22nd May 2018

How Australia would benefit from a universal pension

Making a universal pension work

Australia’s pension system has “many positive features” but it could be made fairer with the introduction of a universal age pension, according to a policy expert from Mercer.

Former Melbourne University academic David Knox, who is currently a senior partner at Mercer, believes the Danish pension system is among the best in the world in delivering more equitable outcomes.

In a paper presented to the Financial Services Forum on Monday, Mr Knox explained that under the Danish approach part of the public age pension is paid to everyone as taxable income with the balance paid on an income-tested basis.

He suggested this could take form as a universal pension equivalent to 10 per cent of the average wage, coupled with an income-tested pension that is equal to the balance at 17.6 per cent of the average wage.

 


“The universal pension would include provision of the health card, thereby removing the current incentive for many retirees to deliberately rearrange their affairs to receive a part pension and therefore the health card,” Mr Knox explained. “Such an outcome would encourage all retirees to maximise their assets and income.

“The introduction of the universal pension would improve the retirement income for the average income earner but would have a reduced effect at higher incomes as it would represent a fixed payment in dollar terms.”

Mr Knox explained that while the change would represent an extra expense for the Government because of the increased numbers of part pensioners, it could be offset by additional income tax from those with higher taxable incomes.

If a universal age pension system was adopted in Australia, Mr Knox said that he saw no reason to change the planned increase of the Superannuation Guarantee to 12 per cent.

Under this strategy, full pensioners would not be affected.

What do you think of the proposal of a universal age pension? Would you support the change?


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COMMENTS

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tisme
23rd May 2018
10:10am
similar to the system in England --NHS n such
MICK
23rd May 2018
2:05pm
The system has 'ACADEMIC' written all over it. Seriously.
The underlying assumption is fairness. End of argument!
Adrianus
24th May 2018
9:40am
In what way is it similar?
In what way does it have "ACADEMIC" written all over it?
In What way is it Fair?

Let's test the fairness. Why not ask our young workers how they feel about paying triple the tax they currently pay? Let's see how they like a 60% tax rate?
OnlyGenuineRainey
24th May 2018
1:42pm
Why not stop spending bucket-loads on obscene tax concessions to the rich and letting companies escape with paying $0 and instead pump some money into the economy to stimulate growth and jobs and revenue by giving a little more to those who will SPEND it?

Common sense has been overcome by GREED, Adrianus. Feast on it, because your day will come.
Old Geezer
25th May 2018
3:16pm
Companies pay zero tax because our company tax rates are way to high. Halve them to 15% and we wold have more revenue than we need. That is where we are greedy. We simply charge too much tax.
Retired Knowall
26th May 2018
10:36am
Wrong OG, the Headline Tax may be 30% but no Company is paying that rate. With all the tax rebates and concessions available in the tax system the nominal tax rate is actually 14%. Quite a few companies pay 0 tax due to our loose tax rules. Same applies to the wealthy 1% that reduce their tax to 0 by using the loopholes.
By all means reduce the Tax Rate to 15%, BUT, close all loopholes to ensure all pay that rate.
TREBOR
23rd May 2018
10:11am
He's on the right track - but his figures are too low in the current market for costs of living.

It's a start.
George
23rd May 2018
11:26am
Yes, he is on the right track, and all retirees should support such thinking for Universal Pension - although his figures are not that great (overall 27.6% of Average Wage, subject to 17.6% Income-tested, is low), it does have 2 key advantages:
a. No Centrelink admin needed, as Income can be assessed by the ATO (will they allow Deductions before arriving at INCOME - of so, how much scope for rorts?), with pension paid directly by ATO, and
b. No foolish Asset or Partner tests - again No Centrelink harassment.

I would prefer Universal Pension without ANY tests, and adjustment of tax rules to make either the full pension (if eligible for pension) or else the minimum tax bracket as tax free, and tax all above that. We also need to have a cap on Super income being tax free for retirees, as that is a vehicle specifically set up for people to save long term for their retirement needs, e.g. health, holidays, other (house maint), and any other sudden expenses.

Also, he hasn't mentioned how funding can be assured, otherwise other lazy anti-people experts / politicians will shoot the idea down.
They need to expand the Future Fund to gradually divert the full 7.5% tax being collected for pensions to get investment returns as originally intended. Also, they need to seriously consider Minimum Taxation for large companies and rich individuals to ensure all pay fair and reasonable taxes.

So, overall, GREAT to hear an expert on the right track and suggesting Universal Pension. He needs to be encouraged by all.
almost a grey hair
23rd May 2018
1:08pm
great, have been saying it all along - no asset tests, I will now strive to seek employment for the next 4 yrs instead of spending to get under the line. Especially as there will now be some incentive.
Also half of centrelink can now go and play golf or go fishing or seek employment they will actually like. All those massive commercial buildings they inhabit can go on the market and they can operate from a pop up in the local mall. Ah well there goes the cruise round the world on the three queens
OnlyGenuineRainey
24th May 2018
7:55am
George, funding is easy. Economists have repeatedly pointed out that the superannuation tax concession system is costing far more than the OAP, and 80% of the benefit goes to people who will never need help to fund their retirement. Fix that and cost problem solved!

All that needs to be done is change the 15% concessional rate to 15% below the individual's marginal tax rate - and have the ATO pay into the individual's fund if the result is less than $0. There is still a huge incentive to invest in super, but lower income earners get equal benefit (currently they get little or none!) and there are massive savings at the higher end that fund pensions. Everyone wins because those who don't get quite as much obscene benefit while working still get the OAP on retirement. Because the lower paid get more help to save for retirement, over time the majority are better off in retirement and that can only drive a healthier economy and a healthier society.
Old Geezer
25th May 2018
3:20pm
Without concessions nobody would use super as it is simply stupid tying up one's money for decades without any benefit for doing so. Super is just an investment with tax advantages for not spending your money until retirement. No incentive then why have super? I'd be getting it out as fast as I could if they took away the incentives. In fact super is only marginal with the refund of ranking credits so once they are gone super will cost more than having the money invested outside super.
OnlyGenuineRainey
26th May 2018
12:44pm
Again you get it wrong, OG (deliberately, I suspect!)

I never said ''no concessions''. The incentive still exists. It just isn't obscenely and excessively generous to the rich and mean and useless to the battlers. Instead, IT'S FAIR TO ALL. And still a very good incentive, even for high income earners.

NEVER EVER EVER SUGGESTED TAKING AWAY THE INCENTIVE

Learn to read before making a fool of yourself.
TREBOR
23rd May 2018
10:19am
A Universal Pension needs to be adequate to meet the needs, with a little extra for 'emotional' needs like a beer or a flutter etc and the opportunity to have a coffee with friends etc... so at the present time his figures are too low.

He also needs to carefully lay out exactly what the tax incentives are for government to go down this path, and in that area he could benefit from a full reading of YLC comments over the past few months on that very issue.

IF the concept is to tax ALL income over and above, and all fringe benefits without concession, and all gifting that substitutes for income/expenditure - as outlined times many -at the going rate for income tax - many would be better off at the lower end, while those who've enjoyed a fat enough run to accumulate a heap would pay the taxes they not paid along the way.

In this day and age - there is ZERO reason for concessions on any business venture or savings scheme, and if you get a concession along the way, there is zero justification for further concession in retirement, such as occurs with superannuation at this time, and which benefits primarily those with much more than necessary.

One rule for all, including that if you want to play business, you don't get the taxpayer to support you, other than by purchasing your product. No CGT, no tax dodges.... you play the game by the same rules as Joe Bloggs the worker or you don't play.
George
23rd May 2018
11:33am
Yes, your ideas above indicate the complexities with testing even Income.
The best option is to not have ANY tests (other than Age and Residency), with the ATO strengthened to seriously stop tax evasion by crooked accountants claiming nonsensical deductions - possibly with a Minimum Tax for both companies and individuals above a certain level of Gross Income (to avoid hitting too hard at low levels).
George
23rd May 2018
11:46am
One rule for all, YES - with Politicians Special Pensions to be SCRAPPED. Then, they can also be eligible under the same rules - and we may have less tinkering of the system by them to attack other people!
jaycee1
23rd May 2018
1:17pm
I agree George,
If the politicians had to, shock horror, wait like the rest of us to get their pensions AND only received what we do as well there would be less tinkering of the system.
In fact, I could guarantee that the pension would suddenly rise by at least half what it is now, as it would be a shock to their systems trying to live on what most pensioners have to.
TREBOR
23rd May 2018
2:58pm
That was concessional capital gain... not CGT... sorry...
Spondonian
23rd May 2018
10:21am
This is a much fairer way to go . The savings in time and fees messing about all the time trying to balance incme and assets would be huge . Superanuation is the biggest con job done to the working man . You can work for 40 to 50 yrs and a stockmarket crash ca n leave you with nothing yet over the years the government has extracted their taxes and the funds their fees . Should be law that any fund should have to guarantee a pension equal to or more than government pension at the end of the day .
Hasbeen
23rd May 2018
2:10pm
This was a wonderful idea for the Danes, before BREXIT. The poms are subsidising all these lovely perks for the EU. After Brexit comes into force, such nice generous pension schemes will have to become a thing of the past, or the country will go broke funding it.

Really TREBOR, I can see no reason why my kids, struggling with their own mortgage, & kids costs should fund anyone's beer or betting funds. If they want a coffee at an expensive restaurant, perhaps they should eat sausages more often at home.
OnlyGenuineRainey
23rd May 2018
2:43pm
Hasbeen, if properly designed, a universal pension would be far cheaper than the current inefficient system. Firstly, all the absurdly high admin costs are eliminated - together with policing costs and the stress and health problems created by the current system. More to the point, though, incentive is restored. The current system is making people divest their wealth and try to be poorer, because they get more income with less savings. It's absurd and very expensive.

Correct design means taxing retirement incomes fairly, and also fixing the very unfair and unaffordable superannuation tax concession system that hands out far too much to high income earners and little to nothing to battlers. Abolish the 15% tax rate and instead tax super at 15% less than the individual's marginal rate, and if that results in a negative figure, pay into their fund. That would refocus assistance on those who need it most, which is how the system SHOULD work.

As for your kids funding anything... YES, they should fund a decent lifestyle for the aging. We did for older generations. I never heard anyone whinge about pensions back when they were far more generous and oldies were getting 16% bank interest, and we were crippled with 18%+++ mortgage rates. Your spoilt brats don't know how good they have it! And making our retirement conditions better will eventually benefit them in multiple ways - firstly through inheritance and secondly through a better system.

We need to restore incentive. Punishing people for working and saving is economically detrimental and socially insane! Only an idiot would support such a notion - but obviously we have lots of idiots in Parliament.
TREBOR
23rd May 2018
3:04pm
Your kids aren't funding anything, Hasbeen - pensioners have funded their retirement via taxation for fifty years and more.

You're just one of the crowd who refuse to understand how Social Security works here and has done for longer then my lifetime. Governments trying to move the goal posts and say it wasn't like that are liars, pure and simple, so don't be mislead.

I'm off for a beer now.... as an old Digger mate said to a young blade when the old mate went on TPI - "Keep working - I need the income!"

(falls about laughing).... now it's your kid's turn in the barrel that we were all in over a lifetime.... get used to it, get over it, and get on with it - on the side of the Angels.
Adrianus
23rd May 2018
4:15pm
Spondonian, what can be fair about having the highest employee tax rate in the world?
Triss
23rd May 2018
5:05pm
Hasbeen, maybe you're looking at it the wrong way round. What about your kids funding the salaries and pensions of a lot of government penpushers, penpushers who will retire at an earlier age than OAPs and at a higher pension. Get rid of that section of penpushers and the cost to taxpayers will be a lot less.
OnlyGenuineRainey
24th May 2018
8:01am
Adrianus, we don't have anywhere near the highest employee tax rate in the world, but the nation that does has the happiest people in the world. Strange, that! Maybe the obscene greed that perpetrates in our society is causing a lot of misery. Maybe if we could force the rich to pay their way, everything would be much better? Actually, that's NOT a maybe. I remember when taxes on high incomes were WAY WAY WAY higher than now, and everyone was a great deal happier and the economy was ticking along nicely. GREED has taken over and wrecked both the economy and the society.
Old Geezer
23rd May 2018
10:44am
10% of the average wage is hardly worth getting and after tax it is SBA.
Misty
23rd May 2018
2:24pm
For once I agree with you OG, but don't get used to it as it may never happen again.
TREBOR
23rd May 2018
3:05pm
Pay for a slice of toast a day.....
Triss
23rd May 2018
10:03pm
Providing you weren't pushy enough to want butter on it, Trebor.
almost a grey hair
23rd May 2018
11:09am
Another day another expert, think I'll go down the club for a $12 schnitty and a couple of schooners
Tygee
23rd May 2018
11:26am
Bring it on! Very fair, and would make everyone feel valued
George
23rd May 2018
11:36am
Yes, particularly benefits savers without penalising them.

A thousand times better than the current system with Centrelink hounding all, and brings us up into the civilised, advanced world status.
Misty
23rd May 2018
2:25pm
Does this mean Billioaires get the Unerversal Pension too?.
Misty
23rd May 2018
2:29pm
Excuse my spelling mistake, listening to Question Time in the Parliament and not paying attention to what I was typing.
OnlyGenuineRainey
23rd May 2018
2:53pm
Does it matter, Misty? How many billionaires are there in Australia who would qualify? And after tax, how much would they really get. Honestly, the meanest of some who happily take handouts from the public purse, thinking they have some sort of superior entitlement because they either didn't or couldn't save to fund their own retirement, is beyond disgusting.

We need a system that rewards people for striving and achieving instead of rewarding them for ending up with little or nothing. Support the needy, of course - hopefully better than we do now - but taking from achievers is only creating more needy. It's a dumb system.
Adrianus
23rd May 2018
4:18pm
Tygee, would it be fair to drop the corporate tax rate to 22%
TREBOR
23rd May 2018
6:47pm
Question time will do that to the mind, Misty... the billionaire would suddenly find that all the other retirement perks were up for tax... that's the clincher that so far these academics don't want to go near.

They get their pension, but all else is subject to normal income tax.

Rainey - on $37k now as an SFR, would receive pension and healthcare card and benefits from rego etc, and would not be liable for income tax until reaching the current tax free threshold = 19,200, after which up to $37k would be paying at 19c in the dollar on $18,800. That means Rainey would be better off, being at the lower end of the scale, by pension + about $15,800, giving a 'reward' for saving etc.

Could afford healthcare costs more...
OnlyGenuineRainey
23rd May 2018
8:09pm
Better than that actually, Trebor, thank you. $37,000 is currently shared between two of us, so with $19,200 EACH exempt from tax we'd be paying no tax at all. The current system is very unfair to couples in situations like ours. It makes me wonder why I ever bothered to work and pay tax and save. I keep working because (a) I love what I do - finally have a great job after 40 years of working in shit jobs for crap wages; and (b) I need the extra income to avoid eroding savings - though if I did erode my savings enough to get a part pension, I'd be $20,000 a year better off in income terms than I am now. How IDIOTIC is this system?
OnlyGenuineRainey
23rd May 2018
8:24pm
And to the fools who say ''just spend your capital'', of course I can. But that would be equivalent to going without a restaurant meal or a holiday and giving the money I saved to the taxman. There is ABSOLUTELY ZERO benefit in saving more than about $500,000 now (for a couple), so countless thousands who COULD be self-funded in retirement - at least for the early retirement years - will be manipulating to ensure they get a part pension. And not just for the concessions. With $500,000 I would have an income - with pension and investment income combined - of $60,000 a year to share with my partner - more than $20,000 a year more than I would have if I retired now as an SFR. So I draw $20,000 a year from capital to compensate for not getting a part pension, and effectively I am GIFTING my savings to the government and getting NOTHING in return.
Kathleen
25th May 2018
11:39pm
OGR, so people who fail to save for their retirement are beyond disgusting. And people are mean who question billionaires getting money they don’t need.
People who get pensions are actually taking ‘handouts’from the public purse.
Your response to Misty is nasty and deserves an apology.
OnlyGenuineRainey
26th May 2018
12:50pm
You twist my words again, Kathleen. I did NOT say people who fail to save for retirement are ''beyond disgusting''. I said people who think they have SUPERIOR ENTITLEMENT because they didn't save for retirement are beyond disgusting. Learn to read please before you attack me!

Yes, people who get pensions are taking handouts from the public purse. Of course they are. Nothing wrong with that if they genuinely need It. I support wholeheartedly giving a generous living allowance to those who cannot support themselves. What is WRONG is withholding that benefit from people as punishment for saving, while giving it to those who could have saved but didn't.

I doubt billionaires would even bother to take a universal pension, but if they did, good luck to them, as long as they pay their tax fairly. The point is that the current system is denying people who have very low incomes, for no better reason than that they tried hard to be independent in retirement. And that's WRONG.
Kathleen
28th May 2018
12:23am
OGR, are you a lady or a gentleman? Or do you take it in turns commenting on here. The latter would explain different views expressed as some inconsistencies seem to occur. Two voices but one name?
I assumed you were a gentleman from comments from a while back but you sound different lately.
Just curious?
CoogeeGuy
23rd May 2018
11:27am
I need more info, and possibly in dollar figures. What is the average wage in Australia. And what is 10% plus 17.5%? I know nothing about this 'Universal Aged Pension'. And what about the cost of living in Australia being much higher than that of the Danish? I suggest this is a throw away suggestion which contains no detail.
George
23rd May 2018
11:43am
ABS says current Average Wage (extrapolated from Average Weekly Earnings) is $81,754, although generally people / Govt assumes around $75,000 - take your pick. 10% + 17.6% = 27.6% of Average Wage - surely you can work that out now?

It is a GREAT suggestion, and finally something which is on the right track specially as it doesn't penalise savers or for assets which you have. Hope it's NOT a throw-away idea, and it is up to people to promote it as the current system is BROKEN.

Although you are right, we do need more information, especially about how Income would be determined? Also, any other qualifications, e.g. Age (65 or 67), Residency (how many years), hopefully no tests on whether you have a Partner or not?
Anonymous
23rd May 2018
12:31pm
CoogeeGuy, you have been down on the beach too long! Where do you get the idea that the cost of living is a lot less in Denmark than good ole Oz?? You obviously haven't travelled! But getting back to the proposal, I wonder whether they have death duties in Denmark, to claw back some of this universal pension from high net worth recipients? It would seem that this is the only way such a scheme could be workable in this country, as I can hear all the lefties screaming now about the extension of welfare to the so called upper class.
jaycee1
23rd May 2018
1:28pm
Big Al,
Denmark is one of the highest taxed countries [average of 55%] which they are happy to pay as they are looked after. [i.e. All education is free - even university. Health care is also free]
They know that when they retire they will get enough to live on without stressing about paying for things they need.

Regarding death duties:
NHERITANCE TAX
Denmark levies two taxes on inheritance: (1) estate duty and (2) inheritance tax.

In computing the taxable value of the estate, all liabilities of the deceased are deducted from the estate. The surviving spouse’s inheritance is not liable for any tax and such transfers are deducted from the estate. A basic allowance is also deductible and this allowance is regulated annually. The tax-exempt value of the estate is DKK282,600 (€37,984) for 2017.

Estate Tax
Estate duty is levied at a flat rate of 15% on the net value of the estate. The spouse of the deceased is not liable to this tax.

Inheritance Tax
Inheritance tax is an additional tax on the inheritance of people other than certain close relatives of the deceased. It is levied at a flat rate of 25% on the computed taxable inheritance less the estate duty liability. The spouse and certain close relatives (children/ stepchildren, and their descendants, spouses of children/ stepchildren, parents) are not subject to inheritance tax.

With the additional inheritance tax of 25% to be paid, the total tax on the estate will amount to 36.25%.
OnlyGenuineRainey
23rd May 2018
3:55pm
An excellent system, jaycee1. Why can't Australia copy a system that works for everyone, instead of the ''feed the greedy'' model followed in the USA? What's wrong with 55% tax if you have health care, education, and retirement covered by the state? The Danes are reputed to be among the happiest people in the world, so clearly the model is working well.
Old Geezer
23rd May 2018
3:57pm
OGR there wont be much left for your grandkids after all those taxes.
OnlyGenuineRainey
23rd May 2018
4:04pm
Rubbish, OG. There would be plenty left, since health care and education costs don't gobble up all your hard-earned money, and lots of other things are free or cheap. Housing is heavily subsidized as is electricity. If you can read, you see that inheritance tax doesn't apply to your children or grandchildren inheriting. The only people who would object to such a system are those who, like you, are rich and consumed with obscene greed.
Old Geezer
23rd May 2018
4:37pm
OGR I plan to spend everything before I die so I wont have a problem with my will or inheritance taxes.
OnlyGenuineRainey
23rd May 2018
8:37pm
It comes as no surprise that you don't care to leave your loved ones anything, OG.
Old Geezer
24th May 2018
3:42pm
Why would I OGR? They have more wealth than I ever will.
Not a Bludger
23rd May 2018
11:41am
Oh my giddy aunt - yet another Scandi-lover pretending that this would be an”extra expense for the government”.
NO - he means a huge extra tax on already overtaxed taxpayers.
I guess that he is on Shorten’s bandwagon of ripping even more money off retirees, amongst others.
OnlyGenuineRainey
23rd May 2018
4:06pm
Or maybe he's suggesting the well-off actually pay their way for a change, and we introduce some equity and social health into a society that has lost the plot feeding obscene greed.
HS
23rd May 2018
12:00pm
I'd only support it if the OAP would be the same as minimum weekly income after tax and includes an Assets Test for those with more than $1,000,000 in total assets including residential home. You can live out the rest of your life by cashing in on your residential home and either buying something cheaper in a regional city or just renting.
Knight Templar
23rd May 2018
12:18pm
That would rule out almost every retiree purchasing or owning a home with 15kms of Sydney's CBD.

Within 10-15 years almost every home in an Australian capital city will be valued at $1m + . Unless the rules are amended to allow for inflation, absolutely no one who is purchasing or owns a home will be eligible for a pension.
MD
23rd May 2018
12:33pm
"The universal pension would include provision of the health card, thereby removing the current incentive for many retirees to deliberately rearrange their affairs to receive a part pension and therefore the health card,” Mr Knox explained. “Such an outcome would encourage all retirees to maximise their assets and income".

Yeh some merit in your comment HS. The $1M limit would be bound to generate some shifty shonks to rearrange affairs to ensure they maximize a handout. Currently those having little to show for their efforts (or lack of) expect the max and squeal for more, those that have accumulated a comfy zone expect to be rewarded accordingly. The remainder rearrange to suit themselves and think 'bugger the rest' as long as I'm ok.
almost a grey hair
23rd May 2018
1:16pm
Why should a universal pension include provision of a health care card or cheaper power or water or rates or rego. How u spend your money is up to you. Somewhere down the line someone has to pay for these.. It just goes to show when you get to pension age your arms must shrink and your pockets grow longer so the bottom can't be reached. USER PAYS
OnlyGenuineRainey
23rd May 2018
3:00pm
What are you aiming at HS? Making it totally futile to work, save and live responsibly. Reward all the bludgers, cheats, manipulators, gamblers, party-goers, holidaymakers, and others who live it up and punish anyone who works and saves and buys a home. Yeah, smart! NOT. It's absolutely bloody IDIOTIC. You end up with nobody wanting to strive because there is simply no benefit.

$1 million including a home is SWEET BUGGER ALL in today's economy. Anyone who hasn't that much was either victim of very serious crisis, disability, crime or illness or - as in the vast majority of cases - totally bloody irresponsible in every way.

BTW. What about the fat cats who are collecting massive tax concessions on super they will never need? Do you expect them to hand their homes over on retirement as well?

Bugger off with your communist mentality. Take it to Russia or Communist China. We don't need people like you stuffing up Australia.
Sundays
23rd May 2018
8:52pm
So HS have I got it right? You want the OAP to be the same as the minimum wage, but only payable to those with no savings or assets. People who have paid off a home, now sell it to fund retirement while those who have spent all their money get a free ride. What is your rationale behind this thinking as it does not make any sense to me
niemakawa
23rd May 2018
9:14pm
The family home is sacrosanct. Neve, Never must it be included in any form of asset test.
HS
23rd May 2018
9:36pm
Sundays and the rest of you.
Get this: OAP is for the poor.
It is not a reward for all the hard work in the past nor for any sacrifices to pay off a home .
It is a 'Safety Net' for the poor.
If you have assets of $1million + including residential home, you are not poor. Cash in and live off that !!! Yes, you can!
Where?
Move to a country town or a regional city.
OAP was not designed for you to maintain your luxurious lifestyle. In fact, it was not designed for any luxury. It was designed to provide a basic cost of living to the poor.
niemakawa
23rd May 2018
9:41pm
HS and the rest of you who may agree with him/her/it

You are wrong. It is an entitlement for all age pensioners regardless of assets or income.
Triss
23rd May 2018
10:17pm
You're right, niemakawa, it's an entitlement, a "thank you" from pollies and bureaucrats for slogging your guts out paying for not only your own home but their homes as well, along with the lifetime indexed pensions and perks they gave themselves courtesy of the taxpayers.
niemakawa
23rd May 2018
10:34pm
HS you say the OAP is for the poor. Of all age pensioners what percentage would you include in this bracket?? I would suggest the real poor account for no more than 10%. Their are many age pensioners who claim to be poor through their own volition. Some would have earned large salaries, but never bothered to buy a house, instead spending their disposable income on frivolous activities. Surely old tax records should be available to Centrelink to establish why a person has very few if any assets. The Motor Registries also hold a lot of information on ownership of vehicles. I am not denying these people the right to spend as that is their choice. On the other hand many pensioners have been more thrifty in what they do with their income. They should not be penalised for doing so. Leave the family home out of the equation in any asset test. A universal pension is the only equitable way to solve the imbalances.
niemakawa
23rd May 2018
10:35pm
After 10% please read: There are .....
OnlyGenuineRainey
24th May 2018
7:50am
niemakawa, I agree with the sentence starting with ''Their are many age pensioners...'' but right up to '... ownership of vehicles'. The problem is that these records don't necessarily tell an accurate tale. Do they reflect a massive personal or family crisis that stripped someone who might have earned well for a time of most of their savings? Do they record the windfall inheritance the guy whose tax records show hardship enjoyed later in life?

I agree a universal pension is the only equitable way to solve imbalances, but I don't see how anyone can devise a reliable scheme to determine who SHOULD have had what and who spent more freely vs who saved well. I think the Universal pension has to just be universal, and all other income taxed. Let those who saved well enjoy the benefits of it, but make sure the UP rate - which should be the same for all - is enough to sustain a reasonable lifestyle. We CAN afford it. Just fixing the inequity in the superannuation tax concession alone would more than pay for it, AND would reduce future retirement needs as it would enable the less well off to have more savings instead of over-feeding the greedy rich. It really is very simple, if only GREED didn't drive the power-brokers.
George
23rd May 2018
12:00pm
Absolutely support going in that direction of Universal Pension - subject to qualifications I noted in my comment below. Hope Ben / YLC can somehow communicate to David Knox that a lot of retirees will support such fresh thinking and he MUST push his ideas strongly further with the Politicians / other industry experts, as the current system is BROKEN and highly unfair causing massive disincentives for savers.

In addition to removing massive Centrelink expenses, and harassment of pensioners, note the following comments.

I would prefer Universal Pension without ANY tests (other than Age - 65 years, and Residency - say 15 years), with adjustment of tax rules to make either the full pension (if eligible for pension) or else the minimum tax bracket as tax free, and tax all above that. However, we also need to allow a reasonable Cap on Super income being tax free for retirees, as that is a vehicle specifically set up for people to save long term to supplement their retirement needs, e.g. health, holidays, other (house maint), and any other sudden expenses.

Also, he hasn't mentioned how funding can be assured, otherwise other lazy anti-people experts / politicians will shoot the idea down. Note 2 key ideas as follows:
a. They need to expand the Future Fund to gradually divert the full 7.5% tax being collected for pensions to get investment returns as originally intended.
b. Also, they need to seriously consider Minimum Taxation for large companies and rich individuals to ensure all pay fair and reasonable taxes.
The above 2 measures will GUARANTEE there will be no future funding shortfalls!
jaycee1
23rd May 2018
1:43pm
George,
They set up a fund in the 1940's for the purpose of funding pensions [held separately from consolidated funding] - most of us over our working life paid into this fund. In fact all workers are still paying even though most don't know that.
It was transferred into consolidated funding and disappeared forever. They then decided to con everyone by telling them they had to put money into superannuation otherwise no pension would be available. The Future fund at one stage had $50 billion dollars in it before it too was raided.
Governments for years have been taking money from you twice for your pension.
It's rather like the 3 x 3 tax on fuel that was meant to be used to update the road. Only meant to be 3% tax on fuel that would last 3 years. It was originally extended to, I think, 9 years then it was quietly buried and we are still paying it - over 20 years later.

Trusting ANY government is the height of stupidity.
thommo
23rd May 2018
12:18pm
Our politicians are too scared to even think about such a sensible proposition. They are capable of lateral thinking..
MD
23rd May 2018
12:38pm
"They are capable of lateral thinking.."..interesting thommo - perhaps only after they've been laid out on a slab.
jaycee1
23rd May 2018
1:50pm
thommo,
Our governments will not think beyond the next election as they know that if they lose then the incoming party will take credit for anything, long term, that they have implemented.

If governments in the past had thought that way then we would never have seen things like the Snowy Mountains Hydro-Electric Scheme happen.
Things like that will never happen again - until all parties put the country before their egos!
niemakawa
23rd May 2018
1:55pm
Globalists Governments nor Parties will ever put their Country first. They want to showcase themselves on the World stage rather than support Australians. Lib/Lab/Greens(!!) all promote Globalists platforms.
KSS
23rd May 2018
1:03pm
So yesterday when another 'expert' suggested that the homeowner should be 'encouraged' to liquidate their asset, we have a great number of respondents agreeing - mainly because they rent and therefore any householder is clearly wealthy and deserves to be punished.

Today the family home looks safe and everyone gets a handout. And the majority like that.

Did you do the maths? 27.5% (the maximum possible under this proposal) would be in the region of $22000 a year (assuming an average wage of $80000 pa). Currently a single person (with energy supplement and max pension supplement) would get $23597. They would be worse off under this suggested solution!

A combined couple currently get $35573.20 and would be better off by about $8500. So we like that don't we?

Fine but what about the single person (divorced, widowed, never married etc etc) who will be worse off? That's OK right because it is 'fair'!

Oh and everyone gets a health card (or is that a 'sick' card?).
Old Geezer
23rd May 2018
1:09pm
Isn't the OAP already pegged at 27.6% of the average wage?

http://www.ncoa.gov.au/report/appendix-vol-1/9-1-age-pension.html

The maximum base rate is indexed every six months to the higher of growth in the CPI or the Pensioner and Beneficiary Living Cost Index (PBLCI). The PBLCI is similar to the CPI but adjusted for the basket of goods typically purchased by people on pensions or allowances. The maximum base rate of the pension is then ‘benchmarked’ to Male Total Average Weekly Earnings (MTAWE) – 27.7 per cent for the single rate – which is currently driving the indexation of the payment. The rates of the supplements are indexed to CPI only.
TREBOR
23rd May 2018
6:54pm
I don't recall many 'agreeing', KSS... the vast predominance was against the idea.

Are you playing politics of division here?

You can check for yourself if you like -

https://www.yourlifechoices.com.au/age-pension/pension-eligibility/assess-home-for-pension-expert?utm_medium=email&utm_campaign=volume%2018%20issue%20102%20daily%20enews%20tuesday%2022%20may&utm_content=volume%2018%20issue%20102%20daily%20enews%20tuesday%2022%20may+version+a+cid_e7765adfdd3aaa2e336358c76645c1ee&utm_source=campaign%20monitor&utm_term=include%20the%20family%20home#comment-604242#comment-604243#comment-604245#comment-604248#comment-604255#comment-604257#comment-604261#comment-604263#comment-604456#comment-604458#comment-604475#comment-604476

I'm about to slice and dice yet another of The Few who oppose the idea of NOT including the family home...

Never in the field of human conflict has so much been owed by so many to so Few....
maelcolium
23rd May 2018
1:08pm
10% of the average wage? Is this guy on Mars or somewhere? Oh, and it's taxable as well!

Sometimes I think these pseudo academics dream this crap up when they are attending to their morning arse wipe. This bloke has been in academia for half his life and now is on the dark side with one of the many discredited private super funds (would like to know what his take home pay is) and he is pontificating a percentage of the average wage for a universal pension without any credible evidence to support his brain squirt.
Great click bait, but really, apart from the reality that a universal system is sensible and touted by most in the know, what has this parasite added to the value of the debate?
jaycee1
23rd May 2018
1:10pm
This could work if ALL government parties kept their greedy fingers out of the pie AND didn't twick it to better suit themselves and their rich friends.

If all multinational companies paid tax on money earned in this country, instead of being allowed to whip it overseas, having paid almost nothing, then this could be implimented.

I agree that the pension should rise to at least 35 - 40% of average wage - either that, or as in some countries, you get 75% of your final wage.

OMG, I just saw some pink pigs flying past my house a moment ago

23rd May 2018
1:23pm
Good to see the liberal government is considering all options
niemakawa
23rd May 2018
1:24pm
Yesterday an expert who proposes including the family home in the assets test and today another expert who favours a universal pension. Well the second one will get thrown in the bin by our Politicians.

Now in my expert opinion I propose Universal pensions for all regardless of any income or assets.
niemakawa
23rd May 2018
1:38pm
at 60 % of the minimum weekly wage.
Anonymous
23rd May 2018
1:56pm
Given the minimum wage is meant to support a family with 2 kids, the pension should be set at 25% if minimum wage
The kids would have flown the coup and expenses will be halved for the couple in retirement
OnlyGenuineRainey
23rd May 2018
2:47pm
60% is much more realistic. $250 per week for a couple would be absurdly inadequate.
OnlyGenuineRainey
23rd May 2018
2:49pm
And you'd have to have a screw loose to think expenses are halved for a couple in retirement. Rates and house insurance don't change. Electricity may reduce a little, but certainly not to half. Motor vehicle costs would be nowhere near half. Even food costs would not be halved. That's just a ridiculous statement.
Old Geezer
23rd May 2018
3:29pm
OGR it cost a lot less when you retire (about half would be about right) as you don't have the expenses of working and you have time to cook instead of expensive prepared meals. Your car rego is free and you get discounts for just about everything as well if you are on welfare.
Anonymous
23rd May 2018
3:57pm
Thank you OG.
You and a couple of others seem to be the only honest and objective posters on here
Most others are just whingers or leaners whose only interest is in grabbing more from the taxpayers
OnlyGenuineRainey
23rd May 2018
4:01pm
Car rego is NOT free, OG. Get your facts straight. In Qld it's 50% discount for pensioners. In most states (if not all) you have to pay the 3rd party insurance component -which is substantial. And only pensioners get the discount. If the pension were universal, it's likely the states would cease funding it as the Federal Govt no longer reimburses them for the cost.

I don't get discounts for anything much at all, and neither does anyone in my area - pensioner or not!

I never ate prepared meals - even when it meant rising at 4am to cook. My costs have not reduced at all since retiring, because health care costs have gone up substantially and we can no longer do the cost saving things like fixing and making clothes and soft furnishing. As we age, many need more household help and care. Your generalization is based on wild, totally unvalidated and ill-considered assumptions with no attempt to consider fact.
OnlyGenuineRainey
23rd May 2018
4:05pm
Raphael, neither you nor OG are ''honest''. You are both clearly among the greedy privileged who will sprout any BS to justify a stinking system that favour the rich.
Old Geezer
23rd May 2018
4:31pm
Since we both no longer work our living costs have halved and we don't get concessions for anything not even drugs on the PBS. We were able to get rid of one of our cars, only go shopping once a week and write a list so we only go into town once a week.
Anonymous
23rd May 2018
4:59pm
OGR - I think you have serious lack of financial sense if you can’t live on half of what you used to spend while working

Clothes , food , fuel, entertainment .... which is a bulk of your budget should all be 50% or less

So an average at 25% of min wage is plenty
OnlyGenuineRainey
23rd May 2018
8:32pm
Raphael, I think you are a presumptive moron, making stupid assumptions with no knowledge whatsoever of circumstances. My partner and I lived very well on little earlier in life by making ALL our clothing and soft furnishings, growing of foraging most of our food (fishing, hunting, etc) preserving food, using a swap group to swap our produce for food we couldn't grow or forage, building our furniture, repairing appliances ourselves, renovating old houses for profit, even renovating old cars. We simply cannot do any of that anymore. Instead, we are lumbered with significant health costs and costs for maintenance of appliances and our home and car... on an on the costs go. Clothes are NOT less - they are a lot more, because we can no longer buy used fabric at charity shops and make over to produce good clothing for nearly nothing. We can no longer grow much food and can't forage, so food costs have skyrocketed. Physiotherapy - essential for a past injury - costs $85 per week.

Put a sock in your mouth and stop making an idiot of yourself rattling on with your BS. You have no idea what other people's lives a like. And I repeat - only an IDIOT would suggest 25% of a minimum wage was sufficient for a retiree to live on. A VERY SELFISH PRIVILEGED IDIOT WHO WOULD NEVER HAVE TO LIVE ON THAT LITTLE. $250 per week for a couple. You'd be INSANE to even suggest that was sufficient. Pensions are way higher than that and still 1/3rd of retirees live in poverty.
Sundays
23rd May 2018
9:11pm
Raphael, Retirement means retiring from work, not life. If you want to sit in one room, eat canned soup, neglect your health and go nowhere your ideas might work. For the rest of us it’s ludicrous. My retirement is about pursuing hobbies I never had time for, socialising with friends, travelling. It’s not cheaper than when working, just different expenses . I am also conscious that some retirees aren’t able to do these things. You insult them suggesting that they should live on less
Anonymous
23rd May 2018
9:42pm
Rainey -your stories get wilder and wilder by the day

Sundays- in referring to those who did not save and so are in a pension.
Welfare should not pay for your hobbies or travel or anything of the other luxuries you enjoy
OnlyGenuineRainey
24th May 2018
7:43am
Raphael, you are showing yourself to be a selfish, greedy, self-serving and inhuman creature, with no decency whatever. I agree that many on a pension did not save, but many DID live responsibly but were exploited, underpaid, suffered illness or crisis, had children with disabilities that imposed massive cost... etc. etc. etc. Many are on pensions because SOCIETY failed them, not because they failed. Only the nastiest and most self-serving can deny that.

People are entitled to LIVE in their old age. Only a monster would condemn them to a miserable existence with nothing to live for. And the OAP is NOT WELFARE - at least for anyone who worked and paid tax. The vast majority of those who didn't, couldn't, and to condemn them to misery is just vile in the extreme.

The OAP should be universal and should allow every retiree to live in guaranteed modest comfort, with security that quality health care is available when needed and with enough income to continue LIVING and enjoying life. That doesn't mean dining out regularly or having lavish holidays. It DOES mean continuing to do some of the low cost activities people enjoy - such as playing sport, participating in a band or choir or chess or scrabble club, doing yoga, etc. etc. etc. Certainly everyone should be able to afford good food, warmth, and to visit friends and loved ones and entertain loved ones occasionally, and buy small gifts for grandchildren. To suggest people who worked and paid taxes for decades should be deprived of that is to show yourself as one of the thoroughly filthy and vile greedy privileged who endorse slavery or feudalism.
Old Geezer
25th May 2018
3:12pm
I agree Raphael OGR stories are getting bizarre and I don't for one moment believe any of it.
OnlyGenuineRainey
26th May 2018
12:52pm
Then you are an ignorant fool, OG. Who the hell are you or Raphael to presume to know how I lived or where my savings come from? Some people are just so full of themselves! And if you are so smart that you can judge me, why are you making so many stupid comments based on misinformation?
GrayComputing
23rd May 2018
2:28pm
Yet another biased article from a very rich WEB TROLL paid for by the super rich

What we should do:
It is time for all of us to rant at our PMs to take action for human decency and a huge stress reduction for pensioners

NO ASSET TEST FOR A PENSION EVERV AGAIN!
A pension is not welfare.

Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules
Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly,

Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

Does your MP really like being part of the system that allows this indirect abuse of the elderly?

This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

We all need to tell our MP that these criminal asset tests for a pension must be dropped now.
NO ASSET TEST FOR A PENSION EVER AGAIN!
Jim
23rd May 2018
2:28pm
I am not sure I understand the proposal, is the suggestion that everyone gets a pension of 10% of the average wage, which according to current stats is about $81,000 so that would mean that everyone would get a pension of $8,100 pa then on an income tested basis there would be an addition to the pension of up to a further 17.6% so if my maths is correct pensioners could get up to $22,256 pa or am I misunderstanding something here. If my above understanding is correct how will it work, would you be liable for tax on anything above the tax free threshold, if that is the case that would then mean everyone would have to fill in a tax return and pay tax on the amount above the threshold, so wouldn't that create additional paper work for everyone? I am sure I have got it wrong, perhaps someone can explain in plain English exactly how it would work, and what the expected monetary ammount would be for a pensioner with no other income.
Jim
23rd May 2018
2:39pm
Sorry my math was out a bit, it should be $22,356, I must of allowed a bit for GST
Old Geezer
23rd May 2018
2:44pm
It is the same as the OAP is now except everyone of pension age gets 10% and if your income is low enough you get the other 17.6%.

ATO will know all about your income so a tax return will be very simple.
Old Geezer
23rd May 2018
2:45pm
ATO will data match your income back to what you got paid as OAP and send you a bill if you got too much or send you a cheque if you didn't get enough.
Jim
23rd May 2018
3:18pm
So the figure of $22,356 is the full pension if you have no other income, and is that per person for a married couple or is there a different ammount for a couple? That figure works out at about $430 per week, is that about the ammount of the full pension?
Not sure how the ATO will know what your income is, if you are doing a bit of part time work, the hours you work and the ammount you get paid would vary week by week and you may pay tax some weeks and other weeks pay nothing.
Old Geezer
23rd May 2018
3:26pm
Sounds to me like he is talking about same rates as the OAP is now.

ATO will know how much you earned and how much tax you paid as your employer will tell them.
niemakawa
23rd May 2018
3:35pm
Wait until Australia becomes a cashless society and everyone must pay for everything electronically. All your spending will undoubtedly be linked to the ATO which will be cross-checked against your tax return. Centrelink and employers report all your income to the ATO. the ATO will match your (a) income against your (b) expendiuture. Where (b) exceeds (a) questions will be asked. This is the ultimate aim of Governments. Nowhere to hide!!!
Old Geezer
23rd May 2018
3:43pm
ATO has been matching income against expenditure for over 50 years now.
niemakawa
23rd May 2018
3:58pm
OG yes that is correct bit in a limited way. Their claws are out to gather as much information from all sources and with a cashless society will bring greater rewards for the ATO. Also with International Data matching accelerating at high speed the more robust the ATO wil become in increasing its revenue (taxes). Big Brother is getting bigger and we are being watched more and more. Freedom comes freëdom goes, we are in the latter methinks. I can see you now OG, not a pleasant sight!!!
Old Geezer
23rd May 2018
4:18pm
ATO used come knocking on my parents door nearly every year as they had no income and the ATO said people could not live without income.
Adrianus
23rd May 2018
4:32pm
Jim, I think the OZ OAP is more generous than the Nordic system, which requires a 40 year residency status and relies on a mix of retirement income sources similar to the Australian system.

The only way this could work is by a trade off with employers and we all know that those who want a universal pension are the same people who think corporate tax rates should go higher not lower.
niemakawa
23rd May 2018
4:46pm
An extract from a well known fairy tale : The Wolf is the Taxman In this case
"Little pigs! Little pigs!
Let me in! Let me in!"
"No! No! No!
Not by the hairs on our chinny chin chin!"

So the wolf showed his teeth and said: (AKA The Taxman)
"Then I'll huff
and I'll puff
and I'll blow your house down."

But this was too much. The wolf danced about with rage and swore he would come down the chimney and eat up the little pig for his supper. But while he was climbing on to the roof the little pig made up a blazing fire and put on a big pot full of water to boil. Then, just as the wolf was coming down the chimney, the little piggy pulled off the lid, and plop! in fell the wolf into the scalding water.

So the little piggy put on the cover again, boiled the wolf up, and the three little pigs ate him for supper.””
TREBOR
23rd May 2018
7:40pm
It's not the direct income that mattes - it is the indirect income only enjoyed by the manipulators that counts - meaning fringe benefits and 'gifts' from their personal (past) companies etc.... AND all currently untaxed super.....

That will catch the big fish, so don't expect anything from government here, since they will be among those caught out big time by any system that demands tax on income above pension.

This needs thinking right through.... the question is not how to catch the small fry - it is how to catch the big fish..... the ones with all the rorts along the way to a fat retirement.
robmur
23rd May 2018
4:24pm
David Knox's suggestion is poor compared to NZ Super (not called a pension). Google in "NZ Super" to see how their UNIVERSAL BASIC INCOME (UBI) works. The only country in the western world that has a UBI that works. Anyone over 65+ can apply. No income or assets test.
Currently the UBI for a single is NZ$801.74 per fortnight. For a couple, NZ$612.72 per person each fortnight. In April each year the UBI is adjusted up. All recipients receive automatically a Super Gold card for medical, utilizes, rates, transport etc. Any additional money people have socked away doesn't affect receiving UBI. The real poor with no other financial assets have an extensive range of additional financial benefits dependent on their individual circumstances.
The website is excellent and easy to navigate around. Many have tried a form of UBI, like the Swiss, Utrecht in Holland, some cities/states in the USA, but haven't gone on with it.
Congratulations NZ for implementing a system that doesn't try to rip its senior citizens off.
OnlyGenuineRainey
24th May 2018
7:58am
Does the UBI extend to Aussies who retire in NZ? Maybe I should relocate!!! I'm told it's beautiful.
Thoughtful
23rd May 2018
4:44pm
Agree totally in principle. Dare I say it? Sounds a bit similar to what The Greens have been proposing.
niemakawa
23rd May 2018
4:48pm
The Greens!! are you serious!!
Thoughtful
23rd May 2018
4:51pm
Just saying. Check out the article on their thoughts of a Universal Pension.
niemakawa
23rd May 2018
4:58pm
I will.
Jim
23rd May 2018
7:07pm
I wasn't aware that the greens had a thought, let alone a thought that made some sense, that scenario couldn't exist in the real world, I will have to have another look!
OnlyGenuineRainey
23rd May 2018
8:17pm
The Greens were the idiots who got the assets test changed. They should make up their minds what they stand for!

They are not proposing a universal pension but rather a universal income, which is very different. It's estimated that would require tax to be increased by an average of $17000 per year per person! Doesn't sound very feasible to me - but then, the Greens have never been very good at logic or common sense.
Kathleen
23rd May 2018
5:09pm
It is an equality issue. At the moment too much inequality is created by loopholes in tax laws and low wage growth and lack of full time employment. Companies do not even pay GST which is amazing!
By giving a basic allowance to everyone would inequality be addressed? Or would it be just a top up for some who are already well off.
Regardless of why people are poor in retirement everyone is entitled to a liveable income.
It is not about judging people but making sure no one is homeless or hungry.
Until inequality is addressed properly in Australia there will no fairness or justice.
Today’s press club was very informative wherein three women economists discussed the budget and where we are going wrong in Australia.
Anyone watch this today and hear how small parts of the economy need to be aired and discussed publicly and improved?
OnlyGenuineRainey
23rd May 2018
8:13pm
You don't fix inequality by depriving workers and savers of fair reward for effort. All you do is create more poor people. A universal pension would provide a sensible incentive for people to strive and save, thus creating greater general wealth - which is always good for the poorest as there is greater scope for charity and more tax revenue to provide welfare for those who need it.

The problem we have in Australia is that we are punishing work and rewarding tax avoidance, and the result of that will always be falling tax revenues and falling living standards.

When someone who works and saves responsibly ends up worse off than those who didn't, something is seriously amiss and the system needs to be fixed, otherwise we will have far more people living irresponsibly and ending up poor.
Kathleen
24th May 2018
12:45am
OGR
What is general wealth?
Inequality is accepted as being real. Assuming that the wealthy will look after the poor is naive.
You keep harping on about people wasting money and repeating the same ideas over and over. Don’t judge people as lazy or wasteful because they have not saved as much as you have.
Did you watch the Press Club? You might have learned something if you had.
The government obviously does not listen to economists when they make their budgets because their estimates were proven wrong today.
OnlyGenuineRainey
24th May 2018
7:33am
What is it that you want, Kathleen? Bigger handouts to those who have nothing - no matter what the reason for them having nothing and no matter what the cost to others? You are not making any sense at all.

I didn't argue that inequality isn't real. Nor have I ever suggested the wealthy will look after the poor (though those who experienced real hardship and managed to rise above it will always stand up for the genuinely disadvantaged and for fair opportunity).

I certainly agree the government is wrong in its estimates. It's policies are WRONG. My statement was that punishing work and rewarding tax avoidance will always result in falling living standards. Have you noticed that things have been getting continually worse since governments became obsessed with tax cuts for the rich? The burden is falling on the upper working class and middle class - and grinding them into hardship or giving them an incentive to manipulate to regain rewards that were stolen from them unfairly is putting pressure on the overall system and reducing the capacity of the government to allocate funds to those who really need welfare.

Clearly you are not reading what I say:
''When someone who works and saves responsibly ends up worse off than those who didn't, something is seriously amiss and the system needs to be fixed, otherwise we will have far more people living irresponsibly and ending up poor.''

Creating more poor people DOES NOT HELP THE POOR.

I don't judge anyone because they haven't saved as much as I have, but I'm not stupid either. When I see people gambling constantly, holidaying lavishly, dining out often, etc. it's fair to say they wasted money. When I see people living in expensive rented apartments instead of making do and saving to buy a home, it's fair to say they wasted money. Lots of today's pensioners wasted money. That's an inescapable fact. And they are being rewarded for it, while responsible people who worked hard and saved moderately well are being bashed and beaten and stripped of all they earned. Now we even have idiots claiming the economy will benefit from forcing pensioners out of their homes.

Perhaps you didn't notice that when the assets test was changed, the benefit went to people who HAD savings - NOT ONE CENT TO THE POOREST WHO HAD NOTHING? No. Workers who saved were deprived to give to workers who saved less but were still moderately well off. You think that's good for the economy? Thousands and thousands decided to join the tribe who saved less, and claim higher pensions. Who can blame them? As a retiree, I would be $20,000 a year WORSE OFF for having saved extra. That is detrimental to the economy. I'm guessing the Press Club ignored that anomaly. It seems nobody wants to deal with the real problem, because everyone is focused on what benefits THEM.
Gypsy
23rd May 2018
5:25pm
OG - how did your Parents live with no taxable income? I'm seriously interested as I've heard of others having done this in the past but have never heard how they did it.
I guess you would need to be living in a City/Town so you didn't need a car (doesn't work with no public transport where we live) but I've love to understand how it would work today.
Old Geezer
23rd May 2018
6:09pm
My parents were farmers who never made any money from farming like a lot of farmers are doing today. They grew everything we needed to eat and made money from non taxable things like furs in the winter by getting rid of vermin. They traded a lot of goods with other people to get by. They never had any real money but they managed to get by on what they had. It was tough as a kid as I did a full day work as well as going to school and often fell asleep in class.

Could it work today. Depends on what you want out of life I guess. If you want a simple life with food and shelter yes it would work today. Bare in mind that you would have to kill your own animals for meat which may not or may not be legal depending on where you live. We live on a river so had plenty of fish as well. Used to trap wild ducks and had lots of chooks. Cook board used to gout and ask how many chooks we had and we said we have no idea you count them. They used to run wild and we lock them up at night because of the foxes. Apparently we were only allowed so many and only one rooster. They found a second rooster once and we just said that was next Sunday's dinner so he eft in disgust.


If things got bad enough I'd certainly have a go at living without money again but it's not easy as you don't have any shops to buy things.
TREBOR
23rd May 2018
7:41pm
Lots of farmers 'don't make money out of it' - but a lot of it goes to their living.... it's properly called 'fringe benefits'.
OnlyGenuineRainey
23rd May 2018
8:01pm
OG is contradicting himself again. Last time he mentioned his parents they were storekeepers and he worked after school in the shop until he fled the family home when very young because things were very bad in his family.
OnlyGenuineRainey
23rd May 2018
8:03pm
And I knew a LOT of farmers of his parents' generation, and they were ALL wealthy - even with very small holdings. We know from his BS that he was never poor, so he probably doesn't have any concept whatever of what it is to struggle financially. Hence his arrogance and ignorant rants. Lots of rich folk have no idea.
Old Geezer
23rd May 2018
8:25pm
Wrong OGR my parents were never shop keepers and I never said they were or I worked in their shop. My parents were very poor farmers who made no money from farming at all. The only money I got was from fruit picking during the fruit season on neighbouring farms which I gave to my parents as that was the way back then. I have never been rich in my life. I am however now the wealthiest I have ever been due to earning more than I spend. I know what it is like to have no money and that is still with me today as I spend very little even now.
OnlyGenuineRainey
23rd May 2018
8:34pm
And you are a raver, fantasizer, contradictor, and - dare I say it - very untruthful. As well as being arrogant, ignorant, self-serving in the extreme, and greedy. You grew up rich and privileged and you have no idea what it is to do it tough or you wouldn't be the nasty, greedy person wanting to rip off all the battlers of everything they worked for.
Old Geezer
23rd May 2018
8:56pm
Ha ha I just love it when people abuse me as that means I am right.
OnlyGenuineRainey
24th May 2018
7:16am
No. It means you are offensive and objectionable, and it's clear most here agree with me. You are also an egomaniac, and it's common for egomaniacs to think they are right - despite being completely and utterly wrong in every respect.
Old Geezer
24th May 2018
3:46pm
Gee I am really right then.
OnlyGenuineRainey
26th May 2018
2:40pm
If you were right, most people would agree with you. Either you are totally wrong, or you are incapable of explaining yourself adequately so that people understand. In your case, it's the former. Nearly everyone here disagrees with your because you are WRONG.
vincent
23rd May 2018
6:11pm
Netherlands very simple. Everyone gets the pension regardless of super. Calculated by the years you have worked there. 2% for every year in employment over there. Holiday pay gets paid in May and is approx. the same as one monthly payment. Supplement for a dependent ie spouse is included if they are not of pension age. A very simple system. And no the UK has nothing to do with it as some ilinformed twit suggested earlier.
OnlyGenuineRainey
23rd May 2018
7:59pm
Yes but Australian politicians would never stoop to copying a model that actually WORKS.
Florgan
23rd May 2018
8:01pm
Universal pension is a great idea
Those who save all their lives are rewarded not penalised.
Super should not go over 10% from the employer
OnlyGenuineRainey
23rd May 2018
8:04pm
It is the ONLY sensible way to run an economy. Punishing people for working and saving can only lead to higher welfare costs and more poverty. It's STUPID.
niemakawa
23rd May 2018
9:17pm
Agree with you both. The family home must never be included in any asset test. It is sacrosanct.
Adrianus
24th May 2018
9:50am
Punishing people for working doesn't work eh?
Denmark is probably the highest taxing country on the planet. Workers pay 60% on amounts over $55,000.
Those workers get a lousy $10,000 pension at 65 provided they have worked /lived in the country for 40 years. Any extra they get is made up from their employer and personal savings.
The grass is always greener over the fence, until you stand on it for a closer look.
OnlyGenuineRainey
24th May 2018
1:39pm
How come they are all so happy then, Adrianus? They actually get massive benefit for their high tax payment, and they love it. According to a Danish fellow I know, they get a guaranteed home on marriage, free power, free medical care, free education... on and on it goes. I wouldn't mind paying 60% on amounts over $55,000. What's wrong with that if you are getting lots of freebies and a guaranteed pension in old age? Geez. I would just like to earn $55,000 a year! Never got anywhere near that!
Adrianus
25th May 2018
10:47am
They are all so happy because they are more sexually active?? I don't know? Why are they so happy?

(The happiest people in the world should be in Melbourne, the world's most liveable city? )

It cant be because of their high taxes? Surely?

The majority of people would be more comfortable in a controlled environment because of less stress I suppose, but there are many of us who think we can spend our money in better ways. If you want evidence of that just look on this forum and read the objections to pensions in preference to lump sums. People who have nothing have nothing to lose. Look at a career soldier? He has nothing to worry about except learning how to kill. All his medical, dental and financial needs are taken care of by someone else. This allows for a single focus, which clears the mind of bad stress.
I'm a control freak unfortunately, so I like to be in control of my own destiny. Failure for me is not a bad thing if I know I've tried.

The idea of trying to stop everyone from failing is unattainable.
OnlyGenuineRainey
25th May 2018
2:23pm
So what our society does instead is force the less privileged to fail so the privileged can wallow in obscene wealth.

To a substantial degree, in Australia, it is NOT people who fail, it's society that fails them.
OnlyGenuineRainey
25th May 2018
2:28pm
BTW. Their happiness is due to OVERALL SOCIAL HEALTH. Greed and selfishness makes misery, both for the victims of it and for the greedy. Any society in which there are no homeless beggars and all children have adequate food, shelter and educational opportunity is always going to have happier people.
Old Geezer
25th May 2018
3:43pm
NZ system punishes you too with the more you earn the less you get. NO different than what we have here.
Adrianus
26th May 2018
8:02am
Rainey, Less homelessness may have a bearing sure. But just as comparing Denmark's economy with Australia's is like comparing apples and oranges, so too is homelessness on the happiness scale.

Denmark has .2% homeless compared with our .5%. Denmark's figure is low by world standards but so too is their population and its rate of growth.

A rapid population growth is unsettling and displacement is bound to be higher as a result. Denmark's population has grown only 16% in the last 50 years to 5.7mm, while Australia's has doubled from 12.5mm to 25mm.

I know many people would be motivated by self interest to have a universal pension free from income and assets tests, but how does it work for the population at large?
At the heart of Denmark's ideology is the attempt to reduce the number of wealthy and similarly reduce the number of poor.
Why is Denmark experiencing an increase in poverty? Why has poverty doubled in the last 15 years? Is the experiment not working?
You cannot deny that the success of Denmark's social engineering relies heavily on industry and their balance of trade. Is this why corporate tax is so low at only 22% ?
Eventually, if people are paid for doing nothing then it follows, that is what they will do. How will that make them happy?
OnlyGenuineRainey
26th May 2018
12:58pm
Adrianus, corporate tax in Denmark is 8% higher than our ACTUAL rate of 14%. Nominal rates are not relevant.

People are NOT paid for doing nothing. That is a stupid statement made out of ignorance or spite. And no, it doesn't follow that giving someone income security will make them do nothing. People are by nature desiring of the satisfaction of doing something productive or beneficial, and the vast majority will find productive work to do if allowed to. What income security does is free people from bondage and provide security against starvation.
Poverty has increased worldwide as a result of greed and selfishness. The UI in Denmark is way too low now. When the system commenced, it was much higher relative to living costs - but like everywhere else, the greed of the rich has had an impact.

Clearly, you have no concept whatever of what life is like for those who have been seriously deprived, socially excluded, or subjected to major injustice. Give those people a UI and they will blow you away with what they will achieve. All they want is a chance in life. With security, people can take risks to invent and create and innovate. Combine a UI with a robust and fair tax system and the cost is very manageable, but the improvement in social conditions is beyond measure.
OnlyGenuineRainey
26th May 2018
1:07pm
And for emphasis, I repeat, it CERTAINLY DOES NOT FOLLOW that if people are paid for doing nothing (and a UI does NOT pay them for doing nothing anyway - it merely gives income security regardless of what they do!) that is what they will do.

The majority of people HATE doing nothing. It's against human nature. If you give people a secure income, they will strive to fulfil their potential - free from fear of poverty if they don't succeed.

My partner and I would be very wealthy today if we had even very basic income security. It was the fear of our kids starving that forced us into menial jobs and to spend every spare minute growing food, making clothes or furniture, fixing and improvising any way we could to cut living costs. We were always innovators. We invented. We were creative. A friend was a master sculptor, but he wouldn't quit his labouring job to sculpt for fear that he wouldn't sell his creations and his kids would be homeless. A relative is a brilliant landscape painter, but he worked as a farm hand for peanuts plus accommodation and food because it was ''secure'', and he was afraid of the consequences of venturing into the scary world of selling artworks.

People don't WANT to do nothing. They want a life - not an existence. And that's what the UI delivers. And when they are no longer physically or mentally able to do much, the UI lets them rest.

Your statement shows a lack of understanding of human psychology and a lack of compassion.
Adrianus
26th May 2018
3:25pm
Rainey you are not being realistic when you peddle that political BS regarding corporate tax. The rate is 30% !
Many businesses failed to make profits during our anti business governments headed by Rudd and Gillard so its inevitable that they have had some carried forward losses. Those losses have almost been depleted , so to capture a short time frame and extrapolate 14% from it is not only stupid but also dishonest.
If 14% was the actual rate then what's the harm in dropping it to 25%?
OnlyGenuineRainey
26th May 2018
3:29pm
Companies paying 30% would be few and far between after taking into account all the avoidance and reduction strategies allowed and used. It's NOT just to do with c/fwd losses, Adrianus. There are all sorts of other reductions. And the harm in dropping it to 25% is that the amount paid will still reduce by 5%. Until they plug the holes, there should be no reduction.
OnlyGenuineRainey
26th May 2018
4:16pm
And actually, income tax isn't that high in Denmark when you consider all the deductions and the tax-free or low tax income thresholds.

According to my Danish friend - and it makes perfect sense - increasing poverty is due to the huge increase in VAT. In 1967 it was 10%. Now it's a whopping 25%. A high indirect tax always drives increased poverty because it impacts hardest on the poorest - especially as there are virtually no exemptions in Denmark, not even for food. Poor people have to spend 100% of their income on necessities, so a 25% VAT means their income is really only 75% of their stated after-tax earnings. Conversely, the wealthy can save a significant portion of their income, so they don't suffer nearly as much - which counters the benefits of progressive taxation and the UI to a large extent. Sad, really. But once again, greed and selfishness destroys.
OnlyGenuineRainey
26th May 2018
4:28pm
BTW Adrianus, increasing poverty is a global problem and well recognized as such. It's everywhere. And it's due to greed and selfishness. That's it in a nutshell. Everywhere you look, the system is overfeeding the rich and cutting the real incomes of the poor. Taxes are becoming less progressive - with greater focus on indirect taxes, which are not progressive, and on cutting taxes at the high end and in areas where tax avoidance is higher, while paying scant attention to the falling real incomes of the less affluent.

I notice here that in all discussions here, the well-off favour anything that benefits the wealthy - no UI; punish pensioners for owning houses; cut company tax - while the battlers (including some - like me - who are no longer battling, but know how it feels) favour reforms that reduce inequality. It's the age old story. Self-interest has always driven policy, but what has changed is that society has lost its soul. Once, people had integrity and ethics. Doctors and lawyers, for example, were more focused on helping people than on earning big bucks. Today, the big bucks are all that matter to most. Few have a social conscience. Few actually care about the health of society as a whole, much less the well-being of strugglers or the disadvantaged. It's so much more convenient to blame people for their circumstances than to fight for social justice.
Adrianus
27th May 2018
9:00am
So the Danish poverty increase spike is not related to their higher unemployment, lower incomes, higher cost of health care (which may indicate a lower life expectancy), lower probability of wealth creation, lower economic rate of growth, lower GDP per capita??

No, none of that apparently? The Danish spike in poverty is because of a high consumption tax, greed, and selfishness.
Well perhaps you could explain the origin of this greed and selfishness? Who is responsible? With all this tax revenue and balanced budgets where is the problem?
I wonder , if we had a resident royal family would it cost us more?
It sounds easy to make a grab at something the Danes are doing which would benefit a small group of Australians but what are the knock on effects?
Jtee
23rd May 2018
9:27pm
Yes, I support a universal pension for all. It is great to hear that this has been brought into public discussion by David Knox. Now let politicians begin to speak and research the cost benefits of a universal pension that doesn't penalise the savers in society as the current system does.
PJAUS
24th May 2018
8:32am
Why not follow the New Zealand Gold Card System? It's this Danish system with it written in English. All people over 65 get the Gold card and the pension. They pay tax each year based on any earnings over the pension. SImple and easy. Oh I forgot, someone in the FInancial sector wouldn't make a quid out of that would they......
Old Geezer
25th May 2018
3:28pm
I'm left wondering what would happen if the OAP per couple was dropped to $600 a week per couple. Not too many happy chappies.

NZ pension also decreases the more money you earn too so it's not any better than our system here.

In fact I'd say it is a bad system as people will not invest their money well at all as the more they earn the less they get.
OnlyGenuineRainey
26th May 2018
12:36pm
WRONG AGAIN, OG. You are a master of idiotic mistakes - or are you just trying to deceive?

The NZ pension is $616.72 per WEEK for a couple, after tax. And you can earn $100 a week on top of that tax free, after which it reduces by 70c for every dollar earned. It's still profitable to invest well, as you get to keep 30c for every dollar of income, and a couple has to earn more than $41690 before they lose their government ''super'' (as the NZ pension is called. A much fairer system than in Australia, where some couples earn as little as $20,000 a year and get nothing from the government.
OnlyGenuineRainey
26th May 2018
12:38pm
Furthermore, if a couple choose, they can draw a single pension and then their earnings do not affect the pension at all, so they might be getting $60,000 a year or more in investment income and one partner could still draw $616.72 per fortnight in government super.
OnlyGenuineRainey
26th May 2018
12:41pm
No, actually - correction! Income DOES NOT AFFECT a pension after you reach retirement age UNLESS the income is from an overseas pension. So you couldn't be more wrong, OG.
Fready
27th May 2018
6:41pm
Starting back in 1946 (1956 for me) Ben Chifley introduced a system where we all paid income tax PLUS 7.5% of our wage to fund a universal pension (similar to the current super system). The Labor Party insisted that contributions shouldn't be kept in individual accounts (like the UK where retirees get the entitlement earned by their contributions). They went into a pool called the National Welfare Fund and when the pool was big the politicians took it.
Menzies initially insisted that the contributions should be kept separate from general revenue (In 1950 the balance was already nearly 100 million pounds), but with the support of Labor had future contributions paid straight into consolidated revenue, but still collected the 7.5%.
In 1977 Fraser took the approx. A$500 million (several trillion dollars in today's dollars) left in the Welfare Fund and transferred it into consolidated revenue.
In 1985 Labor introduced income and asset testing and in the process excluded millions of levy paying Australians from receiving the pension they had paid for.
This is the issue that we need to be discussing.
If we were to start again the same thing would happen. Never get between a politician and a pile of money. Those in the current compulsory super system face the prospect of having their funds stolen down the track.!!
Adrianus
28th May 2018
9:07am
Good post Fready!
In addition, Hawke and Keating slapped new taxes on our retirement savings, thereby significantly disadvantaging todays retirees. The introduction of a 15% tax on contributions, 15% tax on fund earnings were that devastating that many superannuants wondered about the viability superannuation.

They are coming for more.
This is why a budget surplus is important to every person regardless of age or personal circumstances.
One party wants higher taxes, the other wants lower taxes.

Show us the surplus!!!
What do we want??!!
We want a bloody surplus!!
Now!!
Show us the surplus!!!

That's my catch cry for the next fed election.
Show us the surplus!!


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