Retirement incomes review needed
A new report supports calls for the federal government to prepare a comprehensive review evaluating pension, superannuation, taxation and mature workforce issues.
A new report supports calls for Prime Minister Tony Abbott and his government to prepare a comprehensive review evaluating pension, superannuation, taxation and mature workforce issues.
Ian Yates, chief executive of seniors advocate COTA Australia, says current policies are inequitable and made worse by the measures announced in the May Budget, which may mean wealthy Australians will benefit in their retirement at the expense of age pensioners and low income earners.
The latest report in Per Capita's Longevity and Positive Ageing project states:
“The risk to Australia's future is not that too much public money is spent on the age pension; Australia has one of the lowest age pension spends in the OECD. Instead, the pensions and superannuation system has become skewed towards the interests of wealthier Australians and is funding short term consumption rather than meeting long term need.”
Mr Yates says the Per Capita report also rejected the government's proposal, in Bills already passed by the House of Representatives, to change pension indexation from the current arrangements to Consumer Price Index (CPI) only.
This change alone will mean a big cut to the pension over time and, as Per Capita notes, possibly more older people will slide into poverty, Mr Yates says.
“We welcome Per Capita's input into the debate on how Australia can better plan for the ageing population. Only recently, COTA Australia launched ‘Hands Off the Pension' campaign calling on the Treasurer to drop harsh changes to the age pension, now before the Senate and have a proper, independent review,” he adds.
The report, according to Mr Yates, confirms that expecting pensioners to carry the Budget savings load is grossly unfair given the high superannuation tax concessions which are showered on wealthy Australians.
“The Prime Minister says pensioners are a patriotic lot who will be happy to carry their fair share for the good of Australia. However, older Australians know they are being asked not to carry their fair share, which they would willingly do, but to carry a far greater share than they should, given their low incomes while people on high incomes get tax benefits far in excess of the pension,” Mr Yates says.
An inequitable retirement income system is not sustainable, will never have stability and is bad for the economy, he adds.
“Again, COTA calls for a comprehensive independent Retirement Incomes Review which pulls together all the relevant stakeholders to review pension, superannuation, taxation and mature workforce issues and come up with a more equitable and sustainable approach to how we manage retirement incomes.”
Find out more about Per Capita's Longevity and Positive Ageing project.
