Intergenerational inequality is growing larger by the day and things will only get worse unless action is taken, an ANZ Bank report says.

It says young people are disadvantaged by a trifecta of labour market conditions that favour older skilled workers, unaffordable housing and an ageing population, in addition to a climate change crisis, which would cost future generations in more ways than one.

ANZ senior economist and report author Miles Workman said the government could narrow the gap, but it would require transformational change, which would not be easy against the backdrop of an ongoing pandemic.

He said some of New Zealand's lost economic activity may never return and international tourism was unlikely to fully recover.

Reduced business investment would also keep New Zealand's capital stock on a lower-than-otherwise path.

"That means, in short, that we can't make as much stuff," he said.

"All else equal, a smaller capital stock implies a lower productive capacity, weaker economic activity, and lower incomes than otherwise."

He said there were no silver bullets to address the problems, although there were a number of things the government could do.

Among the suggestions were to build more houses, take steps to encourage investment, broaden the tax system to include a wealth tax and apply more scrutiny to government spending.

In addition, the report said New Zealand's pension plan needed attention.

"We urgently need to take a good hard look at superannuation settings to make them fairer," he said.

"It's more complicated than just increasing the eligibility age and/or means testing."

Text by Nona Pelletier for RNZ