By Chief Advocate Ian Henschke
You know there’s an election in the air when the talk turns to how well we are all doing in old age.
Clearly, if that’s the case, you don’t need to worry.
But what’s the real picture? If you’re single, renting and on a pension, life is tough. A lot of people are in that situation. Women are particularly badly off, with around one in three living below the OECD poverty line.
In total, about one in four pensioners is living below the poverty line. That’s hundreds of thousands of Australians.
You also must remember although compulsory employer contributions to superannuation were introduced in 1992, they started at a low level of 3 per cent. That figure was supposed to increase progressively to 12 per cent by 1 July 2019, but super has been on hold at 9.5 per cent since 2014.
A good number of self-funded retirees are not by any means wealthy. They are not pensioners and not rich. If they own shares – and the majority do - they are now facing the risk of losing their franking credits.
As well, a lot of older Australians have little or no superannuation. Many have been in and out of the workforce and others lost their jobs in later life and had to draw on their super to pay living costs.
So, the picture is much more complicated than sometimes portrayed.
Retirees are not as prosperous as some would have us believe. But you wouldn’t know that if you read the commentary of late. In the past week there’s been a lot of discussion about how well retirees are doing in Australia.
One commentator, CEO of the Grattan Institute John Daley, says we don’t need to worry about lifting super to 12 per cent because older Australians have never had it so good.
We’ve all heard about the SKI generation: the boomers who are Spending their Kids Inheritance.
But one recent report on financial wellbeing says “on closer inspection, the data tell us that older people are over represented in the populations at risk of financial hardship. About one third (31 per cent) have less than $5000 in liquid assets.”
This is one of the reasons National Seniors has joined with the Benevolent Society to Fix Pension Poverty. We want the politics taken out of the pension and an independent tribunal to set the pension. We are pushing for this in the run-up to the 2019 election.
In the meantime, former Prime Minister and Treasurer Paul Keating bought into the debate over retirement incomes and superannuation. He gave the Grattan Institute a good going over in classic Keating style.
You can see what he had to say here.