Universal Age Pension

The budget could be more than $13 billion better off if super tax breaks were scrapped.

Universal Age Pension

The Australia Institute will today release a report showing that the Federal Budget would be more than $13 billion better off if superannuation tax breaks were scrapped and the Age Pension was dramatically increased.

The report’s author, Dr Richard Denniss, told the ABC, “There is nothing in the budget that's going to grow faster than the tax concessions for superannuation.”

"Superannuation concessions are unfair ... the top 5 per cent of income earners get a third of the benefit, and the bottom 20 per cent get literally nothing."

Currently, the Federal Government assists retirees financially in two major ways: superannuation tax concessions and the Age Pension. According to Dr Denniss, the combined costs for these are currently around $70 billion, which is set to increase to $100 billion by 2020, just six years from now.

The radical report suggests scrapping superannuation tax concessions entirely, and instead introducing a universal, non-means-tested Age Pension. This new Age Pension would be increased to give singles $26,273 per year and couples about $39,611. This would, overall, cost about $52 billion each year, a saving of at least $13 billion when compared to the current system. The report says this would also help to deliver money to women and those under financial difficulty.

Superannuation funds are expected to oppose these suggestions, as scrapping superannuation concessions means Australians are more likely to invest in other areas, such as property. The Financial Services Council of Australia has opted not to comment until it has reviewed the report.

Read more at the ABC News website

Opinion: Is self-funded the best option?

Theoretically, the more people are able to, and choose to, spend on superannuation tax concessions, the more Australia will save on the Age Pension. But this obviously has not been the case, as getting rid of superannuation tax concessions altogether and giving every Australian an increased Age Pension, would still save us money (if this report is found to be based on sound modelling).

Those in and entering retirement now would have spent a portion of their working lives in a time when there were no compulsory superannuation contributions. There will be those who ran their own businesses who couldn’t afford to contribute to their own superannuation. Some will have savings and some won’t. So, offering these people financial security, in the form of a non-means-tested, increased Age Pension seems like the right thing to do, especially if it is beneficial for the budget.

It doesn’t have to be forever. Theoretically, there will come a time when Australians who have always paid compulsory superannuation contributions will start to retire, and then that superannuation can start to replace or supplement the Age Pension. But for now it seems that we’ve forgotten the group in the middle, those who worked hard but for whom compulsory contributions came too late, and who face living on a means-tested Age Pension which is already far too low to support a reasonable standard of living.

What do you think? Should we move away from superannuation tax concessions and towards a universal Age Pension? Or should we be encouraging people to fund their own retirements?





    COMMENTS

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    franksmith
    22nd Apr 2014
    10:19am
    Those of us on a part pension will be aware of the constant battle with Centrelink bureaucracy whenever we get a little extra income. Anything to get rid of, or at least reduce, means testing is welcome to retirees and will save the government administrative costs

    22nd Apr 2014
    10:28am
    I don't mind the idea - but too many vested interests in the Super and finance industry to likely see it happen of course.

    A Catch 22 is that those that want to have more than a comfortable lifestyle (~$40K) provided by a pension will then change their spending patterns and the result is lowered tax receipts (income for the government) that the government requires to pay for the enhanced pension.

    You rarely have your cake and get to eat it.
    aly_rob60
    22nd Apr 2014
    10:33am
    Do you really think that we are going to be better off, working until seventy? Most people don't even live that long! Why the hell would you want to work that long, when you have worked ALL your life and would maybe like some time off spent travelling or with your family, while you have a few years left? Good grief! We have paid taxes all our lives, made compulsory contributions to Super (so have really paid TWICE what we should have) and now our esteemed politicians want to screw us AGAIN and raise the retirement age, therefore denying us the pension that we have already paid for! And now they are threatening to raise the Preservation Age on our Super so that they can continue to make money on OUR money and keep us from using it!

    Both my parents died of cancer before they reached retirement age and they paid taxes all their lives too! So where did all their money go????

    Another point worth bringing up, is how the hell our our young people going to get jobs, when the government wants us to work longer?
    Anonymous
    22nd Apr 2014
    11:40am
    aly_rob60 - the government is a safety net - not a bank.

    Pensions are an unfunded liability - that means that we need to have enough younger people working and paying their PAYG taxes, etc, on a fortnightly basis to pay all the pensions and everything else the government spends money on every day.

    Governments change the rules all the time on Super, pensions, etc. We all know that because we see it happening all of our lives. Those people who can need to learn how to consume less over their lives and save and be prepared for those changes and low pension amounts.

    Hope and government reliance is never going to be a reliable retirement plan.
    Anonymous
    22nd Apr 2014
    12:51pm
    Wrong on one point, Harvs - the pension is a bought and paid for option - only bounded by the ability to earn or have assets above a certain level - i.e. potential to earn from assets. pension is a right according to the document I previously posted from the Tax Department on its ' raised tax take to cater for increased welfare spending'.

    Yes - the answer to economic stagnation and demise here is that productive work needs to be developed for the majority - not seeking some (*minces no words here*) pus-soaked band-aid such as raising the retirement age to save a few paltry dollars off the backs of the older and less firm...
    Anonymous
    22nd Apr 2014
    1:16pm
    You can argue pension funding anyway you want, but as it stands it is still an unfunded liability - that is - funded from week-to-week on the backs of those still paying tax.

    There ain't nothin' saved for the purpose waiting in a bank.

    The government will raise the level of taxes if/where they can to try to keep up with the level of welfare and all their other spending. They also borrow because they spend more than they earn from taxes.
    particolor
    22nd Apr 2014
    8:06pm
    Aly... I'm a retired Engine Driver.. Rail.. I can just see My Fireman shovelling Coal into a Boiler at 69 !!.... "Why have we Stopped ?" .. "You lazy old Oaf".....
    Otdave
    22nd Apr 2014
    10:34am
    i am on a full pension and have always wondered why the people who have money because of work, savings or some other method have been refused the pension. because they have been able to save for their retirement why are they penalized? i hope that ALL members of Parliament read the comments and think about what has been written. i also hope that they will at lest talk about the subject. this will stop all parties from bringing up and penalizing the older people of our nation
    Anonymous
    22nd Apr 2014
    10:53am
    Otdave, you raise an interesting point.

    I don't think there would be many who have saved and don't need to draw a pension who would consider they are penalized. To have got to that position they have benefited in other ways through understanding, Super, investing, tax rules, etc.

    Government money is just OUR money - that paid by people still working or consuming - the tax payers. Pensions are paid on money raised every day by the government through taxes. There is NO government bank with pension savings in it to draw on. Like most of the population - governments spend it faster than we can make it (pay our taxes) each day - and therefore have to borrow more.

    If someone is fortunate enough to avoid totally, or in part, getting any tax payer's money in their retirement, there will be little expectation that those still working and paying taxes should work harder and pay more taxes for them to get 'free' or 'entitlement' money.
    Anonymous
    22nd Apr 2014
    12:56pm
    You have to look at this differently. Those with the wherewithal are not 'refused' the pension - they are simply not eligible since they already have enough. In that sense the pension (etc) is a 'safety net', and remember that there are any number of reasons a person could have not much in retirement.

    Joe Idiot (used to be my neighbour) who has the good fortune (??) to remain married for decades, and have a working wife in a desperate work placement climate, and who inherits from his parents - will have plenty.

    Joe Bloggs, as so often happens, alone from age 16 with zero inheritance, may suffer divorce, illness, injury, and an inability to find a job due to Joe Idiot and his wife holding two jobs in their family unit and thus unbalancing the jobs market.

    Is it Joe Bloggs' fault that he has suffered in life and so he should suffer again and be regarded as a second class citizen while Joe idiot and his wife should pull yet another dip into the cash till through getting a pension?

    I think not!
    Anonymous
    22nd Apr 2014
    1:24pm
    Yep - that is a reasonable example of need and why government pensions exist - but an emotive one - and not necessarily statistically representative of most retirees' lost opportunities.

    Many people have had opportunity, but fail to plan and never find out what a government pension actually pays per fortnight.

    It is too late when you have little or no choice - that was planning and saving though slightly less consumerism - starting way back in their 20's.
    Anonymous
    22nd Apr 2014
    1:34pm
    Yes, but my view is that not all situations are equal here, and really - would you suggest that Kerry Packer (RIP) receive a pension as well as all benefits? John Howard/Julia Gillard receive an extra $26k to kick around.

    Point is - there needs to be a cut-off point - and it is only the nuts and bots that are the point of argument here. If we are going to deem all to be equal in terms of government pensions - why not then deem all to be equal in terms of income/assets already in place - and raise the pension to the highest rate of income for the highest bracket - for all?

    No - there needs to be a cut-off point and that needs to be reviewed - as before - when market pressures lower real incomes from investments etc.

    What is needed is a more simple approach to the whole issue and a reduction in unwarranted havens - and more transparent and less self-serving policies that make it better and more equitable for all.
    Anonymous
    22nd Apr 2014
    2:05pm
    Yes - that is what I said in my opening comment to Otdave.

    No-one who has adequate funds will want or expect government assistance. That means there is a cut-off point.

    An obsession with tax rules however is a fruitless pursuit. People innovate if there is incentive and governments globally compete for innovators. Mediocrity is met with contempt by innovators who move their money and/or business to countries or locations where they are supported and wanted.

    People have to get over what they don't understand by learning to do the same and control their own future as best they can.
    unicorn
    22nd Apr 2014
    10:36am
    Sounds like plan too complicated for Joe to understand all he oould say but this is going to cost the country Millions how can we afford it?
    Anonymous
    22nd Apr 2014
    1:36pm
    .. and he'll waste billions trying to disprove it - maybe offer us another 'commission of audit' of the Usual Suspect cronies of mates in 'business' and ghosts of politicians past with no genuine credentials who we were glad to see the end of.....
    particolor
    22nd Apr 2014
    3:27pm
    Rrappler... YES !!
    Fred
    22nd Apr 2014
    10:56am
    This would be great. it should be based on the number of years worked as is the English system. Those who chose to live on welfare because they don't feel like working would have some incentive to work. Those who have worked would be rewarded.
    Wstaton
    22nd Apr 2014
    12:59pm
    Another thing about the UK system is that everyone who is earning have to pay into what is called "Graduated pension contributions" this means that they pay according to what they earn and get a pension relative to this. They can also pay extra and get an increased pension if they wish. Why the heck we did not have a similar system I don't know. The government got the money and invested it into infrastructure and the like instead of the sharks getting hold of it and ripping off in fees.
    Anonymous
    22nd Apr 2014
    1:38pm
    In Cuba the pension is 50% of the highest of the last five years of working life... in that case I'd be on about $130k now.... not $21k. Of course - such a system benefits the better-off again.... unless there is a cut-off.
    Kopernicus
    22nd Apr 2014
    1:58pm
    Well, don't we already do that with super? We pay a certain percentage of income (salary for most) that we elect - the ceiling was 9% for me. So those that earn more pay more in dollar terms.
    However, this is confounded by tax concessions applied to super contributions which benefit the high earners most as mentioned in the intro, at a huge cost to govt income. The UK system does seem more flexible.
    How are the UK pensions calculated, I wonder? As % of contributions? Surely this or other systems may be vulnerable to the vagaries of successive govts.
    KSS
    22nd Apr 2014
    3:49pm
    Actually Kopernicus, it is the employer who pays 9% super - rising to 12% over the next few years. It will always be inequitable in dollar terms because people do not earn the same amount for the same periods of time and never will. That's life.
    The problem is that it has been known for some time that 9% (or 10% or 12%) super will not be enough and many do nothing to help themselves.

    22nd Apr 2014
    11:00am
    Have nothing and you'll have PLENTY.... I am single aged pensioner, no home but Govt studio type apartment, $80 per week...all I get is the pension and I'm able to save $600 of that a month..... ah the good life..SO have nothing and you can have plenty.
    Anonymous
    22nd Apr 2014
    1:39pm
    The good life?
    Anonymous
    22nd Apr 2014
    1:45pm
    PIXAPD - your philosophy is interesting to say the least and makes sense.

    You know how to live peacefully with what you are being provided - and do so without regret.

    It is a great outlook to have!
    Anonymous
    23rd Apr 2014
    8:54am
    When I say 'the good life'.....let me explain...I am what folks deride as a 'God botherer' for I pray and trust the Lord. That means I seek to be anxious for nothing, having food and clothing I am content with that...so to me that is 'the good life' a blessing.
    Swinging voter
    22nd Apr 2014
    11:16am
    I think there should be an indexed universal pension - superannuation was the biggest fraud ever perpetrated on the Australian people. We were once discovered we had been charged outrageous superannuation fund "management" fees by an authorised superannuation insurance company. At the time Mr Sherry was informed of the unlawful over-charging. He wrote to the insurance company but didn't bother to follow through, or use his political authority to get us a refund. With a universal pension, people who work harder, save harder, and plan to make a better retirement for themselves, would not be penalised. When people who are better off are pilloried for receiving a part-pension it makes me wonder why anyone would even bother paying off a home or trying to better themselves. Some couples work 7 days a week for 40 years and then people say oh why should you get any pension. A universal pension (not the complex superannuation system) should be for everyone. Nest-eggs, hard-earned homes paid off with sacrifice and sometimes for security of children, and a comfortable retirement would be a reward for our hardest workers. If they live long enough. 65 was old enough. Manual workers such as electricians, plumbers, concreters, carpet layers etc. are already battling to keep up in their late 50's.
    BrianP
    22nd Apr 2014
    11:17am
    Comment by Brian Parkes, Senate Candidate for the Australian Voice Party

    This plan to increase pensions and SAVE the Government $13 Billion is good financial planning. We need more accountable, responsible Government decisions. Another urgent need is to close the massive tax loophole which currently allows big multi-national companies like Google and Apple to avoid paying billions of dollars in tax. This in itself would solve problems like pension funding and stop Government cutting help to at-risk people. More about the Australian Voice Party here http://www.australianvoice.org/
    particolor
    22nd Apr 2014
    7:38pm
    I'm starting to Like Clive Palmer More and More !!! I heard today on the Radio the Old Age Pension should be raised another $5.000 per Annum !!.. Yes !!! I'm starting to like Clive More and More !!
    darolcavanagh
    22nd Apr 2014
    11:57am
    I suspect a universal non means tested pension is the way to go. This doesn't prevent those who can from buying other pensions as well, but gives a floor for those that can't or won't. As far as super pensions are concerned for those who get them from non contributions or self sacrifice then these should not be taxed going in (pleasing the insurer to be able to use cheap money, government and enterprise) but taxed as full regressive tax when it becomes income

    22nd Apr 2014
    12:37pm
    we could also scrap negative gearing and restore capital gains tax to its pre-howard-government rate. would save even more billions.

    unlikely to happen as the liberals (and laborals) like to protect their rich mates and voters.
    Anonymous
    22nd Apr 2014
    1:04pm
    Totally agree.
    student
    23rd Apr 2014
    8:58am
    I too agree, kika. Look at who makes our laws .... the elite (rich)The chance of them doing anything to lower their pensions (ie; tax)is highly unlikely. It is a lot easier to tax those who deserve help than tax those who are fortunate. Rather than take from those at the bottom of the heap, why not tax those with multi million pensions?? The few have the majority of wealth. Bring on the mining tax :)
    hyam
    22nd Apr 2014
    12:41pm
    If the govt was the sole manager and investor of super funds, we would be able to invest these monies in infrastructure and fund a universal pension scheme from the income from these infrastructure projects. No longer would small funds be at risk and profiteering by fund managers would be eliminated.
    Anonymous
    22nd Apr 2014
    1:06pm
    IF it were managed properly and not just turned into yet another 'jobs for the cronies' issue, and IF government didn't see the super funds as simply another cash cow.
    Ahjay
    22nd Apr 2014
    8:09pm
    The government would then privatise the projects and their rich mates would take the profits in there obscene salaries .
    student
    23rd Apr 2014
    9:07am
    I have no problem with our pollies pay, but I do have a problem with their lurks and perks.

    hyam, I can remember when the Fed. Goverment was the sole superannuation fund. Super was taken from your pay and held by the Government. We paid for roads and stuff because the Gov. used our money. We paid for it . Sure the Gov. still had to borrow, but our Super was guaranteed. Now people who do not have the capacity to understand investing, are forced to 'take care of their own superannuation'. Wrong, wrong, wrong.
    Chat
    22nd Apr 2014
    12:41pm
    I know a person who lived and worked in New Zealand before coming to Australia and living and working here. Now at retirement age she is thinking of moving back to NZ because she will get a better pension there. Apparently their system is that everyone receives a basic pension --- my understanding is that it is better than here --- but that everyone then pays tax on any income they make above the pension.
    I think this sounds like a very equitable scheme and wonder why it has not been considered here.
    Kevie
    22nd Apr 2014
    2:55pm
    Yes Chat... In New Zealand there is a universal pension that is paid to everyone regardless of income or assets... this pension is then added to whatever other income you have and you are taxed on the total (in essence the same as any employed person) The result is that administration costs are reduced dramatically and the "safety net" becomes part of the taxation for the higher income earners. Th administration savings are distributed in an equitable manner to those who need it rather than the government "administrators".
    Simply logic but then large governments are not recognised for their logic, are they?

    22nd Apr 2014
    12:47pm
    WELL! I see the following:-

    > Can the tax breaks that are so manifestly unfair.

    > Raise the pension (and unemployed etc benefits BTW)

    > Install a universal pension

    > Retain viable limits on income/assets so as to ensure some equality of treatment across the board. (If you are that well off you don't need it).

    I don;t see that as being too hard, and certainly better than the current situation where, as stated, the well-heeled get away with the loot while the majority suffer.

    Self-funded is a risky business due to market fluctuations etc - as many will testify, so a mix of the two - self funded + pension eligibility, reviewed annually(?) is not such a bad concept.

    I would expect the superannuation industry to oppose any such moves - they rake $20bn off it with some lovely 'CEO'/board member etc fees..... which BTW is an avenue of corruption in that the cronies of politicians making the decisions are those in these 'jobs'. Nothing new there and something long overdue for ICAC to look closely at - as seems to be its current direction one step at a time (see Sinodinos and scrutiny over use of political influence to gain an unwarranted post).
    greatgolly
    22nd Apr 2014
    1:03pm
    I am so very, very tired with all this going back and forth over who should get what; how about we look at it all from another angle, an angle nobody is willing or perhaps can do anything about, that is politician's pay and perks.

    Polies have had it too good for too long, they get such a lucrative pension when they leave politics, but they collect that pension and still get another position getting a new salary and still receiving their political pension, but can the ordinary worker do that, no by hell they can't! A pollie's family can get free travel on the taxpayer, some up to $700K a year, can an ordinary retiree get that or the man on the shop floor, no by hell they can't! I remember a politician that served 3 terms and the constituents only new he was there when elections came around, tried to make an appointment with him many times, but he was always too busy or not there or away on holidays, is that serving his constituents?

    Hyperthetically, if we abolished State Governments, our debt would be cleared in one government term; we are so over governed it's not funny. I agree we need to reign in the welfare costs, too many people who could work are not working and are either on the dole while surfing every day and lapping it up, or there are those who are on disability that should not be and many who should be are not and can't get it, the system is so badly floored even Hank Jongan can't fix it even though he says the department and its super computer will!

    I don't know what other people think about what our politicians get payed, but one person told me that he feels that when they enter politics, if they're not millionaires when they get in, they are when they get out, true or false? To my knowledge, only two politicians have tried and soon quit and went back to their luxury lives as taxpayer funded politicians!

    I really feel there needs to be a Royal Commission into politicians pay and perks and it must be an open and public inquiry, not until such an inquiry is done, will the voter really know what government in this country is costing. Over the year I have written to so many politicians in regard to this, and not once has anyone replied, and it's not just Labour or Liberal wasting money, look at what the Greens member has payed out on luxuriating her offices which was over $700K and she was just one of many; I wish someone would spend that on updating my home!

    Well, I've said my piece once again, I doubt I will get many responses as nearly all voters are either blind to what's going on or just don't care; it's not that we can't do anything about it, if enough people stand up and say enough is enough, then the taxpayer will always be ripped off and pensioners will eventually pay the ultimate price and that will eventually mean more poverty and more people living on the street, or even spending their retirement hold up in their house afraid of what bill is coming in next and which can I afford to pay!
    Anonymous
    22nd Apr 2014
    1:09pm
    What can I say? You've said it all..
    Anonymous
    22nd Apr 2014
    2:44pm
    Some of your points are valid - but you are trying to change the ruling elite who make the rules AND there are just over 800 politicians. A mere trifling in terms of numbers. Give a raise in pay to them, and as a group, what is a few million here and there over say a ten year period?

    The real issue is the bureaucrats who are coming up with great ideas for saving money and pulling the politician's strings behind the scenes. AND these are the people who cost the tax payer the most.

    Have a think about hierarchy of costs and how bureaucrats think.

    There are about 2m public servants in Australia – and understand this - MANY public servants get paid pensions that are as good as if not MUCH BETTER than politicians.

    There are about 2.3m age pensioners in Australia.

    So - if you are a public servant, you keep quiet about your boss, and DEFINITELY your own benefits - but 2m pensioners are an easy hit – take/delay $20 per week = 2.3m x $20= ~$2.4 billion saved.

    But there are nearly as many public servants as age pensioners – and many will get pay scale increases annually through promotions, etc. The costs of public servant wages go up enormously every year. How much noise do you hear about that from the people who serve you?

    You are attacking the wrong group – it is the huge number of bureaucrats (public servants) and their benefits that you want to put the fear of God into!
    particolor
    22nd Apr 2014
    7:47pm
    That was Great !!.... Give Yourself a Pay Rise !!....
    Anonymous
    22nd Apr 2014
    11:51pm
    Good point, Harvs. Take a jelly bean and a gold star.
    aly_rob60
    27th Apr 2014
    10:40am
    I agree with greatgolly....let's see if the pollies are sincere enough and honest enough (LMAO that's not going to happen) to endure an inquiry and take pay cuts as a consequence. I do live in an idealistic world, don't I ?
    Nightshade
    22nd Apr 2014
    1:12pm
    ISN'T TONY ABBOTT & HIS MOB - THE POLITICAL ARENA OF AUSTRALIA STUCK UP IN THEIR OWN LITTLE COMFORT ZONE TOTALLY OBLIVIOUS
    WRAPPED IN THE FALSE SENSE OF SECURITY THEY CALL THEIR CONTROL OF THE WORLD & AUSTRALIA -
    ALONG WITH THE INEPT & CLINICALLY BLIND - HALFWIT BANKING SECTOR OF AUSTRALIA.

    GREAT NEWS :-
    www.hangthebankers.com
    Article - BRICS to create alternative to IMF and World Bank.

    The Federal Reserve US - leave your umbrella there & you will never see it again - no one in their right mind would do business with them - ever - the Federal Reserve US is accountable to know one - they are untouchable.

    The Banks Globally - TODAY CANNOT BE TRUSTED
    NO ONE WILL EVER TRUST THEM AGAIN
    SO HOW IS BUSINESS GOING TO HAPPEN ?
    IF THERE IS NO BUSINESS WE ALL PERISH
    BUSINESS MUST HAPPEN THEREFORE THEY WILL FIND A WAY
    IT WON'T BE WITH ALIBAAB & HIS 40 THIEVES I CAN ASSURE YOU.

    Everyone is looking forward to a banking sector they can trust & rely on & not a banking sector that will lend them - shaft them & take all their assets.

    AS IS HAPPENING IN WESTERN AUSTRALIA TO AUSTRALIA'S WHEAT FARMERS
    ASK THE CEC PARTY THEY WILL TELL YOU WHAT BASTARDRY IS GOING ON IN W.A.
    moke
    22nd Apr 2014
    3:39pm
    Perhaps if the government were to make retirement earlier instead of later there would be jobs for the unemployed if people moved up a rank at the work place. More pensioners or self funded retirees and less unemployment to pay. I have to wonder if our government have ever wondered what will happen when all the workers reach retirement who will pay the taxes then because it seems that unemployment today is the easiest way for young people to rort the system and many of them enjoy doing nothing except having babies collecting more tax payers money and teaching the little ones to grow up as more unemployed. I THINK IT IS WAKE UP AUSTRALIAN GOVERNMENT AND LOOK AFTER THE COUNTRY AND THE PEOPLE WHO HAVE WORKED AND STILL DO TO PAY YOUR BIG BICKIES.
    greatgolly
    22nd Apr 2014
    4:37pm
    Well Harvs, point taken, in that case, we need to have the fat cats made into coonskin caps, and put the rest on a diet to thin them all down, maybe then we can look after the real people who need financial assistance, but I didn't think we had that many public servants, as each of the previous governments cut the public service.

    Thanks for that, I have learned something today, so that makes the day worthwhile!
    particolor
    22nd Apr 2014
    7:55pm
    I wonder what Sir Harry Hockey is around the Sir Cumferance ??
    Mak
    22nd Apr 2014
    4:44pm
    @Harvs. You are very circumlocutory with all your answers except the correct answer to the problem which is simple.

    The retirement pension was introduced as a tax on wages with approximately 7% put into a Retirement Fund.

    People of pension age today contributed to the fund when they started work but the fund was grabbed by the government and they changed the rules to:- the wage-earners of today and from now on will pay for pensions on retirement.

    The point is, the portion which was used for pensions did not lower the amount of tax on wages, and therefore people paid more than they should have paid.

    This boils down to theft by the government.

    There is only one direction for fair play and that is, wage-earners are the people who made Australia what it is today by the hard work and great effort, the input of governments was to use the taxes for infrastructure to continuously improve everyone's life-style, looking after the sick and infirm and education of children and young people.

    They made decisions outside their jurisdiction to the detriment and monetary demise of Australians.

    If we had near-full employment by independent means = Made In Australia, everything we need and use, there would not be the problems we have today.

    For this demise you can thank Gough Whitlam for signing the UN Lima Agreement where we give 20% of our manufacturing to Third World countries, and also thank Bob Hawke and Paul Keating for increasing the give-away to 70% without any authority, just to ‘look like good guys’ for the UN.

    Governments are in place to care for the people in the country they govern, they do not have the authority to give monetary hand-outs for the benefit of people in other countries.

    Governments are still, as always, servants of the nations' people and should not have the gall to change the basic rules of governing without authority from their masters.

    This happens because the majority of Australians are apathetic towards the most important thing in their lives, the way they are governed.

    This is causing problems with affordable retirement and comfortable living after a life of hard work, plus raising a new generation, and contributing to the betterment of Australia.
    Anonymous
    22nd Apr 2014
    5:30pm
    Periphrastic’s are definitely not one of my virtues.

    The Federal Govt. aged pension was designed around what was already in 3 States at the time and implemented in 1908. It was means tested and only available to those who were in need. That is basically what it still is over 100 years later. There have been many changes since - one might have been they were actually trying to fund the aged pension instead of having it as an unfunded liability.

    Regardless if they did put 7% of something away at some point since 1908 - it was NEVER anyone's money specifically - just a blob of funds on a balance sheet earmarked for the aged pension that then gets used somewhere else - because goverments can.

    The government has and will ALWAYS change the rules. We ALL know that is what they have done forever and will continue to do for ever more.

    History constantly teaches us the rules of the game. You fail to plan accordingly - at your own peril.
    moke
    22nd Apr 2014
    8:03pm
    Mak Seems strange to me that 70percent should go to third world countries when most everything you purchase to day comes from CHINA, that does that mean we should consider CHINA as 3rd world. Sounds like a money scam to me but when are the government not doing things to make them look good to the rest of the world. Be nice if they wanted the people they are supposed to govern to think they were good guys and were interested In looking after the population of Australia
    Jurassicgeek
    22nd Apr 2014
    4:56pm
    naa yur dreaming if you think this government will do anything for pensioners...too many vested interests....but just once I'd like to get to eat my cake before some lowlife steals it..
    adbob
    22nd Apr 2014
    7:00pm
    Brian Toohey has been saying this for years in the Australian Financial Review and elsewhere.

    The AFR is paywalled but if you google "Brian Toohey age pension" you'll find lots of his stuff.
    particolor
    22nd Apr 2014
    8:00pm
    Idle Chatter !!.. I prefer Reich's..BURP !!!
    AlbertC
    22nd Apr 2014
    7:59pm
    hooray some one came up with a good idea ROYAL COMMISSION maybe we could a partition and send it to the new governor general surly he would have the power to call it over pomy abbot if it got through the coffers would be over flowing .have a nice day .
    particolor
    22nd Apr 2014
    8:10pm
    Sir Peter might have Him Court Marshalled ??.. YODEL AY DEE HOO !!!!
    MarLin
    22nd Apr 2014
    8:09pm
    Why don't we ask 'Wine Barrel' O'Farrell to donate some of the $164,000 p.a. taxpayer-funded pension he'll get if he retires at the next election - as he surely will!
    particolor
    22nd Apr 2014
    8:15pm
    FOR SALE ..Ancient Bottle of Corked 59 Plonk!.....Best Offer...
    Blossom
    22nd Apr 2014
    8:11pm
    What a lot of rubbish. We have already be taxed on Super over & over again. Taxes on wages that we paid super out of. They tax our Super +again if we use any of it before retirement age. I hardly call that a concession.
    Why do we scrimp and save, put money into super to have the Govt. penalise us??.
    particolor
    22nd Apr 2014
    8:21pm
    Now Now !! Settle down !!... You wouldn't like to see them go without a 70 Grand Pay Rise( again) next Year !! Would You ??......
    The selfishness of some people on this Site ??
    Wittyone
    22nd Apr 2014
    9:10pm
    I am a 63 year old Australian in London. I dutifully pay non-resident tax. From age 60 the UK has generously paid me a part pension (non means tested as I paid in National Insurance briefly in the 70's and for 7 years while working as a nurse casually). I have a Freedomcard for free travel on bus and Underground -
    everyone gets this at that certain age in London! I can travel where I want and don't have to be accountable.

    Not like the Centrelink stories I have heard at home! I receive free prescription
    Medications if required.




    I have been home recently but doubt I could afford to live in Melbourne right now as I don't want to have to work full time.
    My country will request I pay a huge capital gains tax on my inner city property(divorce settlement) if I try to downsize and live off the extra when I come home. Not much of an incentive other than to go on the pension and be treated like a criminal being told you must live continuously in the country for 2 years when you return!!!
    Anonymous
    22nd Apr 2014
    10:25pm
    Australia has ~$A400 billion of government debt and the UK has ~$A2.123 TRILLION of government debt.

    If people will lend you money - you can keep the population happy and in better conditions as you see in the UK - until no-one will lend you any more money that is.
    Capn Dan
    22nd Apr 2014
    10:24pm
    In the post war days, citizens paid for their age pensions separate to their income tax. Then it was combined. So paying for a decent life and not getting it is an affront to human and mature person dignity. It is not a 'handout' if it has been paid for. This must rate in constitutional law as a swindle by one of any government that has been in power. Centrelink must be big business for Tasmania, but the system need a good clean out. Having said that though, to be fair my local people are really good; they battle the stupid unwieldy system the best they can. After my expenses, I am looking fondly at the nice dog mince at the local supermarket. Nice with some on-sale spices. My current favourite is VetPro5 Kangaroo with Vegetables consists of bite sized chunks containing kangaroo, chicken, turkey, high protein cereal blend, vegetables (peas, carrots, beetroot), vegetable oils, gelling agents, vitamins & minerals, marigold extract, yeast, salt, parsley, fish oil, green lipped mussel extract. Second on my shopping list would have to be Coles Cat Mince Kangaroo 800g for a mere $3.99! Both these products are available in a knob/roll package so it may be easily cut into a gourmet burger with day old toasted rolls and some sauce stolen from local fast food shops. With all this bounty at our finger tips and whatever I can score from the bins out the back I can sit back and live the good life. I might not have a Gold pass for a ride to somewhere on an areocraft, but I can still listen to the wireless and savour a jolly good meal with what the government reckons they 'give' me after a live of work. I would be fascinated to hear what others have on their plate and perhaps Life Choices could have a cooking page for those of us on the meager money the government have leftover from their Gold star business class world wide extravaganzas.
    Anonymous
    22nd Apr 2014
    10:55pm
    Sorry Capn Dan - you have the time-frame right - but how it was established it is not how you remember it. There was NO link between contributions and any pension benefits. (see 1945 quote taken from link to article below)

    All is not lost - educate your grand-kids or someone else's about why they should not to rely on the government for the age pension.

    Quote...
    1945 Chifley Government introduced an additional
    levy on personal income tax which, along with a
    payroll tax from employers, was credited to the
    National Welfare Fund. There was, however, no
    direct link between contributions and benefits and
    the pension. The National Welfare Fund, whilst
    set up as a means of establishing a base from
    which a national superannuation fund could be
    operated, was in practice merely an accounting
    device until its abolition in 1985.

    http://www.aph.gov.au/binaries/library/pubs/bn/eco/chron_superannuation.pdf
    Aurora60
    23rd Apr 2014
    12:06am
    we've all just been in the wrong job - His political career came to a premature end in humiliating circumstances, but Barry O'Farrell can expect to live very comfortably when he returns to civilian life thanks to the state's taxpayer-funded parliamentary superannuation scheme.

    The former premier will receive a pension of about $160,000 a year for the rest of his life, according to an analysis by Greens upper house MP John Kaye.

    Alternatively, if the 54-year-old chooses to take his superannuation entitlements as a lump sum, he will receive $1.6 million.
    student
    23rd Apr 2014
    9:21am
    can you get/redeem $1.6m?? I would have thought you only get your full payments in installments.

    23rd Apr 2014
    10:35am
    The Govt not only supply my unit to live in they then supply the money for me to pay them the rent, and not only that they then supply me with rent assistance; I mean what more could I ask for.....and folks like me are supposed to complain ? come on now..... some people in this country do not know how well off they are
    Waytoopoortobeme
    22nd May 2014
    8:50pm
    U R one of the Lucky. Unfortunately Government rentals are becoming fewer & far Btween. Many Families spend years on waiting lists, in the interim homeless, couch surfing,sleeping with kids in cars etc.
    Sometimes the only option is to rent privately but even with rent assistance, Rents are abhorently Expensive. So in this situation they live, no they survive, Just.
    Fred
    23rd Apr 2014
    1:42pm
    The UK Has a basic pension which almost anyone can claim. Hence the discontent in the UK.
    They also assume a working life of 33 Years for a full pension it is then calculated as 1/33rd
    of the full pension for every year worked. This is not means tested

    23rd Apr 2014
    7:06pm
    What pension cuts would they be...must be the invisible unseen kind, for as yet NOTHING has been done.....the scare mongers are having a field day with their assumptions.

    24th Apr 2014
    12:24pm
    WHAT PENSION CUTS? has the treasurer said things like..' we will cut the pension by $50 a week, or by $30 or $20' ... what cuts are we talking about ? what changes to pension payments ? COME ON YOU LOT, stop wanking and answer the question.... WHAT CUTS to the pension ?
    RichF
    24th Apr 2014
    3:50pm
    Not a bad idea, as long as the Tax Office can cope with the fact that they will have to grab most of the pension back from the rich end of town. All high earners/retirees would have more than enough to live on anyway and could afford to lose quite a bit if this is truly 'universal'. Don't forget that the last government brought in a 'You won't have to pay tax if you are rich enough to support yourself' arrangement which is grossly unfair to ex middle and low income but now pensioner people.
    Capn Dan
    28th Apr 2014
    7:58am
    I am indebted to 'Harves' for clarifying and informing my comment below. Ta

    28th Apr 2014
    12:37pm
    By this time next year I will most likely be getting $1000 a fortnight as pension.
    Travellersjoy
    10th May 2014
    9:45am
    Love this idea.
    It simplifies, makes fair, saves money, hard to rort, and, best of all, might be enough to live on.

    13th May 2014
    9:19am
    I'm a pensioner and I'm OK.....