The Politics of Welfare State Retrenchment and New Zealand’s Superannuation Reform

Woo-Mo， Kang

doi:10.17000/kspr.20.1.201303.49

Once New Zealand was known as a welfare state pioneer with the Old Age Pension Act of 1898, the Social Security Act of 1938 and ‘by other means’, that is, through a range of policy instruments that tackled inequality and hardship within the labour market. However, the New Zealand government has made trials and errors to reform the Superannuation during the 1980s and 1990s. Superannuation reform was introduced in the context of a much wider revolution of economic policy, perhaps the most radical programme of economic liberalization an OECD country has ever seen. This revolution made New Zealand a political symbol of neo-liberal economic and social reform. But oversea attention has tended to focus on the economic half of the story while the welfare state reforms have rarely figured. Therefore, we will analyse the New Zealand’s Superannuation reforms: under what conditions is radical Superannuation retrenchment feasible? At a core of the analysis is the impact of the state of the domestic economy and of partisan factors, which, in turn, are likely to be mediated and cross-influenced by institutional configurations. One of my main conclusions is that the state of the domestic economy plays a much greater role in explaining Superannuation reform than is usually acknowledged in the political science theory. Moreover, we find evidence that the partisan composition of government impacts on retrenchment. Political institutions do matter, particularly the electoral system, which has important efforts on the way partisan influences.

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