The retirement incomes fiasco

The National Economic Summit was a non-event, a sad spectacle of influential and intelligent people dancing around the fire instead of jumping in and taking the heat for advocating what cannot be ignored.

Their public statement was a motherhood vision that did not contain one specific that will help Australia prosper in a rapidly Ageing world.

This particularly applied to Retirement Incomes where their comments were a perfect exhibition of blandness designed to avoid any chance of a community backlash over actions that most thinking people know are totally unavoidable.

This is what they should have said.

Primary Policy

• A single piece of legislation must combine and coordinate all aspects of Retirement Incomes, with existing legislation repealed so the means of exploiting their competing differences are removed.

Retirement Incomes Authority

• The predominant feature of this legislation must be the establishment of independent Authority which has power to determine policy for clearly defined aspects of Retirement Incomes. The most important of these are,

Pensions

• Since the Age Pension was established in 1908, no one has accurately determined what the amount of the pension must be in order to meet basic needs of Older Australians in modern society.
• The Authority must have power to determine this for the first time and then review the size of the Pension annually in light of actual circumstances rather than using predetermined formulas.
• It would have power also to determine the basis on which anyone qualifies for a part pension so that income they earn from superannuation, savings and other assets, together with a part pension, will give them a sum which is significantly above the full pension thereby encouraging life time savings.

Family Home

• A family home must remain exempt from the Assets Test except when its value is larger than a capital sum that would produce an income of 50,000 dollars a year in excess of a full pension if invested at the Reserve Bank interest rate.