Pension fact check

Image: The New Daily

By National Seniors Australia Chief Advocate, Ian Henschke

They used to say there were only two certainties in life, death and taxes. Now it seems you can add a third, that older Australians are being blamed for ballooning costs to the economy.

This week Treasurer Josh Frydenberg gave a speech described as a warning the ageing population is an “economic time bomb”. He is the latest in a long line of treasurers describing our elders as ‘a tidal wave’ or ‘tsunami’ about to hit us and then, leaving policy solutions to the next Treasurer.

The Treasurer says older Australians should consider retraining later in life so they can stay in the workforce longer to fund what has been described (in the past) as an increased “burden” on the economy.

There are facts that need to be addressed here.

Whether by desire or necessity, older Australians DO want to work - and work longer. But guess what?

Despite incentive programs for employers to hire older Australians, the over 55 cohort remains the largest age bracket receiving Newstart.

"The average time this age bracket stays on Newstart is three and a half years! In other words, older workers are being shunned by employers. The statistics back that up and so does the anecdotal evidence we hear from our members."

Instead of telling older Australians they have to retrain and be prepared to work longer, perhaps the message should be directed at employers that THEY should be prepared to hire older workers and VET to train them.

Unemployment among older Australians is not a choice, it follows closely with overall job conditions and has done so for 40 years.

The second myth we need to bust, is that the Age Pension will become a drain on the economy. This has been the prediction in successive Intergenerational Reports.

Figures from respected actuary group Rice Warner say the opposite.

Its 2018 study shows, by 2038, only 56.6% of the eligible population will receive any Age Pension, down from the current rate of just over 70%.

The cost of the Age Pension to the economy is in fact going down.

The same study says the cost of the Age Pension was around 2.9 per cent of GDP 20 years ago.

Today, Age Pension expenditure is around 2.7 per cent of GDP and it will keep falling NOT rising in future and projected expenditure on the Age Pension will fall to 2.5 per cent of GDP by 2038.

"Older Australians may just feel a bit aggrieved by this scape-goating."

Our surveys show more than two thirds of people 50+ actually agreed that if you can do paid work in old age, then you should.

Older Aussies typically aren’t sitting on a cruise along the Danube.

73.2 per cent tell us that the downward flow of support from them to their adult children is greater than the support provided by their adult children to them.

For example, 27 per cent provided care for grandchildren or children under 12. Within their own age group, they are also working carers. Twenty two per cent provided care for another adult and 6 per cent cared for both an adult and a child or grandchild under 12. Sixty six per cent of these carers weren’t in good health and they were 68 per cent more likely to say they had no time to exercise.

"Let’s call this for what it is. Years of neglect, despite the creation of the Superannuation Guarantee, have got us to where we are with aged care costs. The blame lies with generations of policy makers from the 1980s and it is not a ‘young versus old’ issue."

The older generation is actually pulling its weight. There is an issue of growing social inequality between rich and the less well-off which Australia needs to deal with.

All governments are obsessed with stats.

Here’s one the current government might want to digest. One in two Australian voters are over the age of 50.

Yes, there is a growing ageing population and yes, they can be a burden but only at the ballot box for political parties who get it wrong.