View Single Post
Old 04-28-2015, 01:10 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 86,078
Blog Entries: 6


The age pension is about $20,000 a year; hardly a lavish income. Yet if you believe Tony Abbott and Scott Morrison’s rhetoric you’d think pensioners are bankrupting Australia. This is simply untrue.

Let’s look at the facts. Even the Treasurer’s Intergenerational Report shows the age pension, exactly as it is without changes, will account for just 3.6 per cent of gross domestic product by 2054-55. Whichever way you look at it, Australia spends a relatively small proportion of our GDP on the pension.

Public spending on old-age benefits (age pension and veterans pensions) across the OECD already averages 7.8 per cent of GDP. Public spending on these payments is highest — greater than 10 per cent of GDP — in Austria, France, Germany, Italy and Japan. The US and Britain devote 6.8 per cent and 6.2 per cent of GDP respectively to spending on pensions. In New Zealand public spending on these payments is 4.7 per cent of GDP.

When Morrison says the age pension is not sustainable, he’s wrong — it is. The Allianz Pension Sustainability Index last year found Australia has the most sustainable pension system in the world. Allianz, one of the world’s largest asset management companies, measures the pressure on governments across the globe to reform their pension system.

The Australian Council of Social Service estimates this will result in an $80 a week cut to pensions across the next decade. It will break a decades-old bipartisan commitment to link pension indexation to wages growth.

If Abbott gets his way, the pension will drop from 28 per cent of average weekly earnings today to just 16 per cent by 2055. Changing the indexation system is the least equitable way to address the sustainability of our retirement income system. As COTA’s chief executive Ian Yates says: “Full pensioners would be living well below the poverty line.” Does anyone seriously believe pushing pensioners into *poverty and hardship is good public policy?

Of course ensuring the sustainability of our retirement income system is important, but it needs to be done in a fair and equitable way. Labor knows this; that’s why we introduced compulsory superannuation. Our universal super system will continue to take pressure off the age pension. The maturing of our super system will result in a decline in the proportion of people of age pension age claiming the full rate age pension. By 2047, the proportion of Australians receiving a full pension will fall from about 50 per cent to 30 per cent.

And Labor is continuing to make decisions to ensure the integrity of the pension and superannuation system is maintained. The recent superannuation proposals Labor has announced are all about putting fairness back into the system — they are fair and they’re good for the budget.


LinkedIn Profile
Reply With Quote
Page generated in 0.22365 seconds with 9 queries