Age Pension, super and tax reforms sought in policy overhaul

A new report from public policy think tank the Grattan Institute makes scathing criticisms of government policies across a number of areas, including aged care and retirement income, and calls for bold policy reforms.

In its latest Orange Book, the Grattan Institute outlines a policy blueprint to reignite wages growth and boost living standards. The report calls for major tax reform – including an increase to and/or broadening of the GST – and winding back of tax concessions to fund income tax cuts.

It also advocates Age Pension changes, lower patient payments to medical specialists and dentists, higher-density housing in the major capital cities, JobSeeker increases, stronger climate change policies and what it describes as a “Commonwealth Integrity Commission with teeth”.

Read: Rising inflation biggest threat to retirement income and quality

Danielle Wood, Grattan Institute CEO and the report’s lead author, describes the Orange Book as the institute’s equivalent to the Blue Book (for the Coalition) and Red Book (for Labor) that public service chiefs prepare for incoming governments. Orange Book 2022 sets out policy recommendations for whichever party wins the election.

The report focuses on 11 key areas, including economic policy, health, climate change, transport, aged care and retirement income.

In the area of aged care, the report pulls no punches. It says wait times are long, people don’t get the care they need, care has often been of poor quality, and the workforce has faced challenges.

Read: Retirees left out of government’s retirement income rescue plan

While the report acknowledges the government has made a significant investment following the aged care royal commission, it says there are still some items on the ‘to-do’ list.

Recommendations include:

  • establishing new independent bodies to act as regional ‘system managers’ of the local service system
  • implementing a new public reporting system that provides information on the quality and prices of service providers
  • ensuring better training and regulation of aged care staff.

Read: Politician wants to halt fact-checking during election campaign

On the retirement income front, the Orange Book has plenty to say. It acknowledges that retirement incomes are adequate and Age Pension spending is sustainable, but says safety nets for early retirees are inadequate, super tax concessions are too high, super fees are too high and super balances are not converted into income.

It makes a raft of recommendations that include:

  • abandoning the legislated increases in compulsory super from 10 per cent to 12 per cent, or alternatively, permitting people to cash out any contributions beyond 9 per cent of wages
  • reducing the concessional contribution cap to $15,000 per year, and putting a lifetime cap of $250,000 on post-tax contributions
  • tax super earnings in retirement at 15 per cent, as applies before retirement
  • creating a ‘best in show’ shortlist of up to 10 funds
  • establishing an independent inquiry into default insurance in super
  • exploring how best to provide retirees with high-quality retirement income products.
  • raising the value of assets that do not reduce the Age Pension for homeowners to the same levels that apply to non-homeowners
  • tapering the Age Pension at $2.25/fortnight for each $1000 of assets, rather than $3
  • lowering the interest rate on the Home Equity Access Scheme and capping the interest rate for the life of the loan, or ring-fence a modest portion of home equity.

Orange Book 2022 acknowledges that no government could implement in a single term all the reforms recommended, but says if governments were to tackle a reasonable number of them over the next decade, it could transform Australia to a country with higher incomes, less poverty, better-quality and more efficiently delivered services, a liveable climate and stronger democratic institutions.

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Andrew Gigacz
Andrew Gigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.
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