Australian General John Monash was famous for bringing his army into one place and hitting the enemy hard until it broke.
This week we’ve trained our policy ‘guns’, together with those of our partners, telling government and the royal commission what we want to fix aged care, the retirement income system and pension poverty.
Reconvening in Adelaide, the Commission took on the form of a workshop rather than formal hearings.
It has been looking at how to rebuild the system and help people get better access to aged care information.
While some experts suggested face-to-face meetings and greater in-person support for older Australians and their families, National Seniors Australia CEO, Professor John McCallum cautioned that digital services must also be retained and grown.
“Look, I’m very supportive and we’d be very supportive of face-to-face information, provided that it isn’t face-to-face information only”, he said.
“There’s a digital world we live in. It’s much more efficient. We are designing a system for the future.”
National Seniors Australia
National Seniors believes a lot can be learned from overseas retirement income systems.
We should look at importing best practice, especially from New Zealand and Canada.
There should be a focus on importing innovations that simplify the system and make it easier for retirees to attain and maintain adequate income.
The review is focusing on three income pillars – the Age Pension, compulsory superannuation and voluntary savings.
We believe it should recognise a fourth pillar, employment income.
In other words, the money you receive from working.
This is particularly important for those who have not accumulated adequate savings.
More needs to be done to inform and educate Australians about their retirement income system. A lack of financial literacy combined with system complexity are key barriers.
Constant changes to the system undermine public confidence in it, especially for those who have made long-standing plans within the rules and rely on uncertain markets for their retirement income.
In balancing the system to improve equity, it is important any future changes do not substantially undermine the retirement plans of existing retirees.
Retirees should be provided with time to adjust or grandfathering should be applied where appropriate.
The Alliance for a Fairer Retirement System
National Seniors Australia is a member of The Alliance for a Fairer Retirement System.
The Alliance says there is a need to encourage more voluntary contributions to superannuation, which would in turn reduce the burden on a declining taxpayer base.
It also notes there are 180,000 Australians over 55 on Newstart.
As home ownership declines more people will enter retirement without owning that asset, or with significant debt.
Given the Age Pension system is predicated on assumptions of debt-free home ownership, it’s clear support provided to renters is insufficient.
The system needs to adapt to current and future trends in demographics, the labour market and home ownership.
New pressures are being placed on the system that it is not designed to deal with. Changes are required.
The current taper rate creates an incentive for part-pensioners to divest themselves of assets.
In the pursuit of savings, successive governments have created perverse incentives for retirees to impoverish themselves.
The Age Pension rules encourage retirees to arrange their affairs to become residential property asset rich, but income poor.
Small business owners frequently rely on selling a business to fund retirement, but this isn’t always an option.
Those in the gig economy frequently suffer from fragmented employment, making savings a challenge.
Non-compulsory saving can also prove difficult for many. It is vital that policy settings take account of the impact on all retirees and not only those who have benefited from superannuation.
Fix Pension Poverty
National Seniors Australia is working with The Benevolent Society to pursue the Fix Pension Poverty campaign recommendations.
The campaign told the Review it wants Rental Assistance increased by 30% for couples, 50% for singles, and indexing to rental increases.
It also wants:
· affordable dental care for those on the Age Pension
· help covering the cost of broadband for those on the Age Pension
· decisions on the Age Pension to be based on evidence, adequacy and need, not party politics.
These reforms can be funded by cutting back retirement income tax breaks for those who don’t need government funds.
More government action is needed to promote jobs for older workers, including addressing ageism in the workplace and boosting the Newstart Allowance.