Retirement income review could lead to pension tweaks

Would a pension rate linked to an individual’s working life salary be better than total reform?

letters on blocks spelling out pension

The government’s interim report on retirement income may have shone a brighter spotlight on superannuation, but one of the beneficiaries of this inquisition into Australia’s retirement income system could be the Age Pension, says Accountants Daily.

The consultation paper released last week by the three-person panel analysing the system highlighted Australia’s high rate of pension reliance, with 68 per cent of retirees on the pension compared to around 30 per cent in other OECD countries.

This number had declined from 80 per cent in 1999, with the number of those reliant on the full Age Pension dropping while part age pensioners remained roughly the same.

This decline in numbers may be related to the superannuation system coming closer to reaching maturity, with many newer retirees having the benefit of almost 30 years of compulsory superannuation contributions, as well having been the beneficiaries of the property boom and generous tax concessions.

However, the reviewers pointed out that intergenerational inequity is a potential issue in the retirement income system, saying that “when one generation is required to fund their own retirement as well as the retirement of a previous or future generation, they may view this as inequitable”.

“Age Pension expenditure is funded from government revenue, affecting the tax impost on working Australians. Australia’s ageing population means there will be a declining number of workers for every retiree. It is therefore important the retirement income system does not place an undue fiscal burden on future generations,” stated the paper.

It also highlighted how Australia’s system has a flat pension rate not linked to an individual’s previous salary, unlike those of markets including the US, Switzerland and Norway, making the system fairly unique among developed nations.

The way Australia’s pension system is structured means the rate of expenditure on Age Pensions compared to GDP is actually well below the OECD average. Australian public pension spending is 3.5 per cent of the GDP, which is half the OECD average of 7.9 per cent.

While a pension rate linked to a person’s working life income in their working life could be preferable to reform the pension system, the paper noted the complications of adopting such a system in Australia.

“A benchmark replacement rate in retirement could be set to allow an individual to maintain a similar lifestyle in retirement to that enjoyed pre-retirement. Given replacement rates are usually framed as a percentage of pre-retirement income or expenditure, they may allow individuals to calculate a retirement income goal for their own circumstances,” says the paper.

“A key weakness of system-wide measures of replacement rates is they need to be higher for individuals on low incomes to avoid the risk the replacement rate results in incomes associated with poverty. To avoid this outcome, a different replacement rate could be set for those on higher incomes to those on lower incomes.”

What do you think of this idea? Would you prefer this to a universal pension?

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    COMMENTS

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    panos
    2nd Dec 2019
    9:55am
    sounds good to me but with all think papers the govt wont listen,,,
    Tanker
    2nd Dec 2019
    10:24am
    I don't believe that would be a good system and would be inequitable. Being on a higher income gives greater scope for increased contributions to superannuation which have significant tax benefits.
    The only real problem with our system is the current benefits the well off get which they don't really need. The cost of living in retirement is less than when working and surely extravagant living should not be funded by the taxpayers.
    Rae
    2nd Dec 2019
    12:58pm
    Possibly not but the actual taxpayers should surely get something. Just funding lots of other people is wearing a bit thin. Perhaps some recognition for all the taxes paid , even just a concession card , might be equitable.
    Tanker
    2nd Dec 2019
    10:24am
    I don't believe that would be a good system and would be inequitable. Being on a higher income gives greater scope for increased contributions to superannuation which have significant tax benefits.
    The only real problem with our system is the current benefits the well off get which they don't really need. The cost of living in retirement is less than when working and surely extravagant living should not be funded by the taxpayers.
    VeryCaringBigBear
    2nd Dec 2019
    10:40am
    Bad idea as the OAP is welfare and is only given to those who have no other means of support. If you earn a high income then you should have provided more for your own retirement.
    TREBOR
    2nd Dec 2019
    12:09pm
    **snores**
    Troubadour
    2nd Dec 2019
    2:39pm
    The OAP is not Welfare - we did actually work to earn it!!
    VeryCaringBigBear
    2nd Dec 2019
    3:22pm
    No you don't earn the OAP as people who didn't work get it too. In fact those who worked and earnt the most most likely simply don't get it. If that isn't welfare then I don't know what is.
    TREBOR
    2nd Dec 2019
    5:37pm
    Yes - abandon all those cripples and layabouts on a hillside in winter...

    How many times must I re-post Menzies statement on pension?

    "Pension is not welfare, most pensioners worked and spent a lifetime paying for their pensions. It’s not welfare and, when it was introduced, it was actually meant to be an entitlement.
    “The stigma of charity should be removed from the age pension. It should be an entitlement earned by the person’s personal contribution to the fund,” said a very famous Australian long ago.
    Who? Former Prime Minister Sir Robert Menzies. When? At the time the current pension scheme was introduced.
    Menzies was Opposition Leader when then Prime Minister Ben Chifley announced a National Welfare Fund to pay for pensions, unemployment relief, child endowments, even health care with a 7.5%tax increase.
    Menzies insisted that the Compulsory Contribution (levy) should be kept completely separate; that it should be paid straight into a trust account and not mixed with the general revenue.
    The contributions made by millions of taxpayers over a half century have effectively been “stolen” by successive governments of both persuasions who could not resist the money grab – much like our superannuation funds today!
    The Coalition, supported by Labor and the Greens, has turned 180 degrees from Menzies’ view the age pension is “an entitlement earned by the person’s personal contribution to the fund” and portrays it as charity."

    "In 1945, the Government made changes so all health and social services expenditure – including the age pension ­– was charged to the National Welfare Fund.

    At the same time the Government separated income tax into two levies – a general income tax levy and a social services contribution.

    The National Welfare Fund was not created to save up and invest workers compulsory contributions to be paid back to contributors when they retired.

    Importantly, there was never a direct link between contributions and eligibility for payment.

    An individual did not need to have paid the social services contribution to be eligible for the age pension payments and those who had paid could be denied the age pension because of the means test."
    The Care Bear.
    5th Dec 2019
    8:25am
    It must be somewhat satisfying living in the past.
    VeryCaringBigBear
    5th Dec 2019
    10:17am
    Agree it's time to catch up and live in this century not the last one.
    johnp
    9th Dec 2019
    3:09pm
    TREBOR is right though. Also we should have a universal aged pension which is the simple way and eliminates a lot of bureaucracy !!
    almost a grey hair
    2nd Dec 2019
    10:47am
    No it would be wide open to cheating and what about if you had to retire early due to injury or illness.
    I firmly believe a universal pension is the only way to go, just like NZ's that way everyone gets the same when they turn 65, no doubt it would be 67 here. That way if you were successful enough you could live in a million dollar house without the flotsam and jetsam whining that you are getting more than them.
    The gov could then close half the Centrelink offices and you could have merely pop ups in suburban malls for other assistance.
    There is also a lot of cheating in this country such as couples presenting as couples but claiming welfare at the single rate, I know several myself.
    almost a grey hair
    2nd Dec 2019
    10:53am
    If the super guarantee was dropped and employers were free from the burden of having to fork out an extra 9.5% on wages and salaries, perhaps they could take on more employees as more able to afford it thereby reducing the amount spent on Newstart payments.
    sunnyOz
    2nd Dec 2019
    11:01am
    Stupid notion to drop the Super Guarantee...might save on Newstart, but the the Aged Pension amount would skyrocket, and the government would push the eligibility age higher. And the highest group of people on Newstart - those aged over 50 - employers will still not hire them.
    ex PS
    2nd Dec 2019
    12:46pm
    We need to take into account that in many cases increases in Super Contributions are funded by the employee in the form of having renumeration increases paid directly into Super accounts.
    I would find it hard to accept that the negation of a Super contribution would be seen as anything but an increase in profits by the average Employer.
    Rae
    2nd Dec 2019
    1:01pm
    They could also end tax concessions for superannuation and save $43 billion a year to fund it all.

    People could still save if they wanted extra income in retirement.
    KSS
    2nd Dec 2019
    1:30pm
    Flotsom and jetsome would still whinge no matter what.
    TREBOR
    2nd Dec 2019
    5:39pm
    .. and thinking people who understand real issues and grievances will complain and object strenuously forever....
    Macheke
    2nd Dec 2019
    11:10am
    Bad idea. Age pension is pillar one. Should provide basic living needs. No more no less. The other two pillars SG and private savings give plenty of scope to top up retirement.
    Travellersjoy
    2nd Dec 2019
    11:13am
    The age pension is only funded by working Australians because governments will not tax the very rich or corporations effectively.

    Corporations have taken most of the value added by workers now retired and not returned any of the benefit to us - especially older women who have customarily and conveniently been paid much less than men with no superannuation entitlements except in the public service.

    I am sick of these distortions in the taxation regime being constantly trooted out as if they are set in concrete - instead of just being what the rich and powerful prefer.

    There is no objective reason why the age pension cannot be increased for all pensioners and some of the wealthy leaches getting part pensions dropped off. All that is required is the will to redeem full age pensioners, particularly renters, from penury. Not on the things-to-do-list of the present government who will do nothing to upset corporate Australia no matter how egregious their crimes.

    Economists who are not blinkered by politics and economic voodoo are welcome to come up with more effective ways of running an economy for ALL Australians that doesn't require millions to go hungry, homeless and for ever chasing a dollar to survive.
    KSS
    2nd Dec 2019
    1:31pm
    Wealthy people do not get the age pension! They provide for themselves.
    TREBOR
    2nd Dec 2019
    5:41pm
    Wealthy people are entitled to the OAP, they simply do not fit the requirements to get it.... EVERYONE is Entitled™ to OAP, and its payment is in accordance with rules as they stand.

    Our argument is that the rules as they stand do not fill the bill properly, and that massive change is required into 'retirement packaging'.
    thommo
    2nd Dec 2019
    11:19am
    We want a government which will bring in a universal age pension....Just do it damn you.
    Mad as Hell
    2nd Dec 2019
    1:46pm
    Here here
    GeorgeM
    2nd Dec 2019
    2:47pm
    Absolutely! They need to stop wasting everyone's time with a variety of foolish ideas.
    libsareliars
    2nd Dec 2019
    4:20pm
    Spot on thommo!
    leek
    2nd Dec 2019
    11:45am
    Terrible idea. Prior to having children I earnt around $52K a year which was good $$ back in those days. Then I went back to work 2-3 days a week. I still manage to earn about $30k a year. Them at 52 I lost my high paying job and some years later retrained to be a carer. The most I have earnt in a year us $21k. So how does this all work. Universal AP is the only way of being all things equal. I think. people would still need to have some savings/super behind than as the Universal would not be enough to support a poorer person. the AP in NZ is much lowers than ours. I asked a friend there and she said that the government expects everybody to have super.
    Dave R
    2nd Dec 2019
    11:52am
    No that's a silly complex way of going about things. The age pension should be universal and paid at the same rate to everyone of a qualifying age. It should remain taxable though so those who are well off and don't really need it immediately pay about 40% back to the government. Doing as I suggest would also boost the economy as all senior citizens would have greater spending power and they are very likely to spend it on themselves and their children and grandchildren.
    TREBOR
    2nd Dec 2019
    12:08pm
    I shuddered at the use of the word 'tweaks'....
    TREBOR
    2nd Dec 2019
    12:17pm
    Well ...I'll use my personal experience - if your 'government superannuation' (more appropriate term than 'pension' under our system) depended on your lifetime income - I've had peaks and troughs... both rich and poor, so if it was calculated on my high rises, I'd be very well off indeed in retirement.

    Anyway - I'd have to go with the universal pension discussed for so long now, and then the opportunity to add, under strict rules that do not permit cheating and rorting, to a personal superannuation fund.

    Once again, such a fund would need to be kept as far away from the grasping hands of politicians and their mates in 'business' as possible... and in 'business' I include the business arms of Unions. Anyone with a scintilla of knowledge knows that Unions, to exist and prosper, have businesses on the side such as property for rent, super funds etc, so there is not much real difference.
    ex PS
    2nd Dec 2019
    12:58pm
    The government superanuation pay out used to be worked out as an average of your final three years in the work force. This was then multiplied by a number based on years of service.
    In my state this system is no longer used, we now have a system that is based on the fund performance, it is the same as most Private Industry funds.
    Any tweaks should be based on length of employment not rate of pay. But I do not agree that the system can be improved by tweaks, it needs an overhall, the pension should be based on need, not greed.
    People need to be given an opportunity to live out their retirement years in comfort and dignity.
    Out taxes pay for the pension, we are entitled to have a say in how it is administered.
    TREBOR
    2nd Dec 2019
    5:43pm
    I was using the term 'government superannuation' in place of the contributions and levies that currently go towards Social Security.... that is, in effect a form of 'government superannuation' for all ..... your point about public service super is valid, of course..
    thommo
    2nd Dec 2019
    12:50pm
    This government isn't going to give pensioners one more cent...in fact, they're more likely to reduce payments, to save the budget surplus, while continuing to give franking credits to the rich who have no right to it...where is the morale integrity with this government?
    The sooner Morrison and the LNP disappear, the better.
    TREBOR
    2nd Dec 2019
    5:44pm
    Budget surplus... what a laugh... a loose projection of what may eventuate in twelve month's time, by which time any government hopes the electorate will have forgotten the figures trotted out.... since it will NOT be a 'surplus' in any real sense in twelve month's time....

    Just a lazy shot at a piece of pie in the sky while pigs fly past it... that's what a 'budget surplus' is in reality....
    day dreamer
    2nd Dec 2019
    12:54pm
    A fair universal pension should be based on the total tax one paid during their entire work life. This is the figure that one contributed to the system and should be rewarded based on that.
    KSS
    2nd Dec 2019
    1:36pm
    So those that contributed most will get a higher pension than someone who contributed less. Yep I can see that going down well! Those that contributed nothing ie those that never worked get nothing under your plan. That's fair right?
    VeryCaringBigBear
    2nd Dec 2019
    1:46pm
    Gee I would certainly get a decent pension then after all the tax I have paid.
    TREBOR
    2nd Dec 2019
    3:20pm
    The principle as Menzies put it, was that all would receive regardless of contribution. Your point, day dreamer, is taken up in the concept of a universal pension at one rate for all, and then the opportunity to add to a super fund.. the difference being that all income above pension would be subject to income tax.

    I, and some others, go further, and say that a total 'retirement packaging scheme' should be instituted under one roof, out of government etc hands, and in which each individual has an account, into which account is paid the levy from income tax 'and other tax strands as required' (Menzies again), and to which the owner of the account can add under conditions of limit and such. Since extra contributions would be from post tax income, only the 'earnings' of the account would be taxed...as occurs now with bank deposits.
    day dreamer
    2nd Dec 2019
    4:29pm
    KSS, what I mean is each individual will get a pension based on how much tax they paid during there lifetime. For those who paid less tax, they should receive a minimum guaranteed pension. In this case,if you paid less tax through investment, you get less at the end.
    This is so that no one is disadvantaged for paying more tax, and no one can take advantage of the various tax concessions.
    jaycee1
    3rd Dec 2019
    10:10am
    So day dreamer, you are penalising those woman [and it is usually woman who do] that stay home to look after their kids, go back to work, then resign to stay home to look after aged or disabled family members.
    Why!!!!! These people are actually saving the government millions EVERY year and NOT all get carers benefits for doing so.
    A universal pension, of at least 3/4's of the standard wage, should be given to everyone. Anything over this should be taxed.
    The government is trying to get pensioners on the Indue card which will add more money to the pension budget but not put any money into pensioners pockets.
    $12000 per person per year will go into Indue's pockets. Which surprise, surprise has a lot of pollies as investors or members of the board!
    day dreamer
    3rd Dec 2019
    10:41am
    jaycee1, no offence to staying at home mums. But it's your decision to have children. And your decision is not because you want to create more future tax payers. Yes you saved government money for staying at home looking after your children, but do you know how many working mums can not afford the luxury of staying at home to do that? Your decision is not based on that you want to save government money, but you want to enjoy motherhood.
    So why should those working mums subsidize your luxury being with your children???
    Rae
    2nd Dec 2019
    12:56pm
    This ageing population narrative is wearing thin. It's been shown to be untrue. Other OECD countries have a higher number of retirees ageing faster and manage to pay pensions without all this fuss or nonsense reports.
    ex PS
    2nd Dec 2019
    1:01pm
    That is because those governments knew how to manage a budget.
    They did not waste surplusses on buying votes.
    hyperbole
    2nd Dec 2019
    1:24pm
    this is how it is done in Norway

    https://en.wikipedia.org/wiki/Pensions_in_Norway
    Triss
    2nd Dec 2019
    5:46pm
    They didn’t put surpluses into pollies Future Fund either, ex PS.
    The Care Bear.
    4th Dec 2019
    10:56am
    The world is aging rather rapidly. However, there are a few countries, such as Japan and Italy, that stand out from among the rest, due to the immense proportions of their citizens over 65 years of age. According to the World Health Organization, nearly two billion people across the world are expected to be over 60 years old by 2050, a figure that’s more than triple what it was in 2000. Because of such increases in their aging populations, some of the world’s largest economies have started facing subsequent increases in their health-care costs, higher pension costs, and a decreasing proportion of their respective citizenry active in the workforce. Further compounded by longer lifespans. In order to adapt to their increasingly aging populations, many countries have raised the retirement age, reduced pension benefits, and have started spending more on elderly care. With lesser numbers of individuals entering the population and people living much longer lives, people above the age of 65 now make up an increasing share of the world’s total population.
    hyperbole
    2nd Dec 2019
    1:21pm
    give all retirees over 70 the concession card. would knock out some of the rorters
    VeryCaringBigBear
    2nd Dec 2019
    1:45pm
    Give it to all those over pension age and it will stop them hiding assets just to get the pension benefits. There will be no need to hide assets.
    KSS
    2nd Dec 2019
    1:27pm
    Seriously? So someone on say $100000 salary gets a pension in line with that and someone on say $20000 (eg a part time worker) gets one in line with that. Until the one on the lower income realises that others are getting a higher pension and starts whinging again! This is quite ridiculous and would solve nothing.
    TREBOR
    2nd Dec 2019
    3:24pm
    Indeed - it's silly when someone can fall from $100k+ pa in 1992 (the equivalent of a Minister's salary now) to dire poverty due to a number of circumstances... if the pension rate was calculated on the later time - including illness and such, piss poor management destroying companies etc and costing people.... most would receive a pittance.

    I, for one, would be very irate at such a rort... it's bad enough now that seat polishers get big dollars in retirement while those who do the work are at the bottom.
    day dreamer
    2nd Dec 2019
    4:32pm
    Government employees on defined benefit pension gets 75% of their pre retirement salary. And that benefit pass on to their spouses once they're gone.
    This should be universal for every Australian.
    Sundays
    2nd Dec 2019
    4:48pm
    Nevertheless, they had to contribute at least 5% of their after tax pay all their working life. Not always easy for young families. The spouse only receives 2/3 when the Pensioner dies
    floss
    2nd Dec 2019
    1:35pm
    Of cause there will be a reduction of workers in Australia that is what automation and robotics are all about, a large initial out lay then less people required.What happened to the thirty hour week and the age 50 retirement.People you have been conned most families work about ninety hours a week combined just to pay their bills.
    TREBOR
    2nd Dec 2019
    3:27pm
    Well - somebody has to pay the bills - and if companies foolishly see automation as their lodestone for riches untold in the future - they will have to be taxed to pay the bills...

    Automation has its limits - the pinciplal limit is the point at which the majority are not earning enough due to lack of employment to purchase automaton made products..... then the companies will fail.

    Stoopid is as stoopid does, as they allus say down in Green Bow.... I say bring it on - such parasites and vultures need to be brought into line...
    TREBOR
    3rd Dec 2019
    12:27am
    Now, then - let's get back to how to control this 'global economy' that is robbing industrial nations blind (unless you are a dictatorship like China, where the Mandarins and the Emperor get to build multi-billion business empires for themselves) - that kind ARE the global economy, and they are thieves and liars and blackmailers.

    I'd suggest we start with a 'participation fee' in our economy.. y'all wanna trade here? Ante up.... put your dollars where your mouth is.. you cop the 'Australian Premium' if you sell things here - that extra 30, 40, 50% you cop from selling in a 'prosperous' Western nation - with mass unemployment, under-employment and homelessness.... and an economy teetering on ruin .....

    Then there is a mandatory tax to be paid by all companies... just how long do you expect to get a 'tax break'? Every year forever? If you're not profitable after 2-3 years - why are you in business? To write things off and down while living the life of billionaires who pay no tax?

    Then there is the Offshoring of Money Excise Notional (OMEN) - wherein you pay tax on cash sent offshore or received from offshore... and especially if it received from a tax haven, when you will pay the difference between that haven's income tax and ours....
    johnp
    2nd Dec 2019
    1:38pm
    just have universal aged pension where all receive it but overall income taxable via the normal tax thresholds. simpleness and gets rid of all the bureaucracy. traumas of asset tests etc plus waste and expenditure by govt on running much of centrelink etc
    GeorgeM
    2nd Dec 2019
    3:22pm
    Correct, sensible people see the solution to be as simple as that!

    But these wealthy, out-of-touch reviewers, with their financial industry lobby groups whispering into their ears, seem to be trying to divert the issues and go off in a variety of directions. All Retirees in particular MUST write to the Review and BE HEARD.
    johnp
    2nd Dec 2019
    3:47pm
    GDay GeorgeM. Can you point to the link where one can write to the Review ??
    day dreamer
    2nd Dec 2019
    4:32pm
    Agree
    Sundays
    2nd Dec 2019
    4:50pm
    The only sensible solution
    GeorgeM
    4th Dec 2019
    8:08pm
    Johnp, just saw your request. Check the link below where they provide information about the review, and they told me they will provide a method to make submissions (not sure when):
    https://www.treasury.gov.au/review/retirement-income-review
    GeorgeM
    10th Dec 2019
    12:00am
    They have updated that page, with a Consultation paper link now added - if you click on that link you get the Consultation paper they have prepared and also instructions how to make formal Submissions to the Review - must do by 3rd Feb 2020.
    Tricky
    2nd Dec 2019
    1:39pm
    There is no way this government is going to allow this review to benefit pensioners and part pensioners.. Thoughts and Prayers!
    Tricky
    2nd Dec 2019
    1:44pm
    The PM, SCOMO has no substance, The PM has no ideas and no beneficial changes will occur with no original thoughts from this government, just look at the last week of debacle's.
    VeryCaringBigBear
    2nd Dec 2019
    3:25pm
    That just shows how some of those in the Senate big note themselves above everything else.
    TREBOR
    2nd Dec 2019
    3:28pm
    Senate doing its job - what an outrage.
    Captain
    2nd Dec 2019
    3:59pm
    VCBB, forget the Senate, there are too many BDS's in the House of Reps. They all act like schoolchildren while Australia burns and sinks to the bottom of the OECD pile.

    We are giving them money under false pretenses.
    VeryCaringBigBear
    2nd Dec 2019
    4:35pm
    At least they don't have the hysterics of school children on climate change which is a natural thing.
    Captain
    2nd Dec 2019
    5:41pm
    The hysterical schoolchildren are not being paid huge amounts to ensure the growth of the Australian economy. However our pollies are being paid for that, and not doing a very good job of it (LNP or Labor).
    TREBOR
    2nd Dec 2019
    5:47pm
    As Kerry Packer said - it's not as if they're doing much of a job with it (his tax money)...
    SuziJ
    2nd Dec 2019
    2:46pm
    We still need a pension that's livable. I've been on the DSP for over 20 years now, and it's getting to a point that it's not able to keep up with everyday expenses, even with the twice per annum increases. We need to have at least $100 per single and $75 per person in a couple to have at least some way of paying the bills.

    I don't drink alcohol, or fizzy drinks, smoke, gamble, or take illicit drugs, go out to the club/pub or eat take-aways, and I can just cope with the current payment. But when my rent goes up, there's no increase in the rent assistance given by the government (current full rate for a single renter paying over $307.20 per fortnight is $138, which is not much when you're paying way above the current market value. I currently live in a regional city, and the rents have gone up by $30 per week in the last 18 months alone!).
    KSS
    2nd Dec 2019
    3:59pm
    Why are you paying "way above market value" in rent? And if that really is the case then you have choices: either renegotiate the rent down or move to a place that at least charges market value if not less.
    day dreamer
    2nd Dec 2019
    4:33pm
    Agree with KSS.
    TREBOR
    2nd Dec 2019
    5:49pm
    Parasites in the house hoarding business... another area of dispute ....
    GeorgeM
    2nd Dec 2019
    3:07pm
    This report appears to have got off on wrong feet!
    YLC - Wonder if we can have a copy of it for all to see what other nasties are in there?
    Foolish statements are there in plenty e.g. to talk of "intergenerational inequity" related to who pays for pensions ignores the fact that current retirees were taxpayers (some since 1946)! It is THE GOVT'S duty to set aside the 7.5% taxes collected into a separate Fund for helping to fund age pensions in the future, no one asked them to shut down that Fund, and also the Revenue continues to be collected.

    Also, to talk of "replacement rate" income is garbage, that is NOT the Govt's role. We do NOT need to copy some other countries as noted, instead should follow NZ's approach and give the same amount to all Individuals, and NOT different rates for Couples either. The Govt's role is to provide a basic income, NOT a Replacement Income.

    There is also no mention of the excessive Superannuation benefits being collected by the rich when they talk of "inequity"! Most of that $43Billion per year can be easily re-assigned to give Age Pensions to all and at a higher rate.

    The report comments quoted create great concern - it looks like comments from some out-of-touch wealthy people, and it seems like they are NOT listening to Retirees!

    Retirees MUST write to them individually and in groups DEMANDING the end of all these STUPID MEANS TESTING rules and other convoluted ideas, and instead simply implement Universal Age Pension for ALL with NO tests - a Fixed amount for Individuals from Age 65yrs onwards with Residency of say 15 years. Allow a maximum cap of say $600K in Super with concessions as at present (to encourage all to save additional money for their own welfare), and tax all other income at Marginal Rates.
    Which then comes to the need to stop tax avoidance by having Minimum Taxes based on Gross Income less only the basic non-taxable threshold.
    I think the above will be a win-win for Govt budgets and for all Retirees (except tax avoiders).
    johnp
    2nd Dec 2019
    3:18pm
    AGREE WITH YOU; GEORGEM :-)
    Captain
    2nd Dec 2019
    4:08pm
    GeorgeM, there also needs to be a minimum of 15 years of paying tax as well. We now have 3 generations of the same family who have never worked, received the dole and will receive the Aged Pension.

    The entire society pays for these people from birth to the grave.
    johnp
    2nd Dec 2019
    4:36pm
    Also agree with Captain However just bear in mind that we also pay for the pollies from birth to the grave !!
    Captain
    2nd Dec 2019
    5:44pm
    johnp, too true. Perhaps we should take up Trebor's suggestion and sharpen up the guillotine.
    TREBOR
    2nd Dec 2019
    5:50pm
    .. and make sure it's well greased ..... don't want any hold-ups...
    Triss
    2nd Dec 2019
    5:53pm
    Remember that there are people who work hard for a low wage and don’t earn enough to pay tax. They certainly shouldn’t be penalised.
    TREBOR
    3rd Dec 2019
    12:31am
    I'm advised that the fee for a hanging is $700 a pop**, plus expenses... the lowly paid could find a meaningful career as a guillotine operator...

    ** Personally, I feel that fee could be equal to, say, an NRL referee's fee for a game... my uncle was a top grade referee.. bet he wished he'd been in that game when the money come into it big time... I think he got $25 a game or something, $35 for a Test match... something silly like that...
    Captain
    3rd Dec 2019
    11:25am
    Trish, over a lifetime of working I imagine most people would pay tax for quite a number of years.
    GeorgeM
    4th Dec 2019
    8:16pm
    Captain, I understand your point, however the moment you start relating it to what taxes people paid, it creates complexities such as what about mothers who stayed at home looking after children while their partners were hard at work paying huge taxes on behalf of the family, etc. Also, all pay taxes at every turn - GST, Excise duty on petrol, stamp duties, etc.
    So, I believe it is better to let the Residency criteria take care of contribution to this country, and not worry about a bit of money going to the less fortunate or others in different situations such as mothers as mentioned, or those forcibly unemployed, etc.

    Given our vast natural resources, which should be used far better for the benefit of this country rather than overseas interests, we should be a richer country than most Arab countries and ideally not even pay individual taxes - I know, the horse has bolted, but one can always declare a national emergency and take back resources! One always lives in hope!
    Hairy
    2nd Dec 2019
    4:16pm
    Good one George M.
    Fred
    2nd Dec 2019
    6:07pm
    Yep without all these so-called rich leaches many would not have had a job at all it is rich leaches and International companies who stump up the money to employ people yes they increase their wealth but who would employ people without them. Yes, I know small business employes more people but without the large corporations paying wages, taxes etc the small businesses would probably not survive. I also agree that a pension should be paid to everyone regardless of how wealthy they are.
    TREBOR
    3rd Dec 2019
    12:34am
    Still evades the issue of opportunity to hide away income and write it all off... nobody can live on fresh air as some of these leeches claim to do... while eating lobster for lunch and driving a Rolls etc..
    Chris B T
    2nd Dec 2019
    9:21pm
    OAP is taken From A Combine Tax Receipts, not just Income Tax.
    To make a Direct Comparison to those receiving the OAP and those Below the OAP is a "Furphy".
    More of a distraction, as Tax Receipts come in many forms as well Mining Royalties that Did Not Exist When The OAP was First Introduced.
    The Comparison should be % of GDP of the Past to Present % GDP used for OAP and % of take up.
    TREBOR
    3rd Dec 2019
    12:32am
    Interesting idea....
    Blossom
    3rd Dec 2019
    9:16pm
    Before Salary Sacrifice was used to put a % of Super into at a reduced tax rate, we paid the full tax rate on our gross salary before our super was deducted. Younger people are able to take advantage of that.
    Blossom
    3rd Dec 2019
    9:16pm
    Before Salary Sacrifice was used to put a % of Super into at a reduced tax rate, we paid the full tax rate on our gross salary before our super was deducted. Younger people are able to take advantage of that.
    Blossom
    3rd Dec 2019
    9:16pm
    Before Salary Sacrifice was used to put a % of Super into at a reduced tax rate, we paid the full tax rate on our gross salary before our super was deducted. Younger people are able to take advantage of that.
    tiggr55
    8th Dec 2019
    10:21am
    What both sides of government seem to be unable to tackle is the number of businesses and high end individuals that pay little or no tax,if they want to properly fund pensions etc then make sure all taxes are chased. Nearly all of these commentaries fail to point out the huge cost of (approx 10x pension) benefits given to those who don't need it like negative gearing, franking credits etc