Former prime minister Paul Keating has repeated his call for a “national family” to be established to take care of the financial needs of elderly Australians who run out of superannuation savings.
Mr Keating, who was the architect of the super scheme, said increased longevity would in future see many people in their 80s and 90s outliving their pension funds.
It is not the first time he has called for a “longevity levy” to finance the medical, accommodation and other living costs of the elderly.
In 2014, he said that a levy of two to three per cent of a person’s wages could go into a type of insurance scheme specifically to fund elderly people who could not afford their living expenses.
He made the call again this week at a superannuation forum organised by Visy Industries chief Anthony Pratt.
While most older Aussies with limited means qualify for the Age Pension, Mr Keating’s proposal would address the growing concern that in years to come, welfare for the booming elderly population would become unsustainable.
“We have no policy here in Australia for the 80 to 100 cohort,” Mr Keating said. “I don’t believe that it should be left to superannuation.
“I think it should be a national insurance scheme. Only the Commonwealth can insure across generations.”
While today’s pooled superannuation is worth more than $2.7 trillion, Mr Keating said the super guarantee of 9.5 per cent of wages was “inadequate” for people living beyond 85.
“It [superannuation] will only insure people until about age 83 to 85. After that, they’re on their own,” he said. “And of course the children of all of us are completely on their own after age 80, because they’ve got another 20 years to go.”
Under Mr Keating’s proposal, the insurance scheme would act as a safety net for those who needed enduring aged care services.
“And it’s possible to do. It’s a classic insurance thing,” he said in 2014.
“It’s like the houses in the street: you pay your insurance, but only one house burns down. What happens? One person dies earlier, but their work and savings subsidise other people who last into their late 90s.”
Would you be happy for your wages to be levied to ensure all your costs were met in your latter years?