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The Forum > Article Comments > Paying for our old age > Comments

Paying for our old age : Comments

By Bill Richmond, published 23/9/2008

How are people going to fund their old age, and where does government and the pension fit in?

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Until in recent years the aged pension was funded by a tax provision,a certain percentage set aside especially for provision of aged pensions. When the Government of the day decided to fund compulsary retirement funds by instituting a superannuation fund, they in their wisdom &, probably like most government schemes, always take the easy way out, handed the scheme to private enterprise. Huge sums of money have been generated,invested more times than not, not very wisely. The government should have taken advantage of the super funds & insisted upon their investment into financing Australian infrastructure with a guaranteed government bond interest rate. The people who are now suffering are those who retired before the superannuation scheme commenced & expected the Aged Pension entitlement,( having paid the separate tax), without the means testing,thus with the full pension & a small lump sum in the bank would have existed fairly comfortably.The Hawke/Keating government changed that by introducing both income & asset testing & at one fell swoop disenfranchised thousands of carefull retirees who through having paid this old age tax provision believed they were legally entitled to the age pension.
The Howard government as a follow on, then perpetuated this myth(explored by Dr Richmond in this article), that the the present/future taxation base system could not support an expanded age pension scheme as more elderly lived longer lives. What a furphy!! its a fact of modern living that the taxation/revenue base is continually expanding & quite easily could accommodate the aged pension well into the foreseeable future. Dr Richmond conveniently forgets all about the GST, when he states aged pensioners do not pay tax, which presently at 10% is one of the lowest in the western world, including the US. This country can well afford to pay all types of pensioners a living wage, without any hardship whatsoever to the younger population, or, perceptable difference in their living standards. I would also remind professional economists that a measure of society's civilisation is how they treat
the less fortunate members of their society.
Posted by Jack from Bicton, Wednesday, 24 September 2008 7:09:23 PM
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Yabby, you generalize with, "grizzle about their pensions, yet refuse to sell their real estate and move to much cheaper retirement homes."

I have not grizzled, but I kept my house and land, 180 klm from the nearest large City of 18,000 souls. I was widowed at 38 with 5 children 5-15 years, now all working & families of their own. I did rely heavily on the public purse as well as my part-time work until I got full time work 100klm away. I wore out two cars commuting, & in the end boarded & still kept my home. Now the mining boom is one many local homes packed to the rafters with mineworkers but they were empty for a number of years, rotting, or white ant riddled. Yes many pensioners rather keep that little bit of independence than rent, then be moved on with market changes.

I am fussy to what guests enter my home. I have no gas guzzling car, and find it difficult to get around but still can use the limited public transport, and appreciate what we have. Gardening is my hobby and necessary for fruit and vegetables, with a few flowers to cheer me. Retirement villages are dominated by by big business, Church or otherwise. Nursing Homes are understaffed in the Care Section, and usually top heavy with CEO's taking the cream of the income..
Posted by ma edda, Wednesday, 24 September 2008 8:20:20 PM
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