Tax breaks for older workers

Older workers could receive tax breaks for remaining in the workforce while all Australians face tax rises, if Treasury head, Ken Henry’s taxation review’s recommendations – now with the Treasurer, Wayne Swan – are accepted.

The Australian newspaper reported today that Dr Henry told a tax conference that cutting taxes would make a bigger difference to the number of older workers deciding to remain in the workforce than it would for people of prime working age who would stay working anyway.

Lowering the marginal tax rates would make it easier for older workers  to work while receiving the age pension or by extending measures such as the mature-age tax offset offered to people 55 and over.

Tax incentives welcomed by NSA

National Seniors Australia (NSA) has welcomed a proposal for tax concessions to encourage older workers into the workforce but warned that a more comprehensive package of measures was necessary to improve participation by older Australians.

NSA also expressed caution about the use of generational cost comparisons to justify policy responses, stressing the need to better recognise the economic, social and community contributions of older Australians.

Responding to a speech by Treasury Secretary, Dr Ken Henry, where he flagged possible tax breaks for older workers to keep them in the workforce, NSA chief executive, Michael O’Neill, said any move to encourage mature workers to stay in the workforce was welcome.

“Dr Henry’s suggestion of having lower marginal tax breaks for certain groups such as older workers is a positive,’’ Mr O’Neill said.

“However NSA believes such a proposal should be part of a package of responses to deal with the issue of increasing participation.

“Other moves which are needed include providing employers with incentives to retain and hire older workers and providing targeted assistance for mature-age jobseekers, such as training and re-skilling services and programs.

“Increasing mature age participation in the workforce is one of the keys to tackling the challenges of an ageing population. It is heartening that the Government and now the Secretary of the Treasury have begun to propose responses.

“It will take a combined effort by the Government, employers, trade unions, employees and the community generally to realise the potential of older workers who want to work.”

Mr O’Neill added that the ageing population should not be regarded as a drain on society; instead Australia should better recognise the contribution older Australians make.

“Older Australians working full-time make an economic contribution of $59.6 billion a year to Australian Gross Domestic Product and older Australians contribute $4.8 billion alone in unpaid child care and help to people with a disability.”

NSA’s Still Putting In report revealed the Australian economy already loses $10.8 billion a year by not using the skills and experience of older Australians who want to work.