An end to the age of entitlement. Toilet roll please.
In 2015 an elderly man sat outside a bank in Thessaloniki. He sat on the ground crying. The Greek government closed banks for a week and capped ATM withdrawals at 60 Euros per day. When the banks reopened, the highest people could withdraw was one-hundred-and-twenty Euros from their pension.
Australia had a much stronger economy than Greece. And yet, well before the coronavirus, questions were asked about aged pension affordability. Such arguments went along the lines of this taken from ID The Population Experts:
“The baby boom ended in 1962, with a sharp drop in the birth rate. So the last baby boomers will turn 65 in 2026. At that time aged care and pensions will be a major strain on Australian society, and I predict that the government of the time will announce significant but not massive changes to pension and superannuation age. Perhaps an increase in the pension and superannuation age to 70 from 2026, removal of the family home asset exemption for new entrants.”
When the Abbott Government won in 2013, Treasurer Joe Hockey declared the ‘end of the age of entitlement’. He rattled many older Australians by suggesting the retirement age be set at 70.
With knee-jerk handouts and toilet roll stashing behind us, and the reality of a GDP in massive debt before us, how will life change in Australia?
Future governments will need to address some tricky questions. The solutions they arrive at could be many and varied. Will access to your Super be increased to an older age? Could the family home be no longer exempt from asset tests? Those in retirement no longer be able to structure investments and still claim the pension?
No one knows what will happen next year or the year after. One certainty is that this virus, beyond the health toll it already extracts, will see everyone pay.