The Forum > Article Comments > Paying for our old age > Comments
Paying for our old age : Comments
By Bill Richmond, published 23/9/2008How are people going to fund their old age, and where does government and the pension fit in?
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Posted by Cheryl, Tuesday, 23 September 2008 12:32:10 PM
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I am astounded that Cheryl and others are unable to see the obvious requirement needed to solve the retirement problem. What is needed is a substantial reduction in the standard of living of ordinary people, so that once more we can pay our way in the world, and start to pay off the enormous foreign debt we have acquired over the last 35 years (we had no foreign debt when Whitlam came to power).
A good start would be to: (a) have the Reserve Bank set interest rates at 5% above inflation. (b) Have the Federal government raise petrol taxes to the european level. (c) have the state governments raise service charges such as public transport, electricity, etc., so that they not only pay their way, but return a healthy dividend on capital. (d) to prevent unemployment rising, use the money raised on renewing our infrastructure, which would be financed out of current income, not borrowing. (e) start to repay our foreign debt by running a current account surplus. This would be helped by encouraging people to save, not spend. Posted by plerdsus, Tuesday, 23 September 2008 2:01:23 PM
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Posted by Menni, Wednesday, 24 September 2008 4:47:05 AM
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There are many ways of solving the problems of how do we support people who are too old to work.
The obvious one is get rid of the myriad of employer based super schemes. After rolling up 13 super funds I opened my letter box yesterday to yet another fund. I keep checking the ATO Lost Super site but I am not there because even though I left this address for a number of years the Super funds did not update my address when the mail was returned as "Not Known at This Address". I know this because ANZ Super still sends mail to this address 15 years after addressee has moved so I just throw the mail in the rubbish. The myriad of super funds is particularly cruel for casual employees who contribute tiny amounts to as many funds as they have employers. This money is wasted. It's cruel to force people who don't gamble to invest their hard earned savings in the stock market. I don't gamble, I hate buuying and selling yet that's what elderly Australians are forced to do. Either that or place their hard earned funds in the hands of a lazy, overpaid, incompetent and unaccountable fund manager. Employment: ageism is alive in the Australian workplace and older job applicants will not get a position through employment agencies. People who have done office work all their working lives will not have the strength or stamina to stack shelves, pick fruit or clean for a full day. Should elderly Australians who are in retirement mode make super contributions on their part time work? Older Australians use less services than children whom society builds schools, hires teachers to educate to at least age 15. [I am not against children] Elderly people need assistance in daily living for the last 2 years of life although the developers [builders] of retirement villages would have us believe that elderly need to be corralled away from the rest of society for additional support. [where is the additional support?] St Vincent De Paul - single aged pensioners better off than other pensioners. Posted by billie, Wednesday, 24 September 2008 8:35:32 AM
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Presently the problem lies more with the baby boomers and some in the post-baby boomer group many of whom could not access superannuation until mid-late working life. In 30 years time most entering retirement age will have the benefit of a retirement income from superannuation.
I have a real problem with the security of retirement being largely tied up in the hands of the private sector. A universal pension scheme administered by the government would be safer with the option of private superannuation or investment to top up being a choice for the individual. As it is the Australian Government has already provided millions of dollars in corporate welfare to financial groups - it is a mad system expecting the private sector to finance retirement and then bail some of them out if they fail. http://www.apra.gov.au/media-releases/02_00.cfm http://www.smh.com.au/news/superannuation/cowboys-still-ride/2008/09/08/1220857453906.html I partly agree with Plersdus comments above that we need to be encouraged to save and to become less materialistic. Posted by pelican, Wednesday, 24 September 2008 9:53:22 AM
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There are of course plenty of pensioners, who are now sitting on
pretty valuable real estate, fairly close to cities. Quite a few of these, grizzle about their pensions, yet refuse to sell their real estate and move to much cheaper retirement homes etc. They intend to leave that wealth to the kids. The next generation stand to inherit more wealth then ever before, from our present set of oldies. Makes absolutaly no sense to me, that they don't use that wealth to enjoy themselves, yet want more money from the public purse. Posted by Yabby, Wednesday, 24 September 2008 2:08:30 PM
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A further risk is that of funding existing public infrastructure. With a narrowing tax base, there won't be the monies to fund highways, rail links, etc. Economics love formulas but if you project forward say 10 years, a couple, who have paid off their home, and who have no major debts, will need at a minumum $60K per annum net in sum.
That's just to live. Nothing fancy. Now if they don't own their own home add another $15K to the sum in rent of mortgage.
Out of the principal sum will need to come private health care at say $200 per month. Petrol? Beats me.
None of this accounts for market corrections. It presupposes that GDP stays at about 3 percent per annum. You can see that even these most conservative estimates tend to blow out wildly as one projects forward.
The simple fact of the matter is that the Government will HAVE to fund/top up pensions as only (approx) 40 percent of the population will be in this upper bracket.
Keep your eye on recurrent capital works expenditure such as sewers, beachside road maintenance, new power grids (espc in Qld) and building more or better hospitals (SA).