By Joe Montero President of Fair Go for Pensioners (Victoria)
No one could argue that the Age Pension in Australia provides a decent standard of living to those who depend on it. But there has been a great deal of disinformation to paper over this reality. Now that the nation has entered a federal election phase, this is as good a time as any to tell a few truths.
To begin with, Australia is a wealthy enough country, up there with the rest of the western nations grouped in the Organisation for Economic Cooperation and Development (OECD). We have 23 percent of those over 65 living in poverty according to the OCD figures, compared to 14 percent for Germany, and 13, 13, 12, and 9.4 percent for the United Kingdom. Canada, and Sweden.
It’s hard to argue against this. Seniors are getting a raw deal when it comes to the age pension. The OECD figures say that the Australian age pension is the second lowest, around 33 percent of average earnings, when for other OECD nations it averages around 61 percent.
This stark picture contrasts with the narrative long favoured by politicians and sections of the media that have long insisted seniors, including those on the age pension are well looked after. It counters the other assertion that seniors are a burden on younger generations.
The Australian economy might have its troubles. So do those of the rest of the OECD nations. Some of them are significantly worse off. The difference is in attitude. Seniors are valued more there than they are here. It’s a matter of what are the national priorities.
Superannuation doesn’t save the day. Most retiring now with superannuation, come out to around $370,000. This won’t last long. Future retirees will have more, but not enough to last the next couple of decades. A sobering reality is that the disproportionate payout form Australia’s superannuation funds go to those on the top income brackets. Exactly what this amounts to, is not available from government sources nor from the OECD.
The Graph below shows that Few across all age groups will accumulate anywhere near $3 million worth of superannuation on retirement. These are from older on the left to younger on the right.
The next graph shows that the richest get the biggest payouts and the poorest the smallest.
The current government has at least tried to balance this out a bit more fairly, by trying to impose a 30 percent tax rate on any part of a payout that exceeds $3 million. This has been falsely called a tax on all superannuation payouts by representatives of the well-heeled and media outlets like The Australian. The point is that it remains well below the top tax income bracket of 45 percent. Secondly, it counters some of the benefits enjoyed by the few and denied to the rest.
Australia must turn this around. This begins with recognition of the contribution to the Australian economy and has been made over a lifetime by those who have now retired. They built the nation. Recognition must be given to the fact that they continue to contribute their time and effort, often as unpaid volunteers. Imagine where Australia would be without this contribution.
Australia must honour its obligations under Article 125.1 0f the International Covenant of Economic, Social, and Cultural Rights, to which our nation is a signatory. This is mirrored in the policy of the Attorney-General’s Department (Right to an Adequate standard of living, including food, water, and housing).
Beautifully said! This should be going to the PM.