Face of Nation : Business is pleased to see the Morrison government is finally looking at Australia’s entire retirement income system, rather than just superannuation.
On Friday Treasurer Josh Frydenberg announced a review into the interaction of superannuation, asset ownership and the age pension, a process that was recommended by the Productivity Commission earlier this year.
“You have to look at the whole retirement income system, you have to get this to work for a modern economy.”
So far, Mr Frydenberg has already ruled out the family home being included in means testing for the pension and that the review will not result in a rise in the pension age to 70, while saying planned increases to compulsory super will go ahead.
The increase to the compulsory superannuation guarantee has been legislated and will see contributions incrementally rise from 9.5 to 12 per cent by 2025, starting with a rise to 10 per cent in 2021. However, Ms Westacott hopes the inquiry will look into this.
“If we’re going to make this decision, it’s got to actually achieve the outcome, which is actually to make more sustainable people’s retirement income,” she said.
“I think Australians are entitled to to say, ‘if I’m compelled to do this, then its got to work for me, it’s got to achieve an adequate retirement income for me’.
National Seniors Australia spokesman Craig Sullivan believes the review is a once in a lifetime opportunity to look at an area that impacts on so many Australians and he doesn’t want to see it squandered.
He said it is an opportunity to remove some of the inequities of a system where deeming rates – which assess the value of financial assets when applying for a pension – and tapering rates – that govern the amount of a part pension received – are too low.
“They act as a disincentive for pensioners to save toward their retirement, they get penalised for having extra money in the bank,” Mr Sullivan told.
Newstart should also be looked because of the large cohort of older Australians aged between 55 and 64 that receive it and is an allowance that hasn’t seen a real increase in 25 years, he said. “We think that Newstart at the very least should be examined and raised,” he said.
Likewise, with a declining number of older people owning their own home, Mr Sullivan said that rental assistance should also be taken into the review.
