The Compulsory Retirement Savings Scheme Referendum of 1997
David A Preston
In September 1997 a postal ballot by New Zealand voters decisively rejected the proposed Compulsory Retirement Savings Scheme (CRSS).
This article summarises the background to the referendum and the processes that took place leading up to the vote. The main issue underlying the referendum was the ageing population, and the problem of how the public sector can make provision for the increased health and pension costs without creating an excessive tax burden on the future workforce. The CRSS offered a way to shift part of the cost of future pensions onto current earners.
In 1977 the National government had introduced perhaps the most generous universal pension scheme ever introduced in any country, and much of the subsequent public pension policy can be seen as attempts by successive governments to back out of this scheme, while accommodating the expectations of a large group of superannuitants who now saw it as their birthright.
In 1996, part of the Coalition Agreement of the new coalition government was to design a compulsory superannuation savings scheme, which was to be the subject of a referendum. The public’s subsequent vehement rejection of CRSS means that for the time being compulsory contributory superannuation is off the New Zealand policy agenda.