text:
KiwiSaver: New Zealand's New Subsidized Retirement Savings Plans
Social Security Bulletin, Vol. 67, No. 4, 2007
The author is with the Division of Program Studies, Office of Research, Evaluation, and Statistics, Office of Retirement and Disability Policy, Social Security Administration.
The findings and conclusions presented in the Bulletin are those of the authors and do not necessarily represent the views of the Social Security Administration.
Since July 1, 2007, New Zealanders have had a new option for their retirement savings—KiwiSaver—a type of subsidized, defined contribution retirement savings plan offered by private-sector providers. New labor force entrants in permanent positions who are aged 18 or older are automatically enrolled in a KiwiSaver plan, but are able to opt out of the plan if they wish. Also, all individuals younger than age 65, including anyone not in the labor force, are permitted to set up a KiwiSaver account.
A law passed in September 2006 created the KiwiSaver to encourage New Zealanders to save more for retirement and to supplement the New Zealand Superannuation (NZS) benefit, a flat-rate universal old-age pension. Although lower earners mainly rely on NZS benefits for their retirement income, middle and higher earners must supplement this benefit to maintain their preretirement standard of living. Workers may also purchase supplementary retirement plans, called superannuation plans either through their employers or directly from an insurance or other financial services company.1 The New Zealand government introduced the KiwiSaver, in part, because by the end of 2005, less than 30 percent of the active labor force was covered by some type of superannuation plan.
This note provides a brief description of the New Zealand public pension system and its sources of funding, statistics on the country's savings rates before the KiwiSaver law was passed, and a detailed description of KiwiSaver.
New Zealand's Public Pension
New Zealand Superannuation is the flat-rate public pension available to all New Zealand residents aged 65 or older who have lived in the country for 10 years since age 20, or for 5 years since age 50 (SSA 2007). NZS benefit amounts depend on marital status and living arrangements and are taxed as income. Each year benefit amounts for a married or civil union couple are adjusted for inflation and then adjusted to fall between 65.0 percent and 72.5 percent of the country's net average wage.2 The NZS retirement benefit for other categories is computed as a percentage of the benefit amount for married couples and civil unions: single persons living alone receive 65 percent of the benefit, and single persons living with others receive 60 percent. NZS benefits are adjusted according to changes in the consumer price index (Toder and Khitatrakun 2006). NZS is the government's largest single budget item with a current net cost of 3.4 percent of gross domestic product (GDP), which is expected to rise to 6.9 percent of GDP by 2050 with the aging of the population (NZSF 2006).
Although NZS currently is funded by general revenues, as the population ages this program will need an additional source of funding to meet benefit payment projections. The New Zealand Superannuation Act 2001 created a separate investment fund called the New Zealand Superannuation Fund (NZSF, or the Fund) to partially finance the projected rise in costs of New Zealand Superannuation benefits as the country's population ages. From 1970 through 2005, while the overall population grew by 44 percent, the number of people aged 65 or older doubled. In 2006, the number of people aged 65 or older represented 12 percent of the population and is expected to reach 26 percent by 2051 (Statistics 2006). According to the National Population Projections, the ratio of the working-age population (aged 16–64) to the population aged 65 or older was 5.5 to 1.0 in 2004. This figure is expected to drop to 3.0 to 1.0 in 2028 and to 2.2 to 1.0 by 2051 (Statistics 2004).
The government expects to finance the NZSF from general revenues with an average contribution of NZ$1.95 billion (US$1.6 billion) a year until about 2027.3 In September 2003, the government made the first payment to the NZSF of NZ$2.4 billion (US$1.9 billion). By October 30, 2007, its assets totaled NZ$14 billion (US$11.3 billion), and the average nominal rate of return since 2003 was 14.29 percent.
By law, the government may not withdraw any capital from the Fund before July 1, 2020. The New Zealand Treasury estimates that by about 2028, when the ratio of the working-age population to the population aged 65 or older falls to about 3 to 1, the government will stop contributing to the NZSF and begin taking money out of the Fund to cover about 15 percent of the net yearly superannuation costs from 2055 through 2075.4 The Fund is expected to continue growing over time because the capital withdrawals are projected to be less than the Fund's income (NZSF 2006 and 2007; MSD 2007; Treasury 2006).
The Fund operates "at arms length" from the government. The Guardians of New Zealand Superannuation, a separate government organization, manages and administers the Fund's assets. The Board, which oversees the Guardians, is made up of five to seven members who are recommended by the Minister of Finance and appointed by the Governor General. A formal review of the Guardians' performance will be conducted about every 5 years by an independent agent appointed by the Minister of Finance (NZSF 2006).5
Saving for Retirement
KiwiSaver was introduced to help New Zealanders save more for retirement. In March 2007, Finance Minister Michael Cullen stated that New Zealanders have one of the lowest household savings rates among the developed countries. Cullen (2007a) cited the New Zealand Reserve Bank estimates of current household savings rate at negative 17.5 percent. A March 2007 New Zealand Treasury study concluded that about 20 percent of the population aged 45–64 needs to save more for retirement, including about 9 percent of individuals and 13 percent of couples aged 55–65 (Hosking 2007).6
A 2003 report from a panel of experts found that economic well-being in retirement may be substantially different for the future cohort of retirees, compared with current retirees.7 The report concluded that a large percentage of current retirees are able to maintain their standard of living through a variety of sources: NZS, private savings, and mortgage-free home ownership. The report also found that although those nearing retirement should be able to meet their needs, younger workers may have lower standards of living in retirement because of high levels of debt, student loans, child-bearing at later ages, and potentially fewer mortgage-free homes (IBIS 2004).
Participation in supplementary retirement plans has been relatively low. In New Zealand, voluntary supplementary retirement plans (called superannuation plans) are available through employers or directly from an insurance or other financial services company. At the end of 2005, more than 600,000 individuals were enrolled in some type of superannuation plan with a total of NZ$18.2 billion (US$14.6 billion) in assets. Half of these individuals (about 13 percent of the labor force) were enrolled in employer-sponsored retirement superannuation plans with a total of NZ$11.5 billion (US$9.2 billion) in assets (MED 2006).8 According to the 2001 Household Savings Survey, less than 20 percent of those who earned between NZ$15,000 and NZ$50,000 (US$12,000 and US$40,000) per year were enrolled in some type of superannuation plan. The government is targeting this group of earners with KiwiSaver (Cullen 2007b).
KiwiSaver is a new type of subsidized, defined contribution retirement savings plan created to supplement NZS and help increase an individual's retirement income.9
Beginning July 1, 2007, new permanent workers aged 18–65 are automatically enrolled in a workplace KiwiSaver plan, but have from the second to the eighth week of their employment to opt out of the plan.10 Anyone younger than age 65, including the self-employed and anyone not in the labor force, may choose to set up a KiwiSaver account with any provider. Workers who are automatically enrolled in a KiwiSaver plan may choose to move their account to another provider at any time. Those aged 65 or older may continue to contribute to their KiwiSaver account as long as they joined a plan before age 65. Although individuals are permitted only one KiwiSaver account, workers with multiple jobs may contribute to their account from each of their current jobs.
Individuals who are younger than age 65 and either citizens of New Zealand or entitled to stay in New Zealand indefinitely are permitted to have a KiwiSaver account as long as they reside in the country. New Zealand government employees working outside of the country may also opt into a KiwiSaver plan.
Contributions and Government Subsidies
Workers may select a monthly contribution rate of either 4 percent or 8 percent of gross earnings; those who do not choose either rate will automatically be assigned a 4 percent contribution rate. Workers may increase their contribution up to the 8 percent rate at any time. KiwiSaver account holders who contribute to their account will receive a tax credit of up to NZ$20 (US$16) a week and NZ$1,040 (US$836) a year that will be deposited directly into their KiwiSaver account.
Until April 1, 2008, employers had the option of paying part or all of an employee's KiwiSaver contribution. The employer's contribution of up to 4 percent of the employee's gross earnings was tax-exempt to the employer.11 Because this is not a matching contribution, the total employer/employee contribution was either 4 percent or 8 percent.
Beginning April 1, 2008, all employers are required to contribute to an employee's KiwiSaver account: starting with 1 percent of the employee's gross salary in 2008 and adding 1 percent each year until the mandatory employer contribution reaches 4 percent of gross salary by April 1, 2011. Employers receive a tax credit of up to NZ$20 (US$16) per week per employee (Cullen 2007).
Another arrangement is possible between April 2008 and March 2011. If both the employer and the employee agree, they are permitted to divide the employee's contribution: in 2008, each would contribute 2 percent of the employee's gross earnings; by 2010, each would contribute 3 percent; and by 2011, they both would contribute 4 percent.12
Employers must withhold contributions beginning with a new employee's first paycheck, unless the employee opts out of the program (between the second and eighth week of employment). Those who opt out of the program will receive a refund of their contributions. The government tax authority, Inland Revenue, collects the contributions from employers and distributes them to the employees' KiwiSaver plans.
The New Zealand government provides two other subsidies (in addition to the tax credit): a one-time tax-free payment of NZ$1,000 (US$804) to each KiwiSaver account after the individual plan receives the first contribution to that account; and, a NZ$40 (US$32) annual fee subsidy to each account holder to defray administrative costs. The fee subsidy is payable up to age 65, or 5 years after a worker older than age 60 first sets up a KiwiSaver account. The government has not set a limit on how much providers may charge account holders for administrative fees.
"Contribution Holiday" and Early Withdrawals
After the first 12 months of membership, automatically enrolled workers may take a "contribution holiday" for a minimum of 3 months, up to 5 years at a time for any reason. However, workers with a serious illness or experiencing a financial hardship may take the "contribution holiday" before the end of the first year of membership. Details of the "contribution holiday" provision for those who contract directly with a plan (the self-employed, those who are not in the labor force, and workers younger than age 65 who choose a KiwiSaver plan that is not sponsored by their employer) are dependent on the particular plan provider. Also, some plans and mortgage providers may allow account holders to divert up to one-half of their contribution to pay for a mortgage after contributing to a KiwiSaver account for 12 months.
After the opt-out period expires, KiwiSaver participants may withdraw all of their funds at age 65 or 5 years after they opened their account, whichever is later, and at any time in the event of serious illness.13 Participants may withdraw all of their contributions and any vested employer contributions if they:
- face significant financial hardship such as the member's or dependent's medical care, a dependent's education, or the member's inability to meet minimum living expenses according to normal community standards determined by law;
- leave the country permanently; or,
- make a down payment on the purchase of a first home after at least 3 years of saving in a KiwiSaver account. Beginning in 2011, the government plans to provide an eligible first-time home buyer who has a KiwiSaver account (subject to income and housing cost limits) with a home ownership subsidy of NZ$1,000 (US$804) per year, up to a maximum of NZ$5,000 (US$4,018) per person (Treasury 2007).
Workers who have been automatically enrolled and do not choose a registered provider are assigned to a default provider.14 The Ministry of Economic Development approves all KiwiSaver providers including a limited number of default providers selected through a tender process.15 It is also responsible for supervising KiwiSaver plans, issuing provider and plan regulations, and negotiating fees with the default providers. Although the default providers offer only plans with a conservative investment portfolio, other registered providers are permitted to provide a variety of investment portfolios such as conservative, balanced, or growth. KiwiSaver accounts are portable and members may change plans and investment risk portfolios at any time. The government provides no guarantees for the funds in KiwiSaver accounts.
Employers must provide access to a KiwiSaver plan to all employees although workers may choose any registered KiwiSaver plan. Employers may convert their existing employer-sponsored superannuation plan to a KiwiSaver; they may also request an exemption from the government from providing their employees with access to a KiwiSaver plan, if their registered superannuation plan meets certain criteria such as limiting employees' access to their retirement savings and requiring them to contribute at least 4 percent of earnings to their employer's superannuation plan.
Financial Education
The New Zealand Retirement Commission is charged with providing workplace financial education programs to help workers make informed decisions about establishing a KiwiSaver account. The Commission, established in 1993, has been conducting financial education programs around the country on a wide range of topics including saving, debt management, housing, and understanding net worth. Until now, workplace financial education focused solely on retirement seminars for workers nearing retirement. The new financial education program will help individuals assess whether or not KiwiSaver is appropriate for them (Feslier 2006). The Commission's public information Web site, http://www.sorted.org.nz, provides free financial education information including online tools to help workers make an informed decision about KiwiSaver (MSD 2007).16
Recent Tax Incentives for Retirement Savings
The original KiwiSaver bill submitted to Parliament in February 2006 did not contain any tax exemptions.17 However, just before its passage by Parliament in August 2006, tax incentives for employer contributions to KiwiSaver plans were added to the bill. As a result, the Association of Superannuation Funds of New Zealand lobbied the government to extend the same tax breaks to these occupational pension plans so that KiwiSaver plans would not have what was perceived as an unfair advantage over superannuation plans. Thus, the December 2006 tax bill passed by Parliament contained a provision that allows the same tax breaks to superannuation plans with the same requirements as the KiwiSaver: fully portable, full vesting, and "lock-in until retirement." In May, Finance Minister Cullen announced in his "Budget 2007" speech some additional changes to KiwiSaver and qualified superannuation plans: a tax credit for employees and phased-in mandatory employer contributions. Legislation for the employee tax credit was enacted in May 2007 (Tax Policy 2007) and the provision for mandatory employer contributions was enacted in December 2007.
Take-up Rate
Before the tax incentives for workers were added to the KiwiSaver bill, the government had predicted that 345,000 workers would have a KiwiSaver account in the first year and by 2013, that figure would reach 700,000—about 25 percent of all eligible individuals. When the KiwiSaver law was passed (with tax incentives), the government estimated that 50 percent of those eligible would have a KiwiSaver account no later than 2017. Based on the later estimates, the government predicted that its annual expenditures on KiwiSaver could be close to NZ$2 billion (US$1.6 billion) per year as early as 2012 (Cullen 2007b).
By the end of 2007, the take-up rate far exceeded government predictions—more than 300,000 workers were enrolled in a KiwiSaver plan.18 According to the Retirement Commission's 2007 Review of Retirement Income Policy, based on the current rate of enrollment, the government incentives could be much more costly than the most recent estimates. The Commission urged Treasury to estimate the likely future costs of KiwiSaver to the government including the sustainability of the current incentives (Retirement Commission 2007c).
Program Evaluation
Researchers have pointed out a number of unresolved issues concerning KiwiSaver, which include the following:
- The government could negotiate such low administrative fees with the default providers that smaller, nondefault providers might not be able to compete.
- Saving for retirement and saving for a first home could be conflicting goals that could undermine the retirement savings aspect of KiwiSaver.
- An individual may contribute for only 12 months to qualify for the government subsidy and then take a "contribution holiday." The potential for thousands of inactive accounts with very low balances could be very costly to administer.
- The choice between contribution rates of only 4 percent and 8 percent of salary can limit the amount an individual is able to contribute to an account. If there were more options, such as gradually increasing the rate from 4 percent to 8 percent of salary over a period of 4 years, a larger number of account holders might be able to afford to contribute more to their KiwiSaver account as their salaries rise.
- Many first-time home buyers would be excluded from a KiwiSaver housing subsidy because the limits on household income and the cost of the house are likely to be relatively low. (Because this aspect of KiwiSaver will not be introduced until 2011, the limits have yet to be established.)
- The KiwiSaver law does not address the issue of how to protect the value of the savings after withdrawal. A lump-sum withdrawal is permitted at retirement and there is no requirement to use these funds for retirement. Also, the law does not include measures to encourage the growth of the annuities market. Because only a few companies currently offer annuities, rates are not competitive and the types of annuities available are limited. (Toder and Khitatrakun 2006; St. John and Littlewood 2006a and 2006b).
The government is in the process of developing the KiwiSaver Evaluation Program to assess the strengths and weaknesses of KiwiSaver. The program could address some of the previously mentioned unresolved issues. Inland Revenue, Treasury, the Ministry of Economic Development, and the Ministry of Social Development are working on this policy initiative. The government intends to evaluate KiwiSaver from its inception to make program improvements quickly. Areas of study will include levels of participation, cost effectiveness, and public awareness of KiwiSaver. The New Zealand government hopes that the data they collect will help other countries that are considering automatic enrollment retirement savings programs (MSD 2007; Retirement Commission 2007a).
1. In New Zealand, the term "superannuation" means retirement.
2. This figure has been raised to 66 percent during the term of the current government as a result of an agreement with a coalition party. The floor is set by law at 65 percent (MSD 2007); according to the New Zealand Superannuation Act 2001, average wage is determined by the last Quarterly Employment Survey published by the Department of Statistics before March 1 each year. For more information on the average wage, see Statistics (2007).
3. For more information on the government's contribution to the NZSF, see sections 42 and 43 of the New Zealand Superannuation Act 2001.
4. A portion of NZS funding will continue to come from general revenues.
5. For an evaluation of the NZSF, see Littlewood (2005) and St. John (2001).
6. See Le and others (2007).
7. The 2003 report was produced by the Periodic Report Group, a panel of public- and private-sector experts that reviewed New Zealand's retirement income policy every 6 years. The review function was transferred to the Retirement Commissioner who presented her first report at the end of 2007. After that, the Commissioner is required to present a report every 3 years (Retirement Commission 2007a).
8. As of 2005, about 50 percent of the U.S. labor force participated in some type of employer-sponsored retirement plan (Costo 2006).
9. Unless otherwise noted, the source for the information on KiwiSaver in this section is http://www.kiwisaver.govt.nz.
10. This includes new entrants to the labor force and workers who are starting a new job.
11. For example, if the employer contributes 4 percent of the employee's earnings, the entire 4 percent is tax-exempt to the employer. If the employer and the employee each contribute 2 percent of the employee's earnings, the employer's 2 percent contribution was tax-exempt. Employers pay a special tax called specified superannuation contribution withholding tax (SSCWT) on the rest of their contributions to an employee's account.
12. This measure was added in December 2007.
13. According to the law, the definition of serious illness is either permanently or totally disabled or near death.
14. Providers include banks, insurers, and management companies.
15. The Ministry of Economic Development has selected six default providers (New Zealand Government 2007).
16. Other functions of the Retirement Commission include collecting research on retirement planning behaviour and attitudes and providing information that aids development of national policies impacting on retirement. For more information go to http://www.retirement.org.nz/retirement_commission_home.html.
17. In New Zealand, investment earnings are taxed.
18. Close to 20 percent of these workers are younger than age 25 and more than half are younger than age 45.
Costo, Stephanie. 2006. Trends in retirement plan coverage over the last decade. Monthly Labor Review 129(2): 58–64.
Cullen, Michael. 2007a. "Reserve Bank highlights savings problem." Speech (March 8). http://www.beehive.govt.nz.
———. 2007b. "Government dealing with savings challenge." Speech (March 16). http://www.beehive.govt.nz.
———. 2007c. "Budget 2007." Speech (May 17). http://www.beehive.govt.nz.
Feslier, David. 2006. Financial education and financial literacy in New Zealand (September). http://www.oecd.org/dataoecd/15/53/37424633.pdf.
Hosking, Rob. 2007. Proof that Cullen's savings 'problem' is exaggerated. National Business Review (March 23). http://global.factiva.com.
[IBIS] International Benefits Information Service. 2004. New Zealand: Private retirement savings working group (June).
Le, Trinh, Grant Scobie, and John Gibson. 2007. Are Kiwis saving enough for retirement? Preliminary evidence from SOFIE. New Zealand Treasury. Paper prepared for the 8th Annual SuperFunds Summit, Wellington (March 15–16).
Littlewood, Michael. 2005. "New Zealand: Prefunding Tier 1 pensions—lessons from New Zealand." Second International Workshop on the Balance Sheet of Social Security Pensions. Tokyo, Japan (December 15).
[Labour]. New Zealand Department of Labour. 2007. Older people in work: Key trends and patterns, 1991–2005 (February).
New Zealand Government. 2007. KiwiSaver Web site. http://www.kiwisaver.govt.nz.
[Tax Policy] New Zealand Inland Revenue Policy Advice Division. 2007. Urgent legislation enacted (May 22). http://www.taxpolicy.ird.govt.nz.
[MED] New Zealand Ministry of Economic Development, Insurance and Superannuation Unit. 2006. Report of the government actuary for the year ended 30 June.
[MSD] New Zealand Ministry of Social Development. 2007. Older people's policy office. Personal communication (February).
New Zealand Superannuation Act 2001. Public Act 2001. No. 84. http://executive.govt.nz
[NZSF] New Zealand Superannuation Fund. 2006. Annual Report. http://www.nzsuperfund.co.nz/.
———. 2007. http://www.nzsuperfund.co.nz/.
[Treasury] New Zealand Treasury. 2006. New Zealand Superannuation Fund contribution rate model: Half-year economic and fiscal update 2006 (December 19).
———. 2007. Budget 2007. Savers Fact Sheet (May). http://www.treasury.govt.nz/budget/2007/kiwisaver/pdfs/b07-ks-savers-fact-v2.pdf.
Retirement Commission. 2007a. Public information Web site. http://www.sorted.org.nz.
———. 2007b. Policy initiatives. http://www.retirement.org.nz/policy_initiatives.html#kiwi.
———. 2007c. 2007 Review of Retirement Income Policy. http://www.retirement.org.nz
St. John, Susan. 2001. New Zealand goes it alone in superannuation policy. Paper presented at the 9th Annual Colloquium of Superannuation Researchers. University of New South Wales (July 9–10).
St. John, Susan, and Michael Littlewood. 2006a. Submission on the KiwiSaver bill. Paper presented at Parliament's Select Committee Hearing (May 3).
———. 2006b. Does KiwiSaver improve the unique New Zealand mix of retirement policies? Paper presented at the 14th Australian Colloquium of Superannuation Researchers: Choice of Retirement Funding, UNSW, Sydney (July 20–21).
[Statistics] Statistics New Zealand. 2004. National population projections (December). http://www.stats.govt.nz/store/2006/07/national-population-projections-04%28base%29-51-mr.htm.
———. 2006. Demographic aspects of New Zealand's ageing population (March).
———. 2007. New Zealand income survey (June).
Toder, Eric, and Strachey Khitatrakun. 2006. Final report to inland revenue: KiwiSaver evaluation literature review. Tax Policy Center (December 4).
[SSA] U.S. Social Security Administration. 2007. Social Security Programs throughout the World: Asia and the Pacific, 2006 (March).


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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Economists have warned the Australian economy could hit a bump if there is no continuing federal government support when stimulus measures come to an end in March.
The government is adamant that both the JobKeeper wage subsidy and the JobSeeker coronavirus supplement will finish as planned, but is yet to confirm what, if anything, will replace them.
Prime Minister Scott Morrison has said crisis settings are only relevant to an economy in crisis.
But independent economist Nicki Hutley says while Australia might have got through the worst economic impacts of the pandemic, there are lingering issues to come.
"We are possibly focusing a little too much on the silver lining and perhaps ignoring the still large cloud that hangs over the economy," she told the Committee for Economic Development of Australia.
"The idea that we can sail through the end of JobKeeper and the JobSeeker supplement without any impact on the economy is very naive."
CEDA chief executive Melinda Cilento said the government should not be afraid to provide continued backing to the hardest-hit industries and individuals to support jobs and incomes, ensuring the recovery is not derailed.
National Australia Bank chief economist Alan Oster agreed there will have to be additional support when JobKeeper is withdrawn.
"It's a great snap back, the damage that was done to Australia's economy was much less than we all feared," he told the conference.
"The big issue … is having saved the economy is to now make it grow even faster."
Mr Oster said there wasn't an economist in the country who wants to see JobSeeker return to $40 a day when the coronavirus supplement ends, back to levels when the dole benefit was called Newstart.
Ms Hutley said the coronavirus supplement helped to reduce inequality and that the money was directly spent, supporting the economic recovery.
"We saw tremendous benefits to so many families and individuals who could afford three square meals … decent health care and shoes for their kids," she said.
"If you take that away, we are going to see a huge number of people back into significant disadvantage."
Catholic Social Services Australia chief executive Ursula Stephens said failure to retain the higher JobSeeker rate will create financial pressure on families that could last generations.
Ms Stephens said there was clear evidence the original rate of JobSeeker was a barrier to work.
"Constantly struggling to pay rent and buy food, let alone health or dental care, makes it hard to look for and interview well for a job," she said.
"An inadequate unemployment payment, combined with an incredibly tough full-time job market, will see many families and young people face a prolonged period of poverty."

subset: commoncrawl


text:
For Korean cinema, 2019 was a year that saw the continuation of trends that have been readily apparent for the past several years – an increasing number of big blockbuster/commercially-orientated films with high production values, and the decreasing quality of creative, engaging, and memorable stories.
That is not to say the talent has disappeared of course. There are a plethora of wildly talented filmmakers in both the mainstream and independent film realms in Korea, but clearly the focus on producing commercialised products over allowing such creators to express their voices is coming at a cost. This appears to be something that mainstream audiences are becoming increasingly aware of judging by box office numbers, and it was touch-and-go as to whether Korean films would surpass foreign films this year in terms of market share, a feat that was ultimately achieved via the releases of Ashfall (백두산), Forbidden Dream (천문:하늘에 묻는다) and Start-up (시동) in December.
The big news of the year came from one of the few filmmakers impervious to such issues, as director Bong Joon-ho's Parasite (기생충) not only won the Palme d'Or at Cannes but also became an international phenomenon. With critics worldwide championing the black-comedy drama, Parasite is sure to continue gathering nominations and awards for quite some time. Ironically the film proved somewhat divisive among local audiences as while Parasite was certainly an acclaimed commercial hit, certain sections felt uncomfortable and ashamed that the wealth gap in Korea was garnering so much international attention, much like with director Hirokazu Kore-eda's Shoplifters in Japan last year. That said, look for Parasite to break even more ground in 2020 and set new records for Korean cinema.
The year's other big film story was the furore surrounding feminist film Kim Ji-young, Born in 1982 (82년생 김지영). Bizarrely feeling that their masculine identity were somehow under threat due to the release, misogynists crawled out of the woodwork to enact 'ratings terror' which involved angrily bashing the film online. Audiences didn't listen, and Kim Ji-young went on to become one of the most financially successful films of the year as well as sparking further debates about women's rights in contemporary Korea. Interestingly the misogynists seemed largely oblivious to the array of other feminist-orientated films that were released throughout the year, from indie darling House of Hummingbird (벌새), mainstream action comedy Miss and Mrs. Cops (걸캅스), to queer story Moonlit Winter (윤희에게) among others, which speaks volumes.
Here is the top 10, with the number 1 spot likely coming as no surprise. Here's hoping that 2020 is a return to form for K-cinema~
1 – Parasite (기생충)
A wonderfully dark comedic takedown of capitalism and wealth disparity, Parasite is not only the best Korean film of 2019 but also one of the best international releases. The cinematography is exquisite throughout, accompanied by an incredible ensemble cast and a thrilling story that highlights the horrors of capitalism in an altogether different manner from the other works in his filmography. 2020 is undoubtedly going to see Parasite honoured further on the international stage, with a black and white version soon to be released and attention so great that retrospectives on director Bong Joon-ho's filmography are already being scheduled. Be sure to catch it on the big screen if you haven't already.
2 – Way Back Home (비밀의 정원)
Quietly premiering at Busan Film Festival, Way Back Home is arguably the most sincere Korean film of 2019 and an impressive debut by director Park Sunjoo (박선주). The story focuses on a woman who receives a phone call from the police letting her know that the man who assaulted her 10 years prior has been caught, bringing up painful memories she had sought to suppress. It's a challenging role and one that actress Han Wooyun (한우연) makes her own, expressing years of hidden pain through subtle glances, far away stares, and palpable frustration at the world. Thought-provoking and poignant, Way Back Home is the hidden gem of K-cinema in 2019.
3 – Move the Grave (이장)
Move the Grave is delightful drama from director Jeong Seung-o (정승오), that follows a family as they're forced to come together and agree on the details in moving their father's grave due to redeveloped. The conflicts that arise between the sisters – each of whom embodies different problems modern Korean women face – their loser brother, and their fiercely patriarchal uncle convey a wealth of feminist and familial issues that convey how frustrating, and often how funny, such clashes are.
4 – Kim Ji-young, Born in 1982 (82년생 김지영)
Adapting the best-selling book, which charts the sexism Kim Ji-young experiences throughout her entire lifetime, into a commercial film is not an easy feat yet debut director/writer Kim Do-young (김도영) does an admirable job. While other films exploring women's lives had inequality and rights issues as part of the narrative, in Kim Ji-young such issues are the narrative and this where the story contains power and relevance as it forces focus back onto female protagonists after years of being largely written out of the mainstream.
5 – Innocent Witness (증인)
Director Lee Han (이한) has proven his abilities on powerful dramas including Thread of Lies and does it again with Innocent Witness, a courtroom mystery-drama where the one key witness to a murder has autism. Actor Jung Woo-song is as charismatic as ever as the conflicted prosector, while Kim Hyang-gi excels in playing the autistic witness and has been shockingly overlooked for awards nominations. Innocent Witness is also quite progressive in the representation of modern relationships especially when compared to other K-films. A charming, heart-warming drama.
6 – Moonlit Winter (윤희에게)
Closing the Busan Film Festival this year was Moonlit Winter, the latest from Merry Christmas Mr. Mo director, Lim Dae-hyung (임대형). Actress Kim Hee-ae is establishing herself as one a particularly versatile performer, following up her excellent turn in Herstory with portraying lovelorn single mother Eun-hee who holds a deep secret. Locations in Korea and Hokkaido are wonderfully used to express loneliness as well as romance, while the supporting cast who help Eun-hee escape her sadness are especially endearing.
7 – Birthday (생일)
Honouring the victims and families of the Sewol disaster is a challenging prospect, and writer/director Lee Jong-un sensitively approaches the subject by focusing on the community gathering to celebrate a victim's birthday. With actors Jeon Do-yeon and Sol Kyung-gu onboard as the victim's estranged parents the performances are, of course, especially high although it's their daughter played by youngster Kim Bo-min who often steals the screen with her natural charm. Thankfully avoiding melodrama, Birthday is an especially emotional film. Prepare tissues in advance.
8 – The Breathing of the Fire (불숨)
Building on her previous wonderful documentary Breathing Underwater, director Koh Heeyoung returns with The Breathing of the Fire. The film was part of the 2019 Jeonju Cinema Project, and follows an elderly potter who has spent much of his life attempting to craft the perfect bowl with techniques that have been passed down for generations, crafting raging fires in which to create a masterpiece. A fascinating insight into a dying cultural tradition.
9 – Shades of the Heart (아무도 없는 곳)
The latest from director Kim Jong-kwan (김종관) is also a Jeonju Cinema Project, and highlights once again that he is master of filming simple conversations in a manner that is captivating and thought-provoking. Shades of the Heart follows writer Chang-seok who returns to Seoul after his marriage falls apart, meeting a variety of interesting characters on his journey of self-discovery. What is left un-said is often as powerful as the dialogue itself.
10 – Rivercide: The Secret Six (삽질)
Independent Korean documentaries have rapidly evolved over the past few years, and the investigative journalism that has been applied in crafting Rivercide is testament to such efforts. The film examines the controversial subject of the four rivers project, using years of footage and investigation in their attempts to expose governmental corruption and the pollution of Korea's rivers. Tensions around this film have been so high that at the Q&A for Riverside the filmmakers revealed they have received death threats, emphasising even more how such documentaries are vital.
Top 10 Korean Films of 2018 / Top 10 Korean Films of 2017
Top 10 Korean Films of 2016 / Top 10 Korean Films of 2015