Rennie was clear this isn’t a problem for future governments alone: “They are part of the chill headwinds confronting the government now.”²
Treasury’s longer-term projections show that without policy changes, government debt could reach unsustainable levels by the 2060s. This would be driven primarily by superannuation and healthcare costs for our ageing population.⁴ Every year of inaction makes the eventual adjustments more severe. That’s Treasury’s own modelling, not an opinion.
The Age Question Nobody Wants to Answer
At the same forum, a panel of economists and former politicians concluded that New Zealand can’t afford superannuation at 65… or even 67. Some suggested eligibility may need to rise as high as 72 or 73 to be viable long-term.²
Back to our Roman friends: Augustus didn’t want to cut centurion pensions either, as it was politically impossible. Instead, he extended service requirements, raised taxes, and launched another Parthian campaign. Each short-term fix made the structural problem worse. Eventually, the promises became mathematically impossible to honour, and the system failed.
We are not Augustus. We have better data, better institutions, and better options. What we seem to lack is the political will to use them.
What Actually Needs to Happen
Raising the age alone won’t fix this. The Forum panel agreed on that much.²
The deeper issue is savings and productivity. There is no credible path to lifting New Zealand’s productivity without matching Australia’s savings rate.² That means taking KiwiSaver seriously: Not as a nice-to-have, but as the foundation of our retirement system.
With 3.4 million New Zealanders enrolled — 90% of the workforce — KiwiSaver has been a genuine success. But 1.6 million members were making no contributions as of March 2025, either out of the workforce or on contribution holidays.⁴ It’s a structural gap we keep patching rather than fixing.
Compulsory contributions, properly locked in until retirement, would be a meaningful start. Paired with a gradual, signalled increase in eligibility age — giving people decades to plan — and we begin to look less like Augustus clutching at straws, and more like a country with a plan.
If you’re under 50, don’t rely solely on NZ Super. Your KiwiSaver balance isn’t a supplement anymore. It’s becoming the primary pillar of your retirement income – treat it accordingly.
The 450th Edition Lesson
In my first article, I concluded that failing to act would be irresponsible and place an extremely unfair burden on younger generations.¹ Nine years later, that’s exactly what we’ve done.
New Zealand is in a stronger position than most comparable countries. But public debt is at its highest point in 30 years, and the cost curve is steepening. The window for gradual, manageable change is narrowing.
The Romans had options. They could have reformed early, adjusted gradually, and built a sustainable system. Instead, they extended, delayed, promised — until the promises became impossible to honour and the system helped collapse the army that held everything together.
We still have choices; they didn’t. But as Treasury made clear last month, that won’t be true forever. And conversation without action is just more Parthian campaigning.
The Centurions learnt too late that empires don’t honour promises they can’t afford. We can avoid that mistake. But only if we start now.
Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe,
Ngāti Waitaha)
Financial Adviser and CEO at Stewart Group
Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
References
¹ Stewart, N. (2017, September 16). Like Romans, fall on our sword and raise retirement age. Stewart Group. https://www.stewartgroup.co.nz/we-love-to-write/2017/9/16/like-romans-fall-on-our-sword-and-raise-retirement-age
² New Zealand Economics Forum 2026 (February 2026). Treasury presentations on fiscal sustainability and superannuation costs.
³ New Zealand Treasury. (2025). Budget Economic and Fiscal Update 2025. https://www.treasury.govt.nz/publications/efu/budget-economic-and-fiscal-update-2025
⁴ New Zealand Treasury. (2025). He Tirohanga Mokopuna 2025 – Long-term Fiscal Statement. https://www.treasury.govt.nz/publications/ltfp/he-tirohanga-mokopuna-2025
⁵ Stats NZ. (2024). Population estimates and projections. https://www.stats.govt.nz
⁶ Ministry of Social Development. (2025). New Zealand Superannuation recipient data.
⁷ Work and Income. (2024). Change to residence criteria for NZ Super and Veteran’s Pension. https://workandincome.govt.nz/eligibility/seniors/nz-super-and-veterans-pension-residency-changes-2024.html
