Election 2016 and retirement

Can politicians ever really understand the challenges of retirement? The short answer is ‘no’. There are two insurmountable barriers preventing them.

First up, because of the nature of their roles and responsibilities, they are working full time. They also earn high salaries; almost three times as much as the median income of other working Australians ($67,000), that is, those who are lucky enough to have full-time employment. The base salary of a back bencher is $199,040 per annum.

On top are perks that include commonwealth cars, telephone expenses and family travel.

These entitlements are generous relative to those received by the majority of Australian workers. In addition, the Canberra live-away from home allowance of $273 per night can be double-dipped when used to pay off a negatively-geared Canberra property, as witness the use of this system by former Treasurer Joe Hockey who paid his wife who owned the property. Compare this to the rising number of homeless retirees who have no secure place to sleep either ‘at home’ or in Canberra, and the contrast is stark. Living at the taxpayer’s expense in Canberra is no preparation for understanding most other workers’ realities.

The second barrier to the ability of our politicians to understand the reduced circumstances of a majority of Australian retirees is that the public pension they are guaranteed to receive upon retirement offers two things most retirees will never have – generous and secure retirement income.

Let’s deal with the obvious aspect of generosity first.

According to the Association of Super Funds Australia (ASFA), the average superannuation balance at retirement is $292,000 for men and $138,000 for women. Compare this to a recent federal politician’s payout which saw Bronwyn Bishop retire on $255,000 per annum, for life, and you can’t help but notice the gap. The rules applying to politicians’ pensions have been tightened, for sure – but given their high base salaries, they will still benefit from a payout that others can only dream of.

In fact, our federal pollies are so far ahead of the pack, they can have no idea whatsoever what it would be like to live on a full Age Pension of $20,000 per year, when even a bunch of roses for a friend’s birthday places an unbearable strain on your ability to cover food and household utilities and still live within your means.

The security aspect of the parliamentary pension, however, is even more discriminatory. YourLifeChoices has regularly noted the slow but inexorable shift of the risk of retirement from the state to the individual. Snip, snip, snip at who can access a pension. Fiddle, fiddle, fiddle with the rules of superannuation. This means many entering retirement are precariously balanced on the edge of a possible entitlement. ‘Will I or won’t I get an Age Pension?’ is the big question for 70 per cent of baby boomers as they head toward retirement. Whether the answer is a ‘yes’ or a ‘no’ today, it may all change tomorrow as successive governments, hell-bent on reducing deficits, move the goal posts again and again, usually without warning and sometimes even retrospectively.

So how can a politician who has a cast-iron guarantee of a secure and comfortable income in retirement ever possibly understand the single greatest challenge for most retirees – living on an income that often doesn’t cover basic household needs?

They can’t.

And that inability to understand translates directly into a lack of empathy. It is actually not their fault if this lack of understanding makes them ignorant. It is up to all of us to help them to see how things work. If retirees want a better deal from the next federal government, it’s time for all retirees to help our pollies ‘walk a mile in their shoes’, Election 2016 is your chance to stand up and be heard. Are you up for it?

What do you think? Can our politicians every really understand the challenges of living on a budget in retirement? If not, how can we help to enlighten them?

Written by Kaye Fallick