Retirement incomes need overhaul

David Murray has called on the government to overhaul the retirement incomes framework.

Retirement incomes need overhaul

Speaking at the Committee for Sustainable Retirement Incomes (CSRI) inaugural leadership forum last night, Financial System Inquiry (FSI) chairman David Murray has called on the government to overhaul the retirement incomes framework.

The government was widely criticised when, last month, a comprehensive review of the retirement incomes system was ruled out. Mr Murray believes that a strong retirement system is critical for Australia considering our reliance on foreign capital to fund investment.

“The only sensible way to approach solving this intergenerational problem is to look at superannuation, pensions, housing, welfare, and the tax system all together,” said Mr Murray.

Mr Murray was also critical of the superannuation industry for focusing on reporting average performances figures above the industry mean, instead of focusing on tailoring their products to members’ needs.

“There is not enough initiative for funds to sequence risk depending on members’ age, which means some people are exposed to too much risk at the worst time in their life cycle,” said Mr Murray.

Read more from www.theage.com.au

Opinion: An unpopular review

The wash-up of the 2014/15 Federal Budget saw the Abbott Government’s popularity ratings plunge to a record low. It took four months of changes leading into the 2015/16 Budget to clean up the mess and set the party in a direction that removed all unpopular proposals. 

Mr Murray is suggesting a complete review and overhaul of the current retirement incomes framework from the bottom up. As he said last night, this would require superannuation, pensions, housing, welfare, and the tax system to be reviewed all together. The words ‘tax review’ are exactly what this government is looking to avoid, with recent polls now suggesting Mr Abbott and the Coalition have clawed back popularity to be almost on par with the Labor Party on a two-party preferred basis.

Unfortunately, it’s sometimes the reviews that scare us the most which may have the biggest impact on the future of our country. It’s disappointing to see a government I voted into power sitting back playing the ‘safe game’ simply to push through to the next election with a chance of regaining power.

Change for the sake of change isn’t progress, but a review of the entire retirement incomes system, when considering the extremely valid points raised by Mr Murray, makes more than enough sense to me.

What do you think? Should a comprehensive review take place? Are superannuation funds offering products that suit the needs of their individual members’ age and stage? 





    COMMENTS

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    MacI
    3rd Jun 2015
    9:59am
    This morning I listened to an interview with the Assistant Treasurer Josh Frydenberg that left me fuming. In the interview he reiterated his governments policy that they would not consider taxing earnings on large Super balances in this term of government or beyond. He rolled out the mantra that whatever a person has accumulated in Super is their money and the LNP will not be taxing the hard earned savings of Australians. What a stupid thing to say. Following that logic we shouldn't be paying tax on interest earned on savings accounts. Pity they don't have the same view when it comes to the Age Pension which indirectly is an attack on the hard earned savings of less wealthy Australians.

    I don't like it but with gritted teeth I can cop the impact both the change to the Income Test introduced on 1/1/2015 and the proposed Asset Test to be introduced on 1/1/2017 if it makes the Age Pension more sustainable but to continue to in effect provide the very wealthy with a tax free haven for accumulated wealth that keeps on compounding year on year is beyond the pale. This is not about delivering a retirement income but about estate planning.

    This government is about attacking lower and middle income Australians and looking after the wealthy.
    Grateful
    3rd Jun 2015
    10:25am
    Policies for elections and news polls will always be put ahead of that, so called, "good government" promise made after that "near death" experience.
    Do not expect ANYTHING controversial before the next election, be it for the leader of the Liberal Party, or the general election!!!
    MICK
    3rd Jun 2015
    12:53pm
    The problem with ANY REVIEW from the current government is that dishonesty is all you ever get. Personally I agree with a proper review conducted by somebody who is truly impartial. What we have seen so far is 'reviews' of all manner conducted by people who follow the party line and this is little more than propaganda.
    What I would like to see is a quick end to the superannuation tax shelter for wealthy Australians. This has been let go for several decades and stopping this rort would free up considerable amounts of money.
    Don't expect this government to hold an honest review though. Won't happen.
    Anonymous
    3rd Jun 2015
    1:13pm
    A review is long overdue. The rules for Aged Pension eligibility are just plain stupid, and the change to the assets test makes it worse. A couple whose assets - accumulated through 40 years of sacrifice - earn $25,000 a year loses the pension, but a couple earning $70,000 a year retain it, regardless of the source of earnings (unless they also have substantial assets). Someone with both substantial assets and earnings can have earnings exempted from the means test. Older retirees with younger partners can shift their super into a partner's superannuation account to have it excluded from the assets test. People under 60 can gift money to their kids, and pensioners can plunge $1 million or more into the family home, and spendthrifts can gamble and holiday to their heart's content knowing taxpayers will shell out to support them later, but DO NOT EVER DARE to save honestly for old age or to hope to leave your kids a small nest egg if you want the benefits attached to even a small part pension.

    Treasury says the richest 1% are receiving taxpayer-funded handouts of $19000 a year, while we apparently can't afford to donate $500 a year to low income-earners' super accounts. Treasury says we pay an average of $510,000 in retirement benefits to the rich (in tax concessions), and $250,000 a year to the poor (in pensions). I suspect plenty in the middle miss out at both ends and get nothing!

    If you have ''assets'' that are actually liabilities and you can't sell them, Centrelink docks your pension unfairly. If you try to profit from a business but it fails and you shell out to pay its debts, Centrelink deems the business debt an ''asset'' for you and docks your pension.

    The incentive to save and plan for retirement has been wiped out. People are urged to put money into super to accrue enough to take the pressure off the taxpayer, but then, unless they save enough to be totally self-funded, they are punished severely for being frugal and required to drain their savings away before they can claim even the minor benefits granted to pensioners. The disadvantaged (disabled, sick, etc) don't get enough to live a decent lifestyle, but plenty of spendthrifts and wasters put their hand out for Government housing and a full pension after a lifetime of earning more than enough to support themselves in old age.

    The whole system is ridiculously flawed and in dire need of a total overhaul. But I agree with Mick. We can't trust a politician to do it. In fact, I think we'd be hard-pressed to find anyone we CAN trust to exercise plain commonsense and fair judgement.
    TREBOR
    3rd Jun 2015
    5:14pm
    As before - 'their' money cops three levels of tax concession - i.e. welfare.

    1. 15% concession for putting it away.
    2. Dividend imputation to their fund, since most deal in shares of some kind.
    3. Tas free when drawn as an annual income after retirement.

    Good work if you can get it and a hell of a lot out of the taxpayer's pocket.

    On the other hand - a pensioner is paid out of the income tax that has gone into consolidated revenue - and a portion of income tax is for social security. therefore a pension is a bought and paid for right and putting it away via income tax has incurred full taxation, it has received zero imputation along the way, and the moment a pensioner has the damned gall to earn a few dollars, their pension is taxable income as well.

    I'm sorry waste of time Frydenberg - since when do we need an extra mouthpiece to spout the lines of the public servants who do the real work? Does Frydenberg organise the paper clips?

    Super is NOT their money - they got several concessions from the taxpayer to get it, and it is indeed thus less'theirs' than the pension to pension only retirees, as well social security as to the unemployed is.

    Those are the facts.. and they are indisputable.
    PeterB
    3rd Jun 2015
    10:18am
    I honestly believe that the reason our politicians act like they are is because they are so focused on their own re-election prospects, they really are unable to make any decision that may go against them in their own electorate.
    Anonymous
    3rd Jun 2015
    10:32am
    PeterB, you got it in one!
    MICK
    3rd Jun 2015
    12:54pm
    And for whom they are being funded. This is at the heart of the problem.
    Patriot
    4th Jun 2015
    8:11am
    PeterB
    In my book it is called GREED

    3rd Jun 2015
    10:31am
    The RBA's last drop in interest rates has again reduced term deposit interest rates for banks and super accounts, putting Aged Pensioners and self-funded retirees behind an even bigger financial eight-ball. Yes, to counteract crippling economic positions of those in this situation exemption from paying tax on investments would certainly be a step in the right direction. ANYTHING to lessen the financial hardship of retired people would be heartening news, but
    I'm afraid this is only wishful thinking. Perhaps we should have our own flag which resembles an inside-out pants pocket that could be flown at all aged facilities - ?
    MICK
    3rd Jun 2015
    12:57pm
    The irony is that retirees are living on less and less whilst this government is attempting to reduce their pensions. Wealthy retirees will survive. Average battlers will be screwed and suffer.
    Anonymous
    3rd Jun 2015
    1:17pm
    Retirees have suffered more from the economic downturn than any other sector of society. There has been a massive intergenerational wealth transfer from retirees to young borrowers through interest rate falls. Yet the Government is determined to make retirees pay for the budget deficit. How much more can they take before retirees finally arc up and demand respect?

    I'm wishing I'd taken those expensive holidays, given money to my kids, and dined out regularly, because savings did me no good. I will age in poverty, despite having carefully planned for old age and sacrificed a great deal to try to ensure security in later life. Meanwhile, my gambler relatives who blew the lot on grog and poker machines are laughing - getting full pensions and benefits and living in Government housing. But I fear for the genuinely disadvantaged. Like the battlers who saved, they are also screwed and doomed to suffer. It's a disgrace!
    MICK
    3rd Jun 2015
    2:05pm
    Its called the ballot box Rainey. But voters have to be intelligent enough to understANd when they are being worked over. That is where the propaganda machine working for the rich end of society has an advantage. Media outlets are for the most part controlled by the big end of town and the ones left (ABC and GetUp) are copping ongoing attacks and attempts to shut them down.
    Anonymous
    4th Jun 2015
    3:10pm
    Yes, Mick, and even some dumb retirees who are being hurt by LNP policies are slamming GetUp and the ABC, calling them ''lefties''. Seems to be a case of ''my team can do no wrong'' for some people. Instead of looking objectively at the facts of a matter, and supporting what makes sense, they just scream abuse at anyone who they think might be supporting the other side.

    Well, I've always been an LNP voter, but never blind to their wrongs, and I could never support this Government. I'm disenchanted with Bill Shorten also, and I've always had concerns about some of Labor's favoured policies, but at least they have a social conscience and some respect for the real ''lifters'' in this country (both present and retired). I will not support a party that continues to indulge the rich when the nation clearly cannot afford to, and is happy to take from the battlers to pay the resulting bill.
    Adrianus
    4th Jun 2015
    3:56pm
    C'mon Rainey and mick, give us a break! You may have had it good when Rudd and Gillard needed your vote. This government is just clawing back that misspent money.
    Anonymous
    5th Jun 2015
    12:51pm
    Frank, I didn't ''have it good'' when Rudd and Gillard needed my vote, and this Government is NOT just clawing back ''that misspent money''. Actually, what it's trying to do is force lower to middle income earners to pay for the obscenely generous tax cuts Howard and Costello handed to the richest 10%. Even Hewson - a Liberal leader (in case you've forgotten) has been truthful about where the budget deficit stems from and what is needed to fix it. You, Frank, are wearing blinkers and believing BS sprouted by current lying LNP politicians. You should do some further research and learn the truth.
    Kato
    3rd Jun 2015
    10:42am
    The changes that were announced in the 2014 Budget are still in play. Just being introduced piece by piece by stealth. As for the near death experience came about because of there lack of judgement in reading the electorate' arrogance does not make for great leadership. And now we have to appear to be humble. If Frydenberg believes his own rhetoric regarding taxes on super and they don't believe in taxing money that belongs to people then hopefully he will look at the tax structure of Super for people who have to retire due to ill health. Thirty percent I had to pay on mine.
    Kato
    3rd Jun 2015
    10:45am
    Correction fifteen percent.
    MICK
    3rd Jun 2015
    1:00pm
    The whole system needs to be looked at in context. The question is: what loophole will be left for the rich to avoid their responsibilities?
    There is one thing for sure and that is if this government is re-elected and has control of both houses then average Australians will be savagely mauled. That would be clear to all given the past 12 months.
    Ahjay
    3rd Jun 2015
    10:47am
    A review is a must.

    All options must be on the table, including taxation on pension fund earnings for the high stakes holders.

    The superannuation system has to be a universal system meaning all Australians including Politicians and Public servants would be on exactly the same scheme as those who currently subsidise them. If they need more in their retirement funds, they can salary sacrifice the same as the rest of us,THE AGE OF ENTILEMENT IS OVER. We have LIFTERS and LEANERS in this country according to one of our elected LEANERS. It's about time we balanced the books.
    MICK
    3rd Jun 2015
    1:02pm
    Agree. And the tax deduction for payments into superannuation either have to end or cut out at a low figure so that they do not continue to be exploited by high income earners who have the money to contribute.
    Anonymous
    3rd Jun 2015
    6:15pm
    Even more importantly, tax concessions on earnings in super need to be capped. The new input limits are a step in the right direction, but many have huge amounts in super earning massive returns at just 15% tax whereas they would pay 42%+ on earnings outside super. There needs to be limits to the amount of concessions the rich can claim, so that taxpayer funds are directed appropriately to areas of greater need.
    Peterrj
    3rd Jun 2015
    10:57am
    'Retirement incomes need overhaul". You kidding me??? I have worked every day of my life and as best I could I have planned my financial retirement. Whilst not rich, I am reasonably satisfied with the result and NOW you want to revise it all again. What, to give me more money??? Yeah right. And this is the country of 'a fair go' and the consistency of 'the rule of law'.
    MICK
    3rd Jun 2015
    1:06pm
    Me too Peterrj.
    Whilst I understand how you feel what is needed is not an attack on those who have put a few dollars away but rather those who have put millions away through avoiding the taxation system that the rest of us have to confront.
    The whole point about a 'fair go' is that average Australians have been targetted by this government and the rich as well as public servants and politicians themselves have no intention of being caught in this net. That is the problem and that is what needs to be addressed. It won't be!
    Anonymous
    3rd Jun 2015
    6:21pm
    PeterJ, I don't think the goal is to penalize those who saved to retire. Rather, it's to redirect taxpayer funds to improve outcomes for the less well-off and limit concessions to the very rich. Treasury says taxpayers are giving the richest 1% an average of $19000 a year to top-up their huge superannuation funds, while we apparently can't afford to continue giving $500 a year to the lowest income earners. Retirees couples can earn $74000 a year and still claim a small part pension and benefits, but a couple with just $825,000 in savings and no ability to ever earn again (other than perhaps $22,500 return on investments) is denied a pension. The rules around pension entitlement are just plain stupid, and grossly unfair.

    We DO need a review. A responsible common-sense review would certainly not hurt someone like you (assuming you are truthful in saying you are not rich), but SHOULD help a great many retirees who are being wrongfully denied the standard of living they earned and deserve, improve conditions for the genuinely disadvantaged, and reduce the obscenely generous taxpayer-funded benefits to the richest 5% of Australians. The question is, of course, can we rely on anyone to conduct a fair, common-sense review and make decisions that are genuinely in the national interest, rather than in the interests of the power-brokers and their supporters?
    TREBOR
    3rd Jun 2015
    8:45pm
    Perhaps the only solution is a national superannuation scheme for all, with contributions capped at a level that will provide the equivalent of the pension, and after that full tax is applied. That applies to everyone including politicians and private super for companies that caters to their elite. No more free rides - the age of entitlement is over Tony and Joe - YOUR super no longer gets a safe haven - you are no more likely or unlikely to get a job than anyone else these days - and your application of the part-time casual regime means YOU, too! You are employees contracted for four years or so - after that we have ZERO obligation to support you!

    That cap can easily be indexed (then another agument begins - how?), and all retirement income above a set level for all is taxed at the same rate.

    No more free rides.
    Peterrj
    6th Jun 2015
    7:11am
    Trebor, in this new world of yours you say, 'No More Free Rides' ... Please explain?Tell me if I have it wrong: No free rides actually means that the only criteria to receive the full Aged Pension is reaching pensionable age and tax those the full rate on savings after they reach a modest amount .... what ever that may be? Wouldn't I then get a 'free ride' to the benefits of Aged Pension merely if I live long enough???
    wally
    3rd Jun 2015
    12:07pm
    Retirement income overhaul? I wonder whose ox is going to get gored this time?
    MICK
    3rd Jun 2015
    2:10pm
    Who do you think wally? Those who lie down and take it. Want to start a Retiree Party? I'll join.
    Patriot
    3rd Jun 2015
    5:18pm
    Mature Age Party welcomes new members!

    http://themap.org.au/
    TREBOR
    3rd Jun 2015
    8:48pm
    MAP - I'd need to meet the heads of this organisation.... I judge for myself.
    jeansievers
    3rd Jun 2015
    12:31pm
    I wouldn't trust the Abbott government to run a chook raffle. Don't trust them because they have a proven record of saying one thing and doing another, they lie. The only outcome you would get if they did anything it would enrich the richest in our society.
    Ahjay
    3rd Jun 2015
    4:01pm
    They would eat the chook and throw you the bones
    Fredklaus
    3rd Jun 2015
    1:07pm
    unless this govt can find jobs for over 50.,the pension age should be lowered to 60,how can someone live on dole and accumulate for retirement.they have to use their savings to exist
    TREBOR
    3rd Jun 2015
    8:50pm
    The idea from both sides - Labor and LNP - of raising the pension level is insane...

    Must be immedfiately reverted to 65.

    I'm 65 now and bordering 66 - and I work - but let me tell you - the work is harder every day. Why should those of over 65, most of whom will be in the same place - have to endure no pension rights until 70 or whatever?

    3rd Jun 2015
    1:57pm
    I wonder if the opinion polls are showing accurate results? Retirees make up a powerful voting block, and it's retirees who are being totally screwed over by this Government. More to the point, it's now those retirees who have accrued some savings for retirement - who probably voted LNP for most of their lives. Polls tend to take a cross-section of ages. Hopefully, there is enough weight among retirees who are being screwed to throw this Government out, and if that's the case, then there should be more than enough weight to convince the Government that a comprehensive retirement income review is essential.

    It's sad that politicians have so little integrity that they put popularity ahead of what is good for the nation. But then, it's more than sad that Joe Hockey can apparently justify taking money from the taxpayer to pay rent to his wife. It's not about what's legal. It's about integrity and decency. It's clear that that's in short supply in Canberra at the moment - so we can't hold much hope for anything that would actually reflect a sense of decency and commitment to the national interest. What a shame!
    MICK
    3rd Jun 2015
    2:09pm
    The problem with retirees as a group is that they refuse to vote as a block. If there were a Retiree Party which ran candidates in every electorate then we would not be under attack. Whilst there is not and whilst many retirees live in a dreamworld (onset of dementia?) expect nothing to change. Why should it. The big parties are not stupid as they listen to the numbers not the rhetoric.
    Supernan
    3rd Jun 2015
    3:23pm
    KCI makes a great deal of sense. Its ridiculous to say what people accumulate in Super is their money when they get Tax breaks to get it there. That makes part of their accumulated wealth "our" money !
    No Retirement Planning Reforms will work unless they come up with a solution for Small Business owners - most cannot afford Super, yet employ more people & pay so more Super for their Employees than anyone else. They also pay a lot of Tax. When we retire, most of us cant sell our Businesses for their true worth, due to the ecomomy, and end up on part pensions. And the interest earned on money from a Business sale gets taxed. Why is it not classed as "our money" ?
    disillusioned
    3rd Jun 2015
    3:39pm
    Under this government, the "fat cats" prosper while the "lean mice" get leaner! They seem to want to protect their own whopping super entitlements while cutting back on part-pensions for those of us who've scrimped and saved and are just over the proposed limit. Under Abbott, the rich get richer and the middle-class get poorer! Roll on next elections - that's the last time I vote Liberal!!!
    Anonymous
    3rd Jun 2015
    6:28pm
    Me too!
    Adrianus
    4th Jun 2015
    9:53am
    News Flash. The rich aren't getting richer. Nobody is getting richer. Our banks have been doing it tough over the last 4 years and need another RBA rate cut to increase margins. But hey, it's not about what's good for the country its all about you and what you could be missing out on.
    Putting Bill Shorten in the top job would be like throwing petrol on an out of control fire.
    Anonymous
    5th Jun 2015
    1:19pm
    Wrong again, Frank. The rich ARE certainly getting richer. Obviously you don't read! There has been a massive transfer of wealth from the poor to the super-rich, and it's continuing.

    And yes, it IS about what's good for the country, because what's not good for the people is not good for the nation. I don't like Shorten, but at least he isn't playing Sheriff of Nottingham - stealing from the poor to give to the rich. That is NOT good for the country at all, and a lot of smart people are now warning that it has to stop or there will be dire consequences.
    Dotty
    3rd Jun 2015
    5:01pm
    I totally agree with all that have said about a review and from an impartial party! As one said any review has been dealt with from someone that is connected to the present party of the day that is holding office !
    I say have a review and get everything out in the open and tax those that can well afford it, instead of sitting back and hoarding as much as they can and wont get to spend before they die but leave to heir's to carry on earning and not paying the proper amout of tax that the normal everyday worker pays !!
    Dotty
    TREBOR
    3rd Jun 2015
    5:03pm
    Step 1:- Unconditional acceptance that a government paid pension is a right and is already paid for out of income tax.

    Step 2:- Unconditional acceptance that a specified input into superannuation is to provide an alternative to a government pension.

    Step 3:- Ensure that Step 2 includes a (glass?) ceiling, that ensures that an excessive amount of incme is not salted away with tax concessions. i.e. -= an upper limit on superannuation before tax is paid in full on contributions.

    Step 4:- Clarify once and for all the serious disparity between the amount permitted to be paid annually as superannuation payout (currently without limit without incurring tax), and the position of the pensioner with extra income from work, who has pension included as taxable income and is then taxed at the going rate on the total of pension plus work income. See Step 1 for clarification on the reality that a government pension is a paid for right - thus there should be no disparity between pension + earnings and superannuation when it comes to tax - especially since pension has been put aside at full tax rate already.

    Step 5:- In accordance with the above - set a tax-free threshold for all retirees, and impose a regime of income tax according to the going rules for income generated above that threhold ONLY.

    Step 6:- Bring all superannuation schemes into the same basket and ensure that none is excessively privileged in any way (that's the big one for politicians and their mates - they prefer their massively preferential systems, along with that of public servants).

    Step 7:- The entire new system is to begin from Day Zero - where this disadvantages anyone, a review panel will be established to resolve difficulties.

    Been considering outlining this for a while - just haven't had the time or the energy.

    Extra input welcome.
    Peterrj
    3rd Jun 2015
    5:30pm
    Trebor, you also make a lot of sense item 1: There should be an unconditional acceptance that those who have never worked in their entire life are entitled to receive the full pension from tax collected from those who have paid taxes all their working lives. How could anyone disagree with your first principle. You have my vote!
    Anonymous
    3rd Jun 2015
    6:38pm
    Sorry, Peterrj, you've lost me! Why should people who have NEVER worked in their entire life be entitled to a full pension funded from tax collected from those who worked and paid taxes all their life? If someone didn't work because of disability, illness, etc., sure - look after them well from the taxpayer's purse. But if they were capable of earning, and not genuinely unemployed (which I doubt they would be for an entire lifetime) why should they collect at any stage?

    I agree with Step 5. A generous tax-free theshold should be set for retirees - one that ensures the ONLY people who have to lodge tax returns are those with incomes high enough to afford professional services to prepare their return. Tax incomes over the threshold.

    Importantly, those who struggled to saved for retirement should be entitled to enjoy a higher standard of living than those who didn't, allowing for generous concessions to ensure the genuinely disadvantaged are well cared for. We need to abolish the strong disincentives to saving and the generous rewards for extravagance and gifting.

    Perhaps abolition of the assets test should be considered, replaced with an income test only using a deeming rate to stop people locking up assets in non-returning areas to increase pension entitlements?

    For those who worked and paid taxes, pensions ARE an entitlement - NOT welfare. The Government needs to stop its dishonest rhetoric and acknowledge its obligations to support retirees properly, while removing the obscenely generous benefits for the richest.
    TREBOR
    3rd Jun 2015
    7:56pm
    And exactly where are these people who've never worked one day in their life?

    They don't exist, unless they are like the girl who has her parents to care for her (for now) who comes to the club in a diasility van they bought and in a wheelchair.

    By jeez some of you are a hard-hearted lot.
    TREBOR
    3rd Jun 2015
    8:06pm
    Permit me to explain it to you gently. All governments here are socialist - not bothering to discuss their 'ideological' differences here and now. ALL governments take a portion of income tax from all contributors, and dedicate it to Social Security

    Social Security covers all from a common pot. As any great leader will tell you ( and I will) - not ONE of my people goes without their fair share of the pot that is there for all. NONE of my troops gets anything more from that pot than any other.

    Therefore - a person who has never worked one day in their life, for whatever reason, is as equally entitled to a share of that pot as any other.

    There are countless reason why people do not work - in today's job climate, the reason is obvious.... dismal mismanagement of the series of pots that are supposed to feed the tribe.
    TREBOR
    3rd Jun 2015
    8:15pm
    Rainey - I think Peter was being sarcastic - if entirely misdirected. I know nobody who lives without working by choice.... those in that situation are those who are doing one hell of a lot lf lifting every day to stay alive - and this will inevitably lead us into a new Underground Economy of drugs, violence, crime, prostitution, and so forth - same as the Great Depression.

    Unless governments here and now start to actually work for their people instead of their re-election chances - we will all go down - and they with us one day. History says so.
    TREBOR
    3rd Jun 2015
    9:57pm
    Oh - BTW - I worked for the Commonwealth Public Service - and let me tell you - they are in now way disadvantage by doing 'public service' (same as politicians are in no way disadvantaged by doing 'public service')- after one promotion from the base I was on a few dollars less than AWE.

    I see zero reason, therefore, for any privileged superannuation scheme.

    In this day and age of perpetual unemployment and partial unemployment - there is not one reason on this earth for such people to continue to receive the fat of the land.

    One superannuation system for all - and it is already paid for via income tax. therefore all other schemes are a bonus and should be thoroughly reviewed AND substantial changes implemented.

    If the government of this country can't support me after my years of relentless effort, loyalty and service - we the people, as sovereign of government - can't afford them!
    Patriot
    4th Jun 2015
    7:42am
    TREBOR
    GOOD ONE !! Thanks for the invite to contribute - That's the spirit!
    I would add some flexibility in the following manner:

    1) As it is THEIR super, their retirement age needs to be set at the "Normally Accepted" retirement age of 65 YO and increasing as our (???) govt sees fit for is - the mere mortals.
    No funds for the purpose of “Retirement” to be drawn before that age without TAX Penalties. And then, only voluntary contributions only accessed!
    I suggest that accounts be (forced) Amalgamated into ONE Account with ONE Company only.
    This ONE account to have TWO Sub Accounts:
    a) – Compulsory Super Contributions
    b) – Voluntary Contributions

    2) NO other outgoings from ANY of their superfunds without paying the FULL BRUNT of the Taxation they saved to SINK it into these funds. No "Savings Accounts" with "TAX Benefits".
    Tax to be either "at the time" or "Current" whichever is the highest!
    3) Once item 1) has been complied with, the maximum "Tax Free" fortnightly withdrawal must not exceed the "Full Age Pension" by say 25%. Any more taken from any account (Cumulatively) and rule 2) applies.

    4) These funds (Australian SuperAnnuation Companies) MUST be invested in Australia's Infrastructure rather than in a volatile stock market which can/will collapse at any time with the International Banksters (as the engineered collapse intended) being the only beneficiaries!

    5) Any withdrawal to be "gifted" AT ANY TIME from these accounts to attract the FULL TAX PENALTY

    6) After death of BOTH (if applicable) beneficiaries these funds are transferred to the children with TWO possible OPTIONS.
    a) Funds are PAID OUT in FULL and attract the FULL TAX PENALTY
    b) Or they are transferred to the Superannuation Funds of the children (Voluntary Contributions) and then become subjected to conditions as above.

    7) Compulsory super contributions CANNOT be withdrawn/gifted/”squandered any other way” AT ANY TIME except for the purpose of supporting the Age Pension.

    8) When the Super Account is EMPTY. These people become a “Normal Pensioner” and just “rub Shoulders” with the rest of us “grovelling in the Mud”.
    Sorry about that fellows !!!???

    As the ATO is quite efficient/effective/skilled to "keep Track" of debts owed by students, to keep TALLY of these "Taxation Saved Amounts" should also NOT be a problem!

    I think that the addition of these limitations brings the Super Annuation much more "In Line" with the intentional Purpose and converts this SCAM/RORT to what is should be "A Scheme" that Fulfils the need it was created for
    TREBOR
    4th Jun 2015
    3:35pm
    Now that's what I'm talking about, Patriot - rigorous discussion and positive ideas on the table.
    jeansievers
    3rd Jun 2015
    5:41pm
    It seems to me any money that goes into any superannuation scheme needs to be in a safe environment. I am sick and tired of this casino economy we have to put up with. When you get older you don't want to have to worry all the time about unscrupulous financial advisers and dodgy financial advice from certain banks. One of my other gripes is the aged pension is NOT Welfare, it has been paid for by our taxes and it is part of a social contract between the citizens of this country and the government we elect. We worked hard to do the right thing by society and our children and when the time comes when we can't work anymore we should be able to have peace of mind, for some for the first time in their lives. My next gripe is I am sick and tired of hearing the mantra 'the aging population'. The population always ages and has done ever since humans inhabited the earth. It seems to me the media etc are trying to make older people guilty for breathing. We have been contributing to society, adding to the economy with our labor, brought up children and we deserve some respect. The economy globally is in a mess due to Multinationals rampantly doing anything they want and by corrupt banking practices.
    There is always enough money for wars, tax breaks for the 1%, and the likes of Rupert Murdoch, who pushes out propaganda on a daily basis, bashing the most vulnerable in our society. It's time for decent Australians to stand up for a Fair Go for the people of this country.
    Anonymous
    3rd Jun 2015
    6:25pm
    Well said! Couldn't agree more. We supported past generations of retirees. Why shouldn't we expect to take our turn? The cost to taxpayers to fund retirement is logically reducing as the benefit of employer-funded super kicks in. In 3 decades, a retiring full-time worker will have at least $500,000 in super. In the interim, we who didn't have the benefit of employer-funded super are entitled to expect the taxpayer to look after us in old age. There was a contract in place that we could expect that after working for 40+ years, and we honored our side of the agreement.
    TREBOR
    3rd Jun 2015
    8:27pm
    100% with you....
    Patriot
    4th Jun 2015
    9:29am
    jeansievers
    Good deductions in relation to "Cause & Affects".
    Agree completely
    JOHN T
    3rd Jun 2015
    6:21pm
    I believe mr Murrays comments about the Superannuation system should be acted
    JOHN T
    3rd Jun 2015
    6:21pm
    I believe mr Murrays comments about the Superannuation system should be acted
    peedee
    3rd Jun 2015
    7:43pm
    The superannuation industry is still pushing its mantra that we need to save more in super. They have not understood the ramifications of the new assets test which will see savers stop at $420,000. There is no point in saving any more than this amount as a 5% return on investment plus the full pension and allowances will allow these retirees to achieve an annual sum equivalent to the comfortable life style amount of $55,000 per annum, the same amount that persons with $1 million in super currently achieve through their own efforts. Mr. Murray is right in calling for a wide ranging enquiry. If all potential retirees stop saving at $420,000 the super industry will,be decimated.
    Peterrj
    4th Jun 2015
    12:08am
    The aged pension of a couple is worth a little over $33,000 plus a bit more with other benefits, say $35,000/yr. If you have a Super balance of $420,000 then you draw down on that at 5% which gives you $21,000 plus the $35,000 giving you an income of $56,000. If I were fully 'self funded' and saved $1,000,000 in Super then at 5% my income would be .....$50,000. What's that ... $6,000 less than a person of pensionable age with well less than half of the retiree with $1m in Super. What's wrong with that????
    Anonymous
    4th Jun 2015
    10:25am
    I agree entirely with you Peterrj but unfortunately many DO NOT want to use their own money to support themselves in retirement. They want to hoard it and keep it for their kids.

    I said somewhere on here previously that a person can have a comfortable retirement on $56K a year and I do not subscribe to living frugally just to leave a large inheritance behind when you die. For goodness sake we only pass this way but once and if you have worked hard all your life and you have excess funds, why not darn well enjoy them.
    MacI
    4th Jun 2015
    11:43am
    For interest I did a bit of modelling. For this purpose I assumed 3% inflation and everything indexed at the inflation rate (i.e. Age Pension, annual income, thresholds etc), a return on capital of 5%, and an income of $54K per annum derived from the combination of Age Pension and drawdown on Super.

    A couple with $420K in Super would run out of money at age 86 and draw a total in absolute terms of $955K in Age Pension payments. A couple with $1M would still have money in Super at age 100 and would have drawn $432K up to age 86 in Age Pension payments. To spend their $1M by 86 a couple would spend at the rate of about $72K per annum and would receive about $639K in Age Pension payments - $207K more than if they kept to $54K per annum.

    A couple of observations from the foregoing:
    1) The Assets & Income Tests are a real leveller. The income that can be derived in retirement from the Age Pension and Super by a couple with $420K versus a couple with $1M is way less than proportional to the retirement savings they accumulated.
    2) The new Asset Test will certainly encourage wealthier retirees to dispose of their capital either through a more lavish retirement, especially in their earlier years of retirement, or invest in non-assessable assets such as the family home. As has been stated by a number of commentators the savings that the government expects will likely be circumvented by changes to peoples spending, savings, and investment choices.
    Adrianus
    4th Jun 2015
    12:10pm
    KCI, did you forget to include the capital growth? I see you have a "return on capital of 5%" does that include the growth?
    Anonymous
    4th Jun 2015
    12:27pm
    KCI, my hubby has been drawing down from his allocated pension for 20 years.
    His capital is now more than it was when he started!
    Adrianus
    4th Jun 2015
    1:36pm
    KCI if you include inflation you also need to include capital growth. It's quite usual practice for capital growth to be higher than inflation in projections.
    Also you made no mention of the starting age? Assuming a commencement at age 65 that means your pensioner couple with $420k draws an average pension of $45,476 pa over 21 years? Is that extrapolated using a 3% annual increase or increasing with average wage? Or a mixture of both as is intended by Gov.?
    Somehow I don't think the new assets test will encourage people to "dispose of their capital" if they do it could be the fillip to the economy this country needs.
    We have seen the anger on here from many who do not want to "dispose of their capital" by buying food & clothing etc, so it would be a minor miracle. :)
    Anonymous
    4th Jun 2015
    3:43pm
    Frank, there's no capital growth on money in the bank. You are obviously assuming that all retirees invest in growth stocks (shares or property). They don't! The value of money in the bank erodes with inflation. There's no growth!

    I don't see any comment on the fact that a couple can earn $74000 a year and still get a part pension, yet someone with $825,000 in assets (of which some will be in non-returning personal possessions, cars, furniture, etc) might be earning only $22,500 in interest and gets nothing. Also, no comment on the fact that someone who is asset tested, but has earned income as well, is not assessed on their income. Then there's the issue of ''assets'' that are actually liabilities - like the land we were trying to sell a few years ago that the local Council made unsalable through a stupid planning error. We were paying rates and maintenance, and it was assessed as a major asset - thus reducing pension entitlements - yet it was a major liability. Thankfully, we eventually forced the Council to fix the problem, but what if we hadn't succeeded? And if you have a business that suffered loss and you pay it's debts, somehow Centrelink figures the business debts are an ''asset'' and you suffer pension loss. Of course what you SHOULD do in that case is close the business without paying creditors - apparently!

    The system is in dire need of a major overhaul. It is grossly unfair, illogical, and economically unsustainable.

    As to the argument about living on savings vs keeping them for heirs, I will certainly want to draw on mine to live, BUT those savings SHOULD facilitate a much higher standard of living - not just compensate for lost pension benefits. If you can't be a lot better off after sacrificing to save $825,000 for retirement, why do it? The new assets test seems to me to be denying many the benefit of their savings, putting people who saved much less on virtually the same footing as those who saved more. That's clearly wrong.

    Even choosing to leave money to offspring should be regarded as an acceptable choice and one that doesn't result in discrimination against a retiree in terms of pension payments vs. someone who chooses to simply spend their money. This is where I see unfairness. It's not a case of wanting the taxpayer to facilitate my children's inheritance - but rather I don't see why the fact that I choose to save for my children's future should render me less entitled to a pension than someone who enjoyed similar opportunities but chose to blow their money on gambling and holidays. Why am I perfectly entitled to put $50,000 through the poker machines, or take a $50,000 holiday, then claim a pension, but I can't gift $50,000 to my daughter and have the same entitlement?
    Adrianus
    4th Jun 2015
    6:33pm
    Rainey, most of us work hard for our money. Are you saying there are those who don't want there money to work hard for us? That doesn't make sense.
    Anonymous
    5th Jun 2015
    1:06pm
    Frank, what I'm saying is that having worked hard for our money, we should have a right to enjoy a higher standard of living than those who didn't or who squandered their money. We should not be forced to draw on our hard-won savings just to maintain the same standard of living that those who didn't work and save enjoy, courtesy of the taxpayer.

    This Government is victimizing people for saving if they didn't save enough to be self-sufficient. The assets test - if it is to be maintained (a single income-based means test with minimum deeming rates on assets would be much fairer!) it should be structured such that, at any given time, all retirees who don't have enough money to generate more than the maximum pension (including benefits and returns on assets under the ceiling) at BANK INTEREST RATES should be entitled to receive enough pension to ensure their total income is substantially more than that of the most affluent full pensioner. NOBODY who has less than the amount required - at current bank interest rates - to generate a living wage should be denied the pension. If you go without to save, you should NOT have to use those savings to replace money the taxpayer would have given you if you hadn't gone without to save.
    Adrianus
    5th Jun 2015
    2:20pm
    Rainey, as I understand it, you have a problem with the change process. Not necessarily the fact that poor people are financially supported with welfare. If you had just woken from a 20 year coma you would see it differently. You would see it as a generous and humane system given the difficulties we face. I don't believe that your problems would vanish if we had a positive interest rate yield curve with a 3 month term deposit at say 10%. So your real issue is that of change.
    My personal view is that there is only so much money available for welfare and that should go to those who cant help themselves regardless of their circumstances.
    Rainey I worked hard and saved hard and was reasonably successful. I always spent within my means and now through matters beyond my control I find myself in the same boat as you. But unlike you, I have seen this coming for at least 6 years, so I have been expecting this austerity. Life is not fair. If an extra few people drop by for a piece of your cake then we all have a smaller piece. That's the bottom line. We cant ask the government to borrow more and keep borrowing, don't stop until us oldies fall off the perch.
    Not Senile Yet!
    3rd Jun 2015
    9:25pm
    You are ALL missing the point.....a review has been called for BECAUSE the tax subsidy for Super is NOT fairly distributed!!!!!
    Too many at the top are receiving tax subsidies that are unobtainable for the average wage earner.....thereby UNFAIR DISTRIBUTION of tax through subsidy!!!
    Even our MP's (The Party Puppets) are subsidized to the extreme of ALL others....not Dollar for Dollar (100%) But TWO Dollars to their ONE Dollar (200%)!!!! OUTRAGEOUS!!!!
    This Super Scheme needs to be SHUT DOWN immediately!!!!
    And let's not forget....BOTH PARTIES allowed this Super Scheme to come into being to benefit their Party Puppet MP's!!!
    Review by anyone that is aligned with either Party would only hand down another Corrupted Version......it needs to reviewed by Independent Panel of Judiciary that are not accountable to any party for their decision......ie Judges are appointed for Life and cannot be removed by either Party or Government!!!
    As for the Rest of You commenting here.....remember this....The Party representatives standing for the Next Election...be they Liberal or Labor.....have SOLD YOUR VOTE to the Party Machine Back Room Policy Makers.....BEFORE they have even been elected!!!
    That is Corrruption...ie they cannot represent YOU if they have agreed to represent their Party!!!!
    SO STOP GINVING THEM YOUR VOTE!!!
    NEXT ELECTION.....REVOLT AGAINST BOTH OF THEM....VOTE FOR AN INDEPENDANT....or The Independent Party (who guarantee their elected MP's the right to vote for their constituents on every issue) which does not make MP's follow a Party Policy!!!
    If you want change....FIRST YOU have to be the instigator of it!!!!
    You can do that by changing the way YOU VOTE!!!!
    TREBOR
    3rd Jun 2015
    9:50pm
    Already covered that in my five point scheme, NSY - we are on the same page.

    I haven't voted for the major parties for years now - for all the same reasons, but basically because they do not uphold the rights of the ordinary people, but rather view their position as one of control rather than service, and of self-enrichment as a right, regardless of outcomes from their policies.
    Patriot
    4th Jun 2015
    7:02am
    Not Senile Yet!
    The only thing I disagree with it that it is called a "Super Scheme".
    Its real designation is/should be "Super SCAM" as only the "Well-to-Do" are able to reap the benefits it provides.
    TREBOR
    3rd Jun 2015
    9:41pm
    Many solid opinions here - and I think I see a very strong trend..... or two...

    Perhaps the future of this country lies in the hands of its older citizens....... we may need to move and organise.... get going and tell those who are holding the reins what is real for a change.
    Patriot
    4th Jun 2015
    6:59am
    Only if we get off out butts and do something about it !!!

    Mature Age Party welcomes new members!

    http://themap.org.au/
    Anonymous
    4th Jun 2015
    8:27am
    sorry wont happen...too much apathy amongst older people in general. Talk and no action...that is how it is.

    Read in the paper over weekend that:

    475 people with more than $10million in super and are getting $1.5 a year income tax free.

    More than 70,000 people with balances in superannuation of more than 2.5 million.

    What was put forward was that there should be a $2.5 million cap on rollover to start an income stream.

    Amounts above would remain in accumulation phase within super and attract a 15% tax .

    Cap non concessional contributions at 1 million over a person's life to prevent very big super balances.
    Adrianus
    4th Jun 2015
    11:37am
    Radish, having marginal tax rates within super funds would be very costly I imagine? It would definitely start a new set of tax minimisation strategies calling for additional ATO staff etc.
    Having said that though, in my opinion it would be ideal to have a single RBL applicable to all members set at 25 times Average Yearly Earnings, which is about $75,000 now. Balances over this amount can remain in the fund but be taxed at the top marginal rate. I know of personally a few people with over $5m and they are nowhere near retirement age.
    You could argue that as in the old days an RBL was based on 7 times FAS because people had become accustomed to varying lifestyles. And that may be the case, but it is not a case for taxpayer support.
    Anonymous
    4th Jun 2015
    12:33pm
    Frank, this article only mentioned taxing anything over $2.5 million. Nothing about marginal rates and yes I agree it would be too costly if they went down that road.

    I am not happy that people are allowed to have huge amounts in superannuation and definitely think there should be a "cap" on the amount that can be built up. Something has to be done and I do not agree with the current Liberal party policy on this.
    Strummer
    4th Jun 2015
    8:25am
    This governments only agenda is re-election so we can expect government by Gallop poll for the foreseeable future.
    Anonymous
    4th Jun 2015
    8:29am
    No matter which party is in power they want to get re-elected...it is a juggling act to get things done and still win the next election.
    jeansievers
    4th Jun 2015
    9:49am
    One issue people are over looking in this discussion is women and superannuation. In the 60s the ordinary worker didn't have superannuation. Women in particular didn't get into the system until the 80s if they were lucky. It was considered a woman could work if she wanted to and many were in and out of the workforce depending on the family situation. There were some politicians at the time saying it was a good idea for women to stay at home with their children and at the time no one could foresee the situation we live in today. If a woman did work most of her money went into the family, like clothes for the children, or school excursions, piano lessons, bikes, skates, whatever. I didn't know any women who gave their 'retirement' any thought and it certainly was not encouraged at that time by the political class.
    The other complication is many women were left on their own with children to bring up due to family breakdown. Many of these women did not get any support from their husbands in regard to maintenance because it was not compulsory for them to pay at that time. I personally know many women who live in very dire situations now in their older age because all their resources and energy went into their children. So when I hear people saying ridiculous things like the aged pension is a safety net not a hammock it makes me very angry and I wonder what planet they live on.
    The aged pension is NOT WELFARE it is part of the social contract between citizens of this country who have contributed one way or another to economic prosperity which people enjoy today. Many people did not have a profession or a tertiary education, many people do not have any assets, or masses amounts of money put aside and it's not because they have been negligent. Do you really think the average person who is a hair dresser, cleaner, truck driver, painter, rubbish collector, gardener, etc etc have masses amounts of assets and money stashed away? People deserve to age with dignity and be respected. Society could not function without people of all different abilities to do jobs that are necessary to keep everything working efficiently. I see people in this discussion talking about inheritances as if everyone has this benefit. I know people who had to pay for their parents funerals because they didn't have the opportunity to amass a fortune they could live off in their old age. There are too many people with elitist, self serving, greedy attitudes blaming decent people for the financial mess the world is in today. Blaming the poor or the less well off will not make it better, the criminals are the extremely wealthy because of their abhorrent greed and their total disregard for the decent people who work very hard all their lives for peanuts.
    Patriot
    4th Jun 2015
    10:10am
    jeansievers
    Well said & "Ever so True"
    Get under the blighters skin !!!
    Get Up Them
    Adrianus
    4th Jun 2015
    10:30am
    To be eligible for the aged pension you must satisfy residency requirements.
    You need to have been an Australian resident for a continuous period of at least 10 years, or for a number of periods that total more than 10 years with one of the periods being at least 5 years, unless you:
    •are a refugee or former refugee
    •were getting Partner Allowance, Widow Allowance or Widow B Pension immediately before turning age pension age, or
    •are a woman whose partner died while you were both Australian residents, and you have been an Australian resident for 2 years immediately before claiming Age Pension.
    If you have lived or worked in a country with which Australia has an international social security agreement, it may help you meet these residence requirements.
    It looks like welfare to me.
    MacI
    4th Jun 2015
    11:07am
    jeansievers
    Well said. I agree wholeheartedly with your sentiments.
    Adrianus
    4th Jun 2015
    3:51pm
    Incidentally, 29 countries have a social security agreement with Australia and as I have just found out the UK is not on the list.
    jeansievers, I wish you were right. I would like a retirement incomes policy which included a generous pension for those who have lived in Australia for 30 years with scaled down benefits cutting out at 10 years. But it is not and sadly that is why it has nothing to do with a person's contribution, economic or otherwise to this great nation.
    Adrianus
    4th Jun 2015
    9:56am
    The words 'tax review' to me always mean a couple of extra taxes.
    Anonymous
    4th Jun 2015
    10:19am
    Enough time has not passed for compulsory superannuation to be fully effective and unfortunately those on aged pensions who have little or no super are bang in the middle of the change. That is how I see it anyway.
    Adrianus
    4th Jun 2015
    11:19am
    Radish I agree. It's consistent change that has got us into this super mess. Given the track record of changes I cannot see another handful of changes being a remedy. Two big changes which got us to this point were, 1) removal of RBLs. 2) the redefining (and legalising) the meaning of instalment warrants.
    Given that the previous government saw an illegal activity and because there were far too many people to penalise they simply made it legal does not give me any hope of future changes being an improvement.
    Because of the immaturity of the compulsory contribution system I would like to see absolutely no changes to super for at least 15-20 years. This time frame would give it a good 45-50 years which means we will see the first lot of superannuants entering retirement with a full working life of contributions and capital growth.
    Anonymous
    4th Jun 2015
    12:41pm
    I agree with you Frank. Unfortunately, some are rorting the super system, just as some are rorting the aged pension system. Change will eventually come about but for those of us in the middle of the change, things should be left as they are and as you said, we will eventually see the next crop of superannuants entering retirement who will be better placed financially to have a smoother transition into their later years of retirement. The aged pension safety net will be used by those who genuinely need it and those able to fund themselves will do so.
    jeansievers
    4th Jun 2015
    3:33pm
    There is a general problem globally withthe economy in the West. It is struggling for various reasons. The vulnerable in our society are under attack all over the Western world. The mega rich have decided they want to take us back to a feudal society. Transnational corporations are dictating monetary policy, so this is way beyond the argument about who you vote for, Labor or Liberal. The real issue is what sort of society do we want to live in. A fair and decent one or the survival of the 'fittest' mentality? Greed and looking out for oneself has been promoted over the last few decades, with a good dose of propaganda to promote that view from the media, which is owned by the richest 1%, which only pushes their agenda which is to maximise the profits of the multinationals. We have been trained to turn against each other and we are arguing, in the real scheme of things, about peanuts compared to the wealth of the mega rich.
    Our society has unbelievable wealth but it is being changed to take away the wealth off the middle class and distributed upwards to the very rich. This will only increase the number of people at the bottom of the income pyramid. Everything is up for grabs your pension, house, social security, education, healthcare, aged care. If you can't pay for these things too bad.
    I am not pretending to have answers to these worrying developments but one thing I do know is we should not be in the business of the blame game against our fellow Australians. The real game is global and people must realise we are losing our sovereignty to global Multinational Corporations which have most of the power, not the politicians.
    Multinationals now have the ability to go anywhere in the world to get the cheapest labour possible so they increase their profits. The system has become corrupted, one example of this are the banks. Some people in our society get paid such low wages they go and get credit, which they can never pay off just to make ends meet. These people will never have enough money to retire with dignity. What is happening to us is just the beginning of a very nasty system indeed. My main worry is for my children and grandchildren. We are all vulnerable to these forces unless you are part of the 1% who have unimaginable wealth.
    jeansievers
    4th Jun 2015
    5:58pm
    Somewhere in this discussion I read: People who don't work should not get the Aged Pension.
    Where do you start on answering this statement? There are many reasons why people don't or can't work in the paid workforce, just off the top of my head disabled people, people with mental illness.
    There are people in the community who do volunteer work, some do it because they have to to receive payment from the government because they are deemed to old by employers but many because they are passionate about doing things in the community like coaching soccer, netball, football, swimming, artistic endeavor etc These people have a passion for these pursuits and want to help young people to pursue these activities. This statement reflects an obvious blindness to the way society and human beings actually function. If people stopped doing work for nothing our society would be much poorer and very bleak indeed.
    There are others who are passionate about helping people, healing the sick, helping the poor, or helping the homeless, or helping groups that are not part of mainstream society, for whatever reason. People are at their best when they do thing from their hearts with passion and not everyone lives their lives in the pursuit of riches for themeslves. It is possible and necessary we contribute to society in different ways not just do things for financial reward for just ourselves. Of course paid work is important but not all work can be valued because you are paid by a company etc.
    We seem to have lost our moral compass in the 21st Century to everyone's detriment. It is an insidious idea that people who can't/don't work won't get an aged pension. This happens in the US where half the population lives in dire poverty. Do we want a system like that in Australia? They statistically have the largest prison population in the world where it is akin to slave labour. Prisons are listed on the Stock Market. This is called making money out of poverty.
    Anonymous
    4th Jun 2015
    6:11pm
    Jeansievers, in a perfect world I would agree with you but we need to put food on the table and a roof over our heads. This country wants to look after those who cannot do so and that is why the pension has to be sustainable. Everyone cannot go on the aged pension and that is why there is an assets and income test so that those who need it get it and those who are able to look after themselves do so whether it be fully self funded or part super/part pension.
    Anonymous
    5th Jun 2015
    1:15pm
    I think we should differentiate between ''can't'' and ''won't'', and also between paid work and valuable work that isn't paid (or isn't paid fairly). Carers, for example, perform an incredibly valuable service but often get no pay for it. They should certainly be looked after in old age. But if a fit, able-bodied person is given the opportunity to work and rejects it to live a life of leisure, that certainly raises questions as to his/her entitlement to take taxpayer handouts. No, we don't want the American system in Australia, but neither do we want to encourage people to think they can have a free ride at taxpayer expense. I know of young men who, at 40, have never worked a day despite being perfectly capable, educated, and healthy. They just don't want to work. Surfing is more fun. I don't see it as ''losing our moral compass'' to suggest that they shouldn't be supported for all of their lives by the taxpayer, especially given that some who work very hard and go without a great deal to try to be self-sufficient are victimized based on claims that there isn't enough money to go around.

    Where I see the real problem, though, is that governments and business haven't recognized that the benefits of automation need to be shared. It's insane to suggest that businesses can reduce their labor force and still increase profit, because of automation, but people still need to work until they are 70. At what? There needs to be legislation that says if a business reduces its workforce through automation, the resulting profit must flow - via the tax system - to support the increased number of people who aren't able to earn a wage. We need to retire earlier, not later - because automation has reduced the workload. But the profits from automation must be shared throughout the community, not horded by wealthy corporations.
    jeansievers
    4th Jun 2015
    6:39pm
    Radish: 'In a perfect world I would agree with you....the pension has to be sustainable'.
    If you deny people who don't or can't work the pension how are they going to live? My main point is not every endeavor can be given a value in dollar terms when considering people's contribution to society. We have become a greedy, self serving community and the only thing of value is making money and amassing a great fortune. The super rich get plenty of handouts and they don't always contribute much to the running of Australia. They have off shore bank accounts and don't even pay tax. Have you ever heard the term human capital, people's contributions are varied and complex, and for the survival of our species this is absolutely necessary. The fabric of society is under attack from the neo conservatives who are working for global transnational companies who have absolutely no concern for the welfare of any community anywhere. Their main concern is making as much money as possible. Do we want to lose our souls to this type of thinking which invariably will lead to a Fascist State. Hitler picked out certain groups and eliminated them because they were seen as inferior beings. There is enough money to sustain our pension in fact statistically Australia pays a very low amount compared to the OECD.
    Adrianus
    4th Jun 2015
    7:39pm
    jeansievers, I wouldn't pay too much attention to what mick says.
    jeansievers
    4th Jun 2015
    7:59pm
    Please consider reading this article which explains the global dynamics which are effecting your finances. http://www.aljazeera.com/indepth/opinion/2011/04/201142612714539672.html Global Capitalism in the 21st Century and Fascism
    iggy648
    7th Jun 2015
    8:23am
    I'm with TREBOR. People forget that age pensioners had an agreement with previous governments of all persuasions that if we paid our fair share of taxes throughout our working lives, they would put away some of out taxes to pay for the age pension on retirement at 65. The superannuation system that people recognise today is exactly the same, except that the payments go to private companies instead of the government. I personally resent having my age pension referred to as welfare. It's my share of a public superannuation fund, paid for by me over my working life.

    8th Jun 2015
    2:41pm
    Of course not ONE person on this site has "arranged" their finances.

    No-one has money squirrelled away under a mattress, in a safe, given money to their kids to enable the pension,seen a financial advisor on how to work the system to enable the pension.
    Paying off their son or daughter's mortgage and being paid back by them "under the lap".

    Pull the other one it has bells on!!

    Of course no one will admit to what I am saying but I know for a fact it goes on.
    Not Senile Yet!
    9th Jun 2015
    8:55pm
    Both the Labor & Liberal Parties only have themselves to blame for the Super MESS!!!
    They continually FIDDLE with it to get back what they have lost by granting tax concessions to those who simply do not NEE them!!!
    Salary Sacrifice with regard to Super should be done away with completely unless that person works for a not-for-profit Charity where their Salary is less than in Private Enterprise.....this being so that Charities can attract suitably qualified people!!!
    As for the Tax avoidance loop hole created by the government in allowing Salary Sacrifice.....it is not necessary and unbalanced.....in that only those on large incomes can afford extra super contributions to avoid tax thresholds!!!
    I note that most Government funded Organisations encourage Salary Sacrifice as a means of tax minimisation or reduction......this is nothing more than a taxpayer funded RORT!!!!
    As for the Retirement Income Restrictions whilst drawing a Pension....they are ridiculous and smack of the Old Penalty System!!!
    They urgently need review to encourage the retirees to continue to contribute on a Part-time basis to our System!!!
    Restricting one's income to $160 per fortnight is a draconian measure from the 80's......most people who have accumulated a wealth of knowledge are more than capable of earning $300 a day in consultant fees alone!!! Why not encourage the to do so by taxing them at a Retirement Rate of 15% instead of the Normal Rate.
    Instead of removing their pension.....make it compulsory for them to have Private Health Insurance instead......thus removing the pressure on Medicare!!!
    As for all the Whingers about the Wealthy .....I am not a believer in punishment for success!!!
    However, the Party Machines....both Labor & Liberal.....would be well advised to stop attacking the retired......and instead reward them!!!!
    A Retirement tax of 15% for all who continue to work after their Retirement date.....be it on Super or Wages.....would be a better way to encourage all who are capable to contribute positively to our great Nation!!!
    Both Parties need to STOP copying America's Political Policies....just because they can.....and come up with some Original ideas of their own that REWARD people.....NOT PUNISH THEM!!!