Pension plan: political pain for little fiscal gain

Updated March 19, 2015 15:59:44

Photo: There is a strong argument to be made for tightening eligibility for the age pension. (AAP: Alan Porritt)

If Scott Morrison is willing to grasp the nettle of pension reform, he would be better off looking at ways to move those with greater means off the payment altogether - that's where the real savings are, writes Matthew Taylor.

The Prime Minister's assurance that the May budget will be "pretty dull and pretty routine" is meant to assuage the fears of a restless electorate and an increasingly nervous back bench. However, with the government locked into a battle with cross bench senators to freeze pensions from 2017, it could be anything but dull for pensioners.

The early signs don't look good for Social Services Minister Scott Morrison's pension reforms. Senators Zhenya Wang, Glenn Lazarus and Jacqui Lambie say they are opposed, while Senator Nick Xenophon says the plan is "problematic".

As Judith Ireland wrote for the Sydney Morning Herald this morning:

While fellow crossbenchers John Madigan and Ricky Muir are yet to state their positions and senators Bob Day and David Leyonhjelm have been more receptive to the Social Services Minister's proposal, even if all four agreed this would not provide the six votes the Coalition needs to pass legislation.

There are only two ways to reduce the structural burden of the age pension on the federal budget. The Government can lower the rate, by permanently changing the level of indexation, or it can reduce the number of people eligible for the pension by tightening the means test and pushing higher income pensioners off altogether.

For all the political deftness of Scott Morrison's proposal to freeze the pension in return for regular reviews of pension adequacy, the Government risks significant political pain for little fiscal gain. Without shifting community expectations, such a change is unlikely to deliver a permanent reduction in the level of pension payments.

If the Government is willing to grasp the nettle of pension reform, it would be better off looking at ways to move those with greater means off the pension altogether. Not only will this deliver greater - and longer term - budget savings, it is also the fairer of the two options.

Pensioners, whatever their level of private income, have become accustomed to their pensions increasing in line with 27.7 per cent of Male Total Average Weekly Earnings (MTAWE) when the Consumer Price Index increases fail to deliver this amount.

This benchmarking to MTAWE is responsible for an increase in the single rate of the pension of over $9,000 since 2002. This amounts to 5.4 per cent annual growth in the single rate, outpacing prices by 2.7 per cent over the period.

This MTAWE benchmarking has been in place since the Whitlam years. It will be extremely difficult to convince pensioners that current policy is unsustainable and that they should accept lower payments.

Even if the government were able to do this, it will only benefit the budget bottom line if the Minister's proposal does in fact reduce pension expenditure - which is far from certain.

Much rests on the recommendations of the independent panel tasked to undertake the triennial adequacy reviews. There is a strong possibility this panel will be captured by those who would recommend even higher pension levels, regardless of whether they were affordable or what tax burden that would impose on Australia's wage earners.

For example, if the panel were to recommend that the pension should be set above a relative poverty line - half of median disposable household income adjusted for family size - it is probable that age pension expenditure will increase.

Had the single rate of the age pension been benchmarked to such a measure in March 2002, it would be 14.1 per cent higher by March 2012 compared to current policy. This increase would be even greater if one assumes that pensioners would have received the September 2009 one-off pension increase of $1,560 on top.

The newly minted independent Senator Lazarus is worried that "pensioners will be at the mercy of a review every three years". However, in the absence of a change in community expectations on pension benchmarking, it is more likely the budget will be at the mercy of a large - and growing - constituency that will demand the return of any income lost over the preceding three years.

Of course, the government could choose to ignore the advice of the independent panel and keep the pension tied to prices increases, but this would defeat the purpose of creating the panel in the first place and merely add another new bureaucracy.

Even if this approach was successful in constraining growth in pension payments, it will do so at the expense of all pensioners - some of whom are completely reliant upon it.

There is a case to be made for pensioners to shoulder some of the burden of budget repair, but the government's focus on pension indexation is, at best, a distraction from the more substantial reform required.

If the government is serious about returning sustainability to the age pension it should look at some of the inequities in the pension means tests, especially those created by excluding the family home from the assets test. This ignores the higher living standards pensioners could achieve by converting this asset into income, and provides the same pension payment to those with small amounts of home equity as to those with million dollar homes. It directs taxpayer's dollars - including those with lower lifetime earnings - towards those who have over-capitalised in their homes, allowing them to draw a larger pension and preserve this asset for their children.

Beyond this, there is a strong argument to be made for tightening eligibility for the age pension. A single pensioner with $40,000 in private income, and nearly a million dollars in assets, can still receive a part pension.

There are better uses for taxpayer's dollars than providing support to those who do not need it. Fixing the pension requires action, not review.

Matthew Taylor is a research fellow at The Centre for Independent Studies.

Topics: welfare, older-people

First posted March 19, 2015 15:58:11

Comments (195)

Comments for this story are closed, but you can still have your say.

the yank:

19 Mar 2015 4:05:52pm

those with greater means off the payment altogether - that's where the real savings are, ... totally agree.

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- fcg:
  
  19 Mar 2015 5:02:28pm
  
  But where do you draw the line? Those already super rich do not qualify for the pension. Those who have managed to put away some funds must disclose these figures officially from their banks or whatever annually and have the pension reduced depending on that amount. The alternative for those who have funds and may well lose access to the pension under the Yank's simplistic suggestion, would be to spend it all their savings and grab the full pension. As usual, Yank, you haven't quite worked it out . . .
  
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  - Caffettierra Moka:
    
    20 Mar 2015 8:04:09am
    
    The 'super-rich' ship their money overseas to a spot where Australian law doesn't matter. And it is not a tiny amount, tens of billions of dollars. That is money that never gets taxed, but the owners still draw on all the services and benefits that the State provides. If you think that they won't be living in a mansion AND getting a pension, think again.
    
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    - Realist1:
      
      20 Mar 2015 10:06:05am
      
      what do you mean by super rich? define the term
      
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    - PeterH:
      
      20 Mar 2015 10:24:35am
      
      Realist to most lefties the term "super-rich" usually refers to anyone earning more than them. :)
      
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    - Caffettierra Moka:
      
      20 Mar 2015 10:33:06am
      
      "Those already super rich do not qualify for the pension"
      
      The poster above might have a ready definition. The rich have no actual definition for that, as the politics of envy kick in real fast. Those with 'only' several millions are always considering themselves worse off as they see the really good stuff going to the nearest billionaire. Billionaires lord it over the humble millionaires. To whit: the millionaires that live in the Hamptons near NY City complain about the billionaires who use helicopters to commute to work, even calling the noise 'class warfare'. However, the best quote goes to the man who built the largest inhabited residence in the USA for only 100 millions. He describes is as "old age and loneliness insurance."
      
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    - Hawkeye36:
      
      20 Mar 2015 7:03:34pm
      
      Super Rich term means, those who have the millions or billions of dollars or are well off self retired, DON'T DESERVE a welfare payment.
      
      And it's true, they rich are trying to shift their money offshore, so they don't have to either,
      
      1) Pay little tax
      
      2) Pay NO TAX at all
      
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  - Geoff:
    
    20 Mar 2015 2:56:02pm
    
    The only 'means' that deliver a living advantage and that people can effectivley hide from the tax office with respect to the pension is the family home. Any other means that you can effectivley live off in retirement excludes or diminishes your pension claim. Of course, this is why you have people in big homes living well off the pension and people who feel comfortable blowing thier super because they will not have to pay for housing in retirement.
    
    If owned homes were consideted in the pension test the pension would become sustainable overnight. A home is a wealth asset like any other that simply saves you money instead of delivering income. An un-means tested pension entitlement is completley demographically unsustainable at a rate that does not leave the elderly without means in poverty. A house is means like any other.
    
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- John51:
  
  19 Mar 2015 5:11:57pm
  
  Yank, up to a point you and the author are right but that will not be enough. They also need to tackle the increasing amount of the budget that goes to the tax subsidy to superannuation, most of which goes to the highest income groups. This year the tax concession to superannuation will be a greater cost to the budget than the aged pension. That does not make sense.
  
  Superannuation, a scheme that was supposed to take cost pressures off the budget from the aged pension is in fact doing the opposite. It has in fact become the aged pension for the most well off. And for the top income group it has become a very nice aged pension and non taxable as well. That does not make sense.
  
  People argue if we if we reduce the tax subsidy or means test it for the top income group they would simply put their money elsewhere in investments. Yes, but they would not get the same tax concession up from and they would not get no tax on the way out.
  
  Plus we have the fact that superannuation private funds investments in residential property with all of its tax savings and benefits is only adding to the overheating of the property market. We have a whole plague of budget problems coming out of super that was never originally intended. And again this does not make sense, unless of course you are in that top income group which all of our politicians are.
  
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  - ejj:
    
    19 Mar 2015 5:35:16pm
    
    Correct
    
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  - rgb:
    
    19 Mar 2015 6:27:02pm
    
    hear hear
    
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  - Bill:
    
    19 Mar 2015 6:40:08pm
    
    I agree entirely.
    
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  - Sidneysaid:
    
    19 Mar 2015 11:34:59pm
    
    What is the income for the 'top income' group you refer to? The reason I ask is that people use the terms 'rich', 'high income earners', 'wealthy', 'fat cats' and the like when talking about 'reining them in' but exactly what amount of money are we talking about. We have some people who say anyone earning $70K is deemed as wealthy.
    
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    - John51:
      
      20 Mar 2015 9:29:09am
      
      Well Sydney, it all depends from where you are sitting. To someone on 30, or 40 or even 50 thousand dollars a year, $70 thousand sounds wealthy.
      
      But seeing the highest income group I spoke of is those who earn $180 thousand or more, $70 thousand is not very wealthy. And compared to even to our Backbenchers in Parliament who are on $200 thousand or more and Ministers who are on the high $200 thousand to high $300 thousand, $70 thousand is certainly not that wealthy.
      
      You see when I am talking about wealthy I am talking about people up in 1 to 3 percent income group. And they are up in the stratosphere income group compared to even so called average earnings of which only about 25% of people earn. And if you include all income groups, pensions your figure of $70 thousand is probably up in the top 20 percentile of income groups if not higher.
      
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    - Realist1:
      
      20 Mar 2015 10:09:44am
      
      Do you know how much average weekly earnings are? But try as I might I m still confused what do you consider to be these super wealthy?
      
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    - Big Fred:
      
      20 Mar 2015 11:17:51am
      
      I would define the super wealthy as all those in the top 10% of income earners. And all those who have numerous assets (hidden as they are from public and acountable Transparency) as the super rich in Australia.
      
      As Thomas Piketty wrote in "Capital in the 21st Century" in 2014. What government and society needs to do is to "Have Transparency around the assets of the "Rich" then we can modestly Tax them on their assets and not just their Incomes"
      
      Piketty is a self confessed "Capitalist" but is alarmed and so should everyone outside of the super rich and powerful that Western Society has drifted far too far to the right and has financial systems in place that benfit the "Rich" far too much to the detriment of everyone else in society.
      
      There is of course more to the story but their is neither time nor space to extrapolate on the whole situation.
      
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    - Mulky:
      
      20 Mar 2015 9:33:00am
      
      I don't think I have ever seen anyone call someone on that figure rich or wealthy. A single person is quite well off though.
      
      What I have seen is people on over 3x that figure cry poor and that is the danger here. So many of those on significantly higher incomes believe themselves to be getting by. Just last week there was an article about housing affordability and negative gearing where the author was looking at ways to suppress housing growth for the benefit of younger generations. Someone commented that they disagreed with the author because they needed the rent from their two additional properties to supplement their pension. Just let that sink in, an older couple with three homes was still eligible for a part pension and, more importantly, considered themselves to be scraping by.
      
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    - Caffettierra Moka:
      
      20 Mar 2015 12:23:04pm
      
      Someone tried that one on yesterday. Based on the ABS data from May last year, an annual income of $70K falls into the 60th percentile for Australian incomes. The top percentile is $113K+.
      
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  - Jane2:
    
    20 Mar 2015 1:07:56pm
    
    Wrong.
    The majority of the benefit goes to people who are in the 3% tax bracket as that is where the majority of people are.
    
    Only 15% of people are in the 37+% bracket, 2% in the 45% bracket and they can only contribute the same amount as you at this concession rate.
    
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- The Other John:
  
  19 Mar 2015 8:04:56pm
  
  Like all Green left hairball thought bubbles, the beauty of your argument is always limited to the ideological theory.
  
  Try to implement a cut off in a fair manner, without disincentivizing those who sacrifice so as to save for their retirement. Or how do you stop those on the margins from simply gifting their money to their kids
  to pay out mortgages prior to their retirement.
  
  As with all good socialist policy, once you focus on the practical, it all comes crashing down like Wayne Swan's budget surplus promises.
  
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  - bkeniry:
    
    20 Mar 2015 10:38:22am
    
    "Or how do you stop those on the margins from simply gifting their money to their kids to pay out mortgages prior to their retirement."
    
    That sounds perfectly acceptable to me. Sure, it means someone is getting a pension who otherwise may not have, but there again you have someone being able to pay off their mortgage who otherwise might not have.
    
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    - Dapsta:
      
      20 Mar 2015 2:42:32pm
      
      "it means someone is getting a pension who otherwise may not have, but there again you have someone being able to pay off their mortgage who otherwise might not have."
      
      Absolutely not ok. Why on earth should anyone subsidise someone elses unearned inheritance or cash windfall.
      
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  - crow:
    
    20 Mar 2015 2:05:20pm
    
    and as usual, you mistake partisan insults with having anything useful to add.
    
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  - crow:
    
    20 Mar 2015 2:05:24pm
    
    and as usual, you mistake partisan insults with having anything useful to add.
    
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- Comrade:
  
  20 Mar 2015 12:05:27am
  
  No. If the CIS is recommending it, there's a catch. I once supported such measures, and was opposed to "churn".
  
  But means testing destroys universality. It transforms an entitlement for all into a benefit for some. It makes welfare a devisive issue, creating an us (the payer) and them (the receiver) mentality that inevitably leads to petulant demands to scrap or reduce the "benefit" to "bludgers" who couldn't be "bothered" to put money aside for their old age.
  
  Pension benefits must be available to all. How to pay for it? Estates tax on those "over-capitalised" homes which were being "preserved" for the children. Inheritance is incompatible with a meritocracy.
  
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  - James in Brisbane:
    
    20 Mar 2015 10:48:01am
    
    It's not meant to be universal, it's meant to be welfare. There are one group of people who benefit most from exempting the family home: the beneficiaries of the estates of the pensioners - these exemptions are meant to protect the inheritance, not the lifestyles of the parents who own the houses.
    
    Our retirement income system is broken - we have a system which incentivises people to save for their retirement, but then provide a pension, so those who screw up their retirement savings get rewarded for doing so.
    
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    - Jane2:
      
      20 Mar 2015 1:14:09pm
      
      And here I thought exempting the home was to ensure that someone who had bothered to get a home and own it out right would not have to worry about rents rising faster than benefits and be looking at a future of homelessness.
      
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  - buckettea:
    
    20 Mar 2015 11:26:52am
    
    by that logic we should pay the dole to everyone as well.
    
    i've actually heard that suggested once... if we went down that road would it stop those of us working calling those of us not 'bludgers'?
    
    i wonder...
    
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- Jack44:
  
  20 Mar 2015 11:56:46am
  
  Define "greater means"
  
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- Jane2:
  
  20 Mar 2015 12:53:18pm
  
  Totally disagree.
  Agree with getting those with greater means off payments but totally disagree with "real savings".
  
  I know someone who gets $1 a fortnight. Stopping that only saves the government $1 per fortnight.
  
  Those at the top end have structured things so that they get a few dollars only enabling them to qualify for the healthcare card which most dont use as that would require them to "go public"
  
  Changing the thresholds will not create "great savings" it will only create "tiny savings"...note: I am not saying we shouldnt do it.
  
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unemployable:

19 Mar 2015 4:11:46pm

Unemployable, no super, no pension, no money and therefore pay no tax

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- Alfie:
  
  19 Mar 2015 4:33:20pm
  
  Who is "unemployable"?
  
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  - revitup:
    
    19 Mar 2015 4:51:54pm
    
    Any Australian who`s job has been fulfilled by one of the 1.1 million 457 visa holders.
    
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  - unemployable:
    
    19 Mar 2015 4:53:15pm
    
    I am
    
    Getting over hernia operation so there goes the trade background until I am allowed to lift more than 1 kg
    
    and now 600 kms west in hospital for 3 ,months of treatment
    
    am I still employable?
    
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  - ejj:
    
    19 Mar 2015 4:56:23pm
    
    Every-one that does not want to be self wemployed!
    
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    - Connie41:
      
      19 Mar 2015 6:16:13pm
      
      What infernal rot! How does wanting to be self 'wemployed' or even self employed equate to being able to be self employed? Or actually making a living self employed if one can afford to start something. I have tried several times. I succeeded in loosing money and failed to get any self employment going.
      
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    - ejj:
      
      19 Mar 2015 7:23:40pm
      
      If you cannot work for yourself then you are unemployable.
      Why should any-one else pay for some-one who cannot work for themselves.
      Grow up - the world does not owe a living - you must contribute and be responsible for your own destiny.
      
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    - bkeniry:
      
      20 Mar 2015 10:44:29am
      
      There are an awful lot of people who are really good at their jobs who couldn't successfully be self-employed.
      
      Being successfully self-employed requires being able to do more than just doing your job well; you have to be able to run a business well.
      
      You could be the best computer programmer, engineer, systems analyst etc. in the world and not have the business skills necessary.
      
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  - John51:
    
    19 Mar 2015 5:16:07pm
    
    Well Alfie, it seems to both government and private employers a lot of us are unemployable. If we are young, if we are old and if we have a disability we all struggle to get our foot in the door let alone a job. Those are the facts for a lot of people out there.
    
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  - awake:
    
    19 Mar 2015 5:42:01pm
    
    Over 65, female, no super, stuffed up by employer/board. Don't talk to me about unfair dismissal and work cover - just forget all that unless you have a solicitor and pay heaps, it all downhill.
    
    Disgusting what boards can do and there is stuff all anyone can do - Without MONEY.
    
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    - Relax Now:
      
      20 Mar 2015 11:02:48am
      
      Duh,
      
      retire, enjoy your super, or a pension or both.
      
      Stop bleating - if you have previously worked (as you suggest) then what's this no super business. And you can access the pension.
      
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    - sharra:
      
      20 Mar 2015 12:45:45pm
      
      It is very easy for a female to have no super. I worked all my life with very erratic super or simply none at all while my brother has over half a million in super in the same period. When I started working many employers were fighting not to pay equal pay and were refusing to pay super until the woman was over 25 so there was no super for young people. Also the little super I did earn was less than the fees charged by the fund so there simply was no super at all until I was in my 40's.
      
      There is a different world for men and women from our age group. Since then laws have been passed to stop this sort of thing happening so future generations should be different. Women in their lat 50's and 60's will not have much super at all unless they had high paying jobs.
      
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- New World:
  
  19 Mar 2015 4:48:52pm
  
  There is still a requirement for funds to keep you in food shelter, clothing and the rest of it. There is still a requirement of a set payment so your needs are met, and the same goes for aged people not working, there is a requirement for a minimum payment for people to get by. Unemployment payments do not cover minimum payments, now the author suggests aged people have income reduced, now that is not how it should go, the way it should go people's needs require meeting even the unemployed, so pension payments and other government payments are required by people to make sure ends do meet. It is stupidity to say have less and starve, that's poor form for governing people, when some are very wealthy.
  
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  - ejj:
    
    19 Mar 2015 5:39:25pm
    
    Except for trauma we are all masters of our destiny.
    
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    - New World:
      
      19 Mar 2015 6:16:51pm
      
      "Except for trauma we are masters of our own destines"
      
      I disagree with that. I looked for a job for 8 years, but was not given the opportunity for employment. Now you cannot do much unless you are given opportunity. There will be many young and older workers who can testify employers disregard them.
      
      You are very wrong.
      
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    - ejj:
      
      19 Mar 2015 7:26:27pm
      
      You may believe that I am wrong - but having my attitude and work ethic has not made me poor.
      
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    - gbe:
      
      19 Mar 2015 9:01:03pm
      
      I don't believe you tried very hard at all. My next door neighbour is 72 and was getting bored and decided to work.
      
      Got a night fill job at the local supermarket with one phone call.
      
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    - Relax Now:
      
      20 Mar 2015 11:08:22am
      
      Indeed, sometimes, despite all of our trying - the situation just won't improve.
      
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  - Jane2:
    
    20 Mar 2015 1:20:00pm
    
    The trouble is determining what are needs.
    I know some full old age pensioners who save money, go holidays and pay for all teh maintenance on their houses. i know others who are on precisely the same amount of money who cry poor and are getting food parcels.
    
    Our pension is enough to meet the needs of someone who owns a residence out right and does not drink or smoke. It is a struggle for renters or people with vices. Should we increase it to make it easier for some and thus increase the savings and holidays of others?
    
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- JamesH:
  
  19 Mar 2015 5:45:16pm
  
  Now that is sensible and they start with you unemployable.
  
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Hoju:

19 Mar 2015 4:15:42pm

$22 billion over 10 years isnt a lot of money?

We really are in a rush to be like Greece.

Of course, who should lose out is another question. And until the Coalition looks at rich people and the pension we know they are not serious about this crisis.

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- Andrew Thomas:
  
  19 Mar 2015 4:57:34pm
  
  Hi Hoju,
  
  I tend to agree.
  
  I think if last year's budget shared the load more evenly, the current government would not only have had more luck in the senate, they would have also raised much more revenue.
  
  Some commentators have interpreted Australia's general rejection of last years budget as a sign that Australians have no stomach for reform. Perhaps it is more the case that most Australians simply aren't comfortable with the poorer and more vulnerable in the country doing too much of the "lifting", so the richer may continue to get away with too much "leaning".
  
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  - The Other John:
    
    19 Mar 2015 8:09:34pm
    
    Shared the load?
    
    Mate, the only ones sharing the load are those already paying almost 50% in tax on their earnings. Anyone on less than$180k has not had to fork out any additional tax at all as a result of the last two budgets. There has been no real tangible change to any of the welfare payments in the past 2 years, and yet you lot keep banging on about "sharing the load".
    
    This is just code for "I want someone else to pay my share of the load".
    
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    - Homer:
      
      20 Mar 2015 3:01:57pm
      
      Seems to me the greed that drives people to become rich in the first place is the same greed that stops them from being willing to share their wealth. Bit of a catch 22 really.
      
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    - The Other John:
      
      20 Mar 2015 3:54:41pm
      
      Homer, the rhetoric is best left to the ABC.
      
      Those earning over $180k now are basically paying the tax burden for more than 30% of the rest of the nation who for whatever reason, just can't be bothered. This is a fact.
      
      Those who could, but do not, earn enough to pay more tax are the ones who are not pulling their weight, and anyone earning $180k a year is well placed to ask why?
      
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  - RoxyR:
    
    19 Mar 2015 9:20:29pm
    
    AT,
    
    I think to a large degree you are right
    
    However, there is a third point you've missed. Most Australians want reform, as long as they don't have to pay for it.
    
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- John51:
  
  19 Mar 2015 5:27:11pm
  
  Of course they are not serious. As soon as they ask Hockey about increasing taxes for the rich, cutting benefits for the rich and cutting out tax loopholes for the rich. What we have is Hockey squirming, looking at his feet and making excuses. Oh, and what excuses including its their money.
  
  It seems the pension is not their money for the poorest in our society. Yet benefits for the rich and subsidies for the rich and tax loopholes for the rich is their money. It seems you are not to tax the rich while at the same time providing all of the subsidies and loopholes under the sun to the rich. It seems you protect your own and throw the rest on the scrap heap.
  
  Oh, that is right the rich are the lifters aren't they which it seems in the eyes of Hockey the rest of us must be the leaners. It seems it does not matter how you got to be rich you must be a lifter. It seems you could't have done any leaning on the tax system to get there, to become rich.
  
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  - Jane2:
    
    20 Mar 2015 1:25:44pm
    
    The trouble is in defining who is rich. If an Australan earns $80k they are in the top 20% of income earners, therefore they are rich although I can guarantee they dont think they are and dont think they should be paying 1 cent more than they already do.
    
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billytansy:

19 Mar 2015 4:15:54pm

$60.000 in the building society a good accountant = medical card and part pension.

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John Coochey:

19 Mar 2015 4:18:00pm

Does that include the family home? Or introducing a death duty or reverse mortgage obligation on those who have not provided for their retirement.

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- Dave:
  
  19 Mar 2015 5:14:01pm
  
  "Does that include the family home?"
  
  If it doesn't, the inevitable consequence is that those with good accountants move from their ordinary home to a grander more expensive joint in the years leading up to retirement so as to reduce the amount in the bank and qualify for more pension. If it's not a home you raised a family in, is it still "the family home" or is it just a welfare rort?
  
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  - Mark of SA:
    
    19 Mar 2015 5:38:39pm
    
    "If it doesn't, the inevitable consequence is that those with good accountants move from their ordinary home to a grander more expensive joint in the years leading up to retirement so as to reduce the amount in the bank and qualify for more pension."
    
    You will have to explain this to me.
    
    A bigger house = less money to spend & bigger expenses to maintain this more expensive house.
    
    On what basis would this give me a better standard of living as a pensioner?
    
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    - Freddie Frog:
      
      19 Mar 2015 6:11:58pm
      
      A house just expensive enough to gain the health care card and the pension and you'll be doing just fine.
      Or the deal where your children pay for the house upkeep, safe in the knowledge that they'll be in for a massive windfall gain when you die. All subsidised by the taxpayer.
      
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    - RoxyR:
      
      19 Mar 2015 9:22:41pm
      
      FF,
      
      There's one aspect about the average Australian you have to admire.
      
      No matter what the politicians come up with to "solve" the problem the average Aussie will find a way to get around it.
      
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  - ejj:
    
    19 Mar 2015 5:43:46pm
    
    Good point - but the more your assets increase then you need more income to keep them - the pension decreases as your assets increase. If you have an expensive family home then you have expensive rates, insurance and maintenance.
    
    I do not think you have completed a cost benefit analysis on your comment
    
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    - John Coochey:
      
      19 Mar 2015 7:03:40pm
      
      eji, point one rates are levied on the UNIMPROVED value of the land so the cost of the house is irrelevant and if your children are paying your insurance waiting for your demise then that is also irrelevant. Why should someone who has saved for their retirement be treated differently from someone who has simply increased their lifestyle by buying a better house?
      
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    - Fred Times :
      
      20 Mar 2015 1:57:23am
      
      ejj.
      
      As in the case of the family home and case in point as you have outlined. I strongly disagree.
      
      If you move to a more upmarket accomadation it does not automatically mean that you need more to maintain a large sprawling asset.
      
      Case in point. You sell a large sprawling family home say being a "Rich Person". You then locate to a suburb where the land value increases rather substantially. You move then into a smaller accomodation facility. Say from a 6 bedroom, 4 bathroom the works mac mansion into a superbly designed architectually house with say 3 or 4 bedrooms and 2 bathrooms. Now the latter purchase costs heaps more because it is in a more inner city or city beach location. The land is where the real value is. As any aspiring real estate agent will tout "Location, Location, Location.
      
      Now ejj this is but one simplistic scenario. Most Rich Persons are very well adept at handling their finances and their assets. Wether they manage them personally or through smart accountants or family members is completely irrelevant. Their finger on the pulse is to aquire and maintain and increase their assets at all costs. In other words "GREED".
      
      ejj I would suggest your explanation "Simplistic" and "Insulting" to anyone who can think for themselves.
      
      The wealthy classes are not so stupid as to put themselves into such positions where it costs more to maintain a lifestyle (given all the Tax Loopholes and Tax subsidies they currently enjoy to further their wealth by doing very little except to make the poor and lower and vulnerable classes pay to maintain their apparent excess) whereby its going to act detrimentally to their assets and financial situation. They are not that stupid. It is Greed that is the driver of their complaints and conciet.
      
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    - Rae:
      
      20 Mar 2015 11:58:38am
      
      Why is saving and investing classed as greed.
      
      Every year the rates, insurances and prices go up.
      Right now it costs me close to $200 a week to live in my own home and that is rising at about 6% per annum.
      
      It is impossible to predict just how much will be needed in retirement.
      
      Now I believe that saving and investing 10% of all money crossing my palm is wise not greedy. That is I pay myself one dollar out of every ten. Diligently save it and invest it.
      
      Year in year out from my first job at 14. I cleaned builders cottages back then.
      I built a small cottage with my husband and still live in it.
      As a widow I raised three kids on one wage and still saved that one dollar out of ten.
      My kids now treasure the memories of camping in the bush and the fortnightly video and home made pizza nights.
      They all save for that rainy day.
      
      It is so much harder to get a job today. People will need to become more self reliant. As the boomers age there will be jobs for those willing to assist them to stay at home. I no longer mow my lawn for example or cut my own hair. Eventually I foresee having to outsource a lot of the jobs I now do for myself. It will all cost me money I will need to provide somehow.
      
      I happily pay taxes for the investment incomes.
      
      I fully believe those that spend all their money week to week on unnecessary purchases, entertainments or whatever to be wasting resources.
      
      We have resource depletion coming up and the crazy living standards of the past two decades, built on borrowed money, will no longer work. Living standards will fall. People used to making do,repairing and saving will find life easier than those constantly needing to spend and consume.
      
      This isn't a generational thing either. There are savers in every generation and spendthrifts as well.
      
      If providing for the future is greed then what do you call the opposite?
      
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    - Big Fred:
      
      20 Mar 2015 5:05:36pm
      
      Rae.
      Past a certain income or past a certain amount of assets it does indeed revert to greed. The fact that the wealthy and the powerful can access Tax Loopholes and Tax Subsidies (ie Superannuation investment top ups that specifically support the very wealthy in our society at the expense of everyone else) and Tax Minimisation Schemes (that are only exclusively practable to those who indeed have enough wealth to actually be of use) is GREED.
      
      It is Greed in the sense that with smart accounting a lot of wealthy people can hide their assets from Transparency and that means no one really knows what they own nor do the government or ATO even really bother to examine and find out'
      
      However the very same persons then bleat about persons who rely on welfare just to get by using all the discredit and divisive tools under
      the sun that those in Neo Conservative politics and mindsets always are pushing. These persons go out of their way to deliberately create division in society so that they may continue to profit and gain at the rest of society's expense. The Neo Conservative mindset is very well organised, is very powerful and the most part has it hands on the levers of Big Business, a Fossil Fuel Corporate agenda and continues to sell off the Commons so that the Corporates can profit at the expense of society.
      
      Society thus becomes for the majority nothing but slaves to those rich and powerful political and Corporate interests. In order to push the Reset Button society needs to change the basic rules around Tax and legalised Tax avoidance and the ongoing gift of ever more profit and wealth to the top 10 percent of Income earners and the Top bracket of Asset holders whoever they may be. It is unsustainable and the only reason for its continuing existence is GREED.
      
      That is basic Common Sense. It is not targetting the majority as Greed obsessive . Quite the opposite . But the misinformation and subterfuge continue unabated.
      
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  - Corsair72:
    
    19 Mar 2015 6:40:58pm
    
    A house is someones home, as we have seen in Sydney just because sombody bought a reasonably priced cottage sixty years ago and has seen it increase in value to extraordinary levels doesn't mean that they should be forced to sell their home theyve lived in for decades to get a cash stream. A house is a home for most of us and being forced to sell it due to the bitterness of some lefty should be resisted at all levels.
    
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    - PeterH:
      
      20 Mar 2015 9:54:22am
      
      Of course they shouldn't be forced to sell their home but when they die (or decide to sell) the Government should be able to recoup the cost of the pension paid to them.
      
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    - crow:
      
      20 Mar 2015 2:17:16pm
      
      why should it be exempt, other than simply so you can hurl 'lefty' insults around?
      
      why should someone with a $750k house get a full pension, but someone who has the same $750k sitting in their bank get nothing?
      
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    - crow:
      
      20 Mar 2015 2:17:20pm
      
      why should it be exempt, other than simply so you can hurl 'lefty' insults around?
      
      why should someone with a $750k house get a full pension, but someone who has the same $750k sitting in their bank get nothing?
      
      Alert moderator
A pocketful of wry:

19 Mar 2015 4:18:51pm

"There are only two ways to reduce the structural burden of the age pension on the federal budget"

Rubbish. The pension is being utilised far in excess of its original rationale when introduced because of both (a) a lowering of the mortality rate, and (b) an increase in time spent among us by those who have yet to succumb to the mortality rate.

Both causes sheet home directly to the medical profession.

THEY are responsible for the budgetary mess we're in because of this gold-plated "healing" rubbish they're peddling. Taxing them at the appropriate amount to offset the consequences of their handiwork seems an eminently sensible option to me.

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- Keith:
  
  19 Mar 2015 4:46:04pm
  
  That, pocketful of wry, is gold!
  
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- Rancid Remark:
  
  19 Mar 2015 5:10:49pm
  
  Still laughing pockets!!
  
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- John51:
  
  19 Mar 2015 5:37:43pm
  
  I suppose you don't go to the doctor or have your family go to the doctor no matter how sick they get. Is that what you are saying because it seems to be what you are saying.
  
  I hope you aren't saying the poor or less well off shouldn't go to a doctor. And that is because the the data tells us the poorer you are the shorter your life span. There is about 6-8 years difference in average life spans between the rich and the poor.
  
  As for length of life I hope you didn't believe that rubbish of Hockey's intergenerational report. 40,000 people in Australia living a hundred years or more and the average life span being in the mid 90's. Go and have a look at the modelling and the way they used the findings to make their flawed assumptions. It is a lot of crock put together to con us all. That report is not worth it value in scrap paper.
  
  Alert moderator
  - A pocketful of wry:
    
    19 Mar 2015 6:16:35pm
    
    Reads more like John 10:27 to me.
    
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    - John51:
      
      19 Mar 2015 9:02:28pm
      
      I have not met that John 10.27 so it is a bit hard for me to say whether I read more like him or not.
      
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- Big Bob:
  
  19 Mar 2015 10:56:20pm
  
  I have to agree with you even though it does sound cruel, but people forget we are a part of nature and nature has a design when it comes to old age and infirmity, it is being eaten by the predators or succumbing to disease and is a natural way of thinning numbers to reduce population.
  Also as a way for the younger members of the herd to not get eaten instead the old ones get caught and munched.
  
  Hell watch a nature documentary people, we have effectively robbed nature of her ability to cull the old of our species and now we have to pay for it, between over population and declining resources and increasing expenses.
  
  Sorry to be cruel but that is nature and life, where do we draw the line?
  What about pushing life spans to 200 or 500 or 1000, christ I would not want to see what that world would look like.
  
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  - euc:
    
    20 Mar 2015 12:42:25pm
    
    Next thing you know, you will be wanting children with Down Syndrome to be euthanased at birth. We know what happened when another man with the same ideas came to power. He had a little moustache.
    
    We owe these older people for building the roads, the Snowy mountains and Ord river schemes, railways, etc. and putting us into the 21st century in good shape. There are far better ways to fix the economy other than putting down the generation we owe so much to.
    
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  - Cyn:
    
    20 Mar 2015 12:59:11pm
    
    "people forget we are a part of nature and nature has a design when it comes to old age and infirmity"
    
    Nature also gives us the instinct to try and survive for as long as possible, so you can blame our longevity on nature's success in evolving us to have the ability to be able to create near ideal circumstances for us to survive and reproduce.
    
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- Cyn:
  
  20 Mar 2015 1:10:48pm
  
  I would certainly prefer dealing with the problems created by having doctors than the problems we would have by not having them.
  
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r u serious:

19 Mar 2015 4:20:11pm

There are plenty of ways to make Age pensions more sustainable and more fair.

The Liberals are unlikely to look at them because the changes would alienate their power base.

Abbott has continually poiticised necessary and sensible reform of every sort. It is poetic justice that his government is caught in it's own trap.

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- The Other John:
  
  19 Mar 2015 8:11:45pm
  
  Just as it is poetic justice that the public service and those who are most in need of welfare support will ultimately be the ones who pay most dearly in 10 years time, right?
  
  What happened to the "compassion" of the left?
  
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Rancid Remark:

19 Mar 2015 4:22:54pm

Attaching our pensions to inflation is not a great idea, we are living from dollar to dollar now and things are not getting easier, I think Mr Morrison should read your opinion and take it into consideration.

I don't want to worry Morrison but he has to remember that pensioners, like the rest of the population are required to vote and he knows as well as everybody else that the amount of baby boomers coming on line for the pension is growing substantially every day. So, I ain't saying what he is doing is right, wrong or indifferent, all I'm saying is "You upset the oldies you upset your own apple cart."

Oh yeh! for Mr Hockey, Most of us oldies drive cars too and can still drive ourselves to the polling stations, no matter where!

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- John51:
  
  19 Mar 2015 5:41:14pm
  
  Mr Morrison is not worried about having to live on that aged pension. Unless things changed he will have a nice fat super pension to live on and not taxed as well. How is that for setting yourself up while saying we need to take money from the poorest in society.
  
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anote:

19 Mar 2015 4:25:10pm

The Prime Minister's assurance that the May budget will be "pretty dull and pretty routine" is a retreat from his previous absolutely necessaries. It is still rhetorical flourish (spin, spin, spin).

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Laurie:

19 Mar 2015 4:29:19pm

Why not tie the pension payment to a % of the Back Bench salary.
They seem to be quite happy with the independent review.
It means that we can get rid of some bureaucracy at the same time

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- John51:
  
  19 Mar 2015 5:45:44pm
  
  Laurie, even better to tie the pension to a percentage of the Prime Ministers salary. Do you think they will back off from having salary increases each year. Maybe they can put the Prime Ministers and other Ministers and Parliamentarians salaries increases on hold for the next ten to twenty years. After all they say they want to cut costs to the budget.
  
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the Jones:

19 Mar 2015 4:29:33pm

As seems always the case, this government has no interest in imposing any impost on the big end of town and this also applies to pensioners. To the majority of reasonable people it's a no-brainer that the obviously wealthy should, by definition, not qualify as Government supported aged pensioners.
If Abbott & co continue to blame pensioners in general for the government's fiscal woes, they can be assured of a massive backlash from a very powerful voter lobby.

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- Rae:
  
  20 Mar 2015 12:11:57pm
  
  Exactly right.
  
  Wealthy intelligent people who have done well should need no government assistance in the form of pensions.
  
  Those less able should get the support.
  
  It isn't hard to figure that out surely.
  
  Alert moderator
Nova4avr:

19 Mar 2015 4:30:47pm

For some reason the Abbott Govt. just will not look to any other means of repairing the budget other than cuts to everything. Surely there are other areas in the pension payment scheme that could save a lot of money.
It does seem that there are anomalies in who can claim the aged pension or part pension & still have fairly substantial income & a multi million dollar house as well.
If this imbalance was rectified & the pension system overhauled so only those that are really eligible for it, would probably end up saving a lot more than the current reindexing policy.
This Govt. just will not tread on the toes of the wealthy or big business. We desperately need a Govt. for all Australians & not just a select few.

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- Big Fred.:
  
  19 Mar 2015 5:31:24pm
  
  Abbott boasted at his election win that his government "would govern for all Australians".
  
  Well Abbott Man It hasn't worked yet?
  
  The softening up and trying to imply you are a at least a little bit compassionate exerted of late by minister Morrison will not hold water.
  
  I see Morrison as a last ditch attempt to achieve Neo Conservative objectives through deliberate and disguised "Misinformation" to the electorate via the media outlets.
  
  I see the whole Abbott government desperately trying to convince the electorate that it is "Listenening" (another Sloganering Concept) as it drifts, dodges, weaves and sends out many different signals. In plain English. This Abbott government couldn't "LIE" straight in Bed.
  
  What we need for starters for the uptemmpht time (and I am aware that the Abbott government is aware dispite its "Listening".techniques ) is:
  
  End Negative Gearing or keep it at least ONLY For New Constructions in the housing sector.
  
  Increase the Capital Gains Tax to a 100%.
  
  Abolish the tax concessions currently available to wealthy so termed retired Australians which allows them to put their assets into Superannuation and pay only 15% tax instead of the 45 % plus tax that they are supposed to be paying. This alone will yield $50billion per annum. More than enough to offset current pension arrangements.
  
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dave:

19 Mar 2015 4:33:04pm

Absolutely, take wealthy people off the pension. The pension is a safety net, not some privilege for all and sundry. Why do we repeatedly see that politicians are not willing to take on the wealthy voters who are just plain greedy for as many handouts as they can get, even though these rich folks don't actually need them?

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GreyBags:

19 Mar 2015 4:36:46pm

Leaving aside those that are thrown on the scrap heap a decade before retirement and can't get a job despite their best efforts. They dream of the luxury of the pension.

Those with money tied up in assets should be allowed to stay where they are as they are part of a community and it is cheaper to look after people in the community than specialised aged care places. The money paid in pensions should then be taken from their estate otherwise we are actually subsidising the children or other relatives of the pensioner. Bring back Estate taxes as well.

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gerard oosterman:

19 Mar 2015 4:38:32pm

There is a third way to reduce the burden and that is to raise revenue so that good pensions can be paid for, good health can be paid for, a good education can be paid for.

May I remind Mr Morrison that in the Netherlands everybody gets a pension when 65. It is a basic pension and is not asset or means tested. It is also 50 % of average wage against 25% here.

I get a part Dutch pension because I worked there. Of course my Australian pension gets promptly reduced because of the Dutch pension. The Dutch Minister for pensions could not care less, rich or poor, and doesn't deduct anything. You get what you have worked for and paid tax for.

The notion that Australia is somehow a pensioner's Nirvana is totally wrong. Many live in struggle street and rely on meals on wheels and Smith Family hand-outs. It is scandalous the way Australia treats the aged.
.

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- Keith Lethbridge Snr:
  
  19 Mar 2015 5:21:41pm
  
  G'day Gerard.
  
  Good points old fella. The Dutch system sounds good to me, & would most likely cost considerably less to administer.
  
  What worries me is when rules are changed. Young folk have time to reorganise to adapt to changes, but older folk don't always have that opportunity.
  
  If thrift, saving & planning ahead are discouraged, who could blame people for not worrying about those things. That won't help the government's budget.
  
  Regards,
  
  Cobber
  
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- Freddie Frog:
  
  19 Mar 2015 6:16:33pm
  
  Because the % of working age people to pensioners will drop significantly over coming decades. If the ratio drops from 5 workers per elderly person, to 2.5, then the burden on workers will massively increase to support the pensioners. How is that possibly equitable?
  
  It's much more sensible to ensure each generation pays for itself to remove these sorts of issues.
  
  Alert moderator
  - Warthog:
    
    19 Mar 2015 11:14:33pm
    
    The real unasked question is Why should we be relying on workers to fund the pension or other welfare?
    The world's wealth has been increasing markedly but it's all being siphoned off to the 1 percent, while middle income and low income workers are stung for all the costs.
    A fair distribution of wealth would solve all these issues.
    
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Alfie:

19 Mar 2015 4:39:34pm

Here is a better idea:

The means test for a pension should be gauged on your average lifetime earnings and your assets. If you have earned a good income, but not bothered to save and/or have no assets to show, you should not be entitled to a cent.

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- Rancid Remark:
  
  19 Mar 2015 4:49:49pm
  
  Good thinking Alfie, you wombat! Not everybody has been lucky like you, A lot of us lost thousands of dollars of our super through no fault of our own. Recessions and downturns in the market have all but crippled a lot of us. If your going to make spurious statements at least have the decency to see all sides of the story and try thinking for a change.
  
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  - din:
    
    19 Mar 2015 5:30:06pm
    
    I agree with racid
    
    there will be those who spend a lot of their money raising children - who will then be paying taxes
    
    You cannot punish them since they didn't save as much as a person who never had children,
    
    Alert moderator
    - Alfie:
      
      19 Mar 2015 11:30:42pm
      
      You really are a pack of greedy socialists?
      
      While it might be beyond your comprehension, you can actually raise children and save money. Most Australians can anyway.
      
      Alert moderator
  - A pocketful of wry:
    
    19 Mar 2015 5:37:00pm
    
    I must try and emulate your style more often Rancid. I offered-up a tender, gentle piece of mockery suggesting that the terms "better ideas" and "Alfie" don't, as a rule, find themselves on the same page, but was discarded by the powers that be.
    
    I had no idea there was a MINIMUM standard of personal abuse you needed to adhere to as well as a maximum one you weren't meant to exceed.
    
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  - Alfie:
    
    19 Mar 2015 8:08:12pm
    
    "Not everybody has been lucky"
    
    Who mentioned "lucky"?. All I am saying is - if you have earned a respectable income, living on a pension should not be an *expected* entitlement. Every working Australian should be able to contribute to superannuation and thus, support their retirement.
    
    Superannuation has been mandatory for years now, it is time we draw a line on those who expect to live on taxpayer handouts.
    
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- Hobbit:
  
  19 Mar 2015 6:18:42pm
  
  Are you saying that people who looked after their children or are disabled and could not earn should die of starvation on the street when old and/or unemployable?!?
  
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Pete:

19 Mar 2015 4:39:39pm

The pension stopped being a 'reward' for living a long life 3 decades ago with the introduction of compulsory super. It's a safety net, and should be treated as such: available to those with few assets, and able to provide a decent standard of livlng. While increases in line with male earnings are part of this anachronism, the author's suggestion that we get wealthy people off the pension makes enormouse sense. The next generation of pensioners worked in a super system, and with the extremely generous tax treatment of the family home, shouldn't be making a call on finite welfare where they can provide for themselves. That is what super is for. I expect the usual grey army "By we built this country" moans. Yes you did, partially, but you also consumed during your life, and in fact we have a sizeable debt that suggests you over-consumed during that period, leaving it to the next generation to pick up the tab. A higher, redistributed pension would also assist older women, who through no fault of their own, end up with few assets for retirement - the benefits of superannuation accrue only to those in full-time work, of which women form a smaller proportion. Yes to a higher pension, and yes to restricting it to those with small super balances, or no family home to rely on. Those with large homes, multiple properties (due to negative gearing, and the luck of being born at the right time, not investment nous), or large super balances do not require a pension, because it's a safety net, not an entitlement for all.

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- ejj:
  
  19 Mar 2015 5:16:13pm
  
  Correct Pete,
  
  The current age benefit pension is far too generous especially if you some assets and income below the pension allowance limits.
  
  The posts on this site favour selling your assets to fund your life irrespective of your age.
  
  THe only solution is to hale a well structured wealth tax so that each financial year both an income tax and wealth tax value be submitted for all.
  
  The real problem is that our society requires income wealthy people to spend and not convert their income wealth into assets.
  
  A base value analysis of wealth and assets and income production is required to structure a society that can fund itself and also have a good standard of living.
  
  NOTE - It is only spending money that generates wealth for others.
  
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  - Rae:
    
    20 Mar 2015 12:31:33pm
    
    Our current financial system requires income earners to borrow funds and pay interest back.
    
    If that stops the ball game is well and truly over.
    
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- RoxyR:
  
  19 Mar 2015 9:35:50pm
  
  Pete,
  
  In addition we forget that when the pension was introduced, the life expectancy of those receiving it was very limited, maybe 3-5 years more tops.
  
  Now we have an aging population that is destined (in most cases) to live a lot longer while receiving that pension. So saying I paid taxes all my life wont cut it now, as there is a fair chance quite a few recipients will receive quite a bit more over the balance of their life than the taxes they paid.
  
  The solution will not be simple and there may well be a need to have more than one change if we are going to keep helping those in need.
  
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- Jane2:
  
  20 Mar 2015 1:39:42pm
  
  How do you define "through no fault of their own"?
  
  Chosing to spend instead of save is "own fault"
  Chosing to not buy a place, or still have a mortgage come retirement is "own fault"
  Chosing to get married/divorced/be single is "own fault" as you chose these states.
  
  Everything is "own fault" if you are being honest about it
  
  Alert moderator
ArtyFact:

19 Mar 2015 4:42:48pm

"If the government is serious about returning sustainability to the age pension it should look at some of the inequities in the pension means tests, especially those created by excluding the family home from the assets test. This ignores the higher living standards pensioners could achieve by converting this asset into income"

Brilliant idea Mr Taylor and once an eligible pensioner has sold their home, where do they live. Under the nearest bridge is my guess if this current government gets their way.
They won't all have huge bank accounts or superannuation balances to back them up.
Or maybe involuntary euthenasia when they reach retirement age at 70. I shouldn't have made that remark, it will give TA and his circus ideas.

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- SuzyQ:
  
  19 Mar 2015 5:30:50pm
  
  It's called a reverse mortgage, good sir. No one (I hope not!) is suggesting pensioners have to sell their homes out from underneath themselves.
  
  I think we are also talking about pension-receivers who have well-valued homes. Reverse-mortgaging my nan's very modest cottage in rural Australia would have seen her chew through the value in about 5 years, even with exercising her Depression-era frugality.
  
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- Connie41:
  
  19 Mar 2015 6:32:35pm
  
  Including a person's home in the assets test for a pension currently does introduce the problem of modest, older homes having gained excessive market value in highly favoured areas. If people living in such homes are forced to sell they are not likely to find a low priced home in the same area and will then be forces to move into another locality, often with poorer services. A way around this could be to make sure that there are affordable units in retirement centres within each community with enough capacity to house people retiring from nearby expensive houses.
  
  Oops! This would mean government stepping in to the holy market through planning and (horrors) possibly even government or community owned retirement housing. We can't have that, can we?
  
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  - Rae:
    
    20 Mar 2015 12:35:57pm
    
    Connie you are talking planning.
    
    Long term planning at that.
    
    I don't think that is going to start happening.
    
    The governments stopped any long term planning decades ago.
    
    Alert moderator
tom the accountant:

19 Mar 2015 4:43:27pm

There is certainly something to be said for Matthew Taylor's point about the exclusion of the family home.
For a long time I was of the opinion that it was not the fault of the person living in the home that it had increased substantially in value, end of story. And while I still believe the point holds some sway, I am intrigued by Matt's suggestion that the pension rewards those who have over capitalized on their home. It should not be a given that such a large asset is your children's birth rite at the expense of the tax payer who must financially support that goal with a pension.

I think a novel approach would be to treat pensions like a HECS debt. It is paid to you for income support and indexed annually with the debt being paid from the sale of your family home and other assets upon the death of you and your spouse.
Obviously there are finer points to consider such as provisions to protect dependents (such as the disabled or children being raised by Grandparents) and on the other side of the coin means to stop people transferring assets out before their death (accountants love sneaky things like that...); but on the whole I think it could bring long the benefits of a reverse mortgage without the cost of lining banker pockets.

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- Matt:
  
  19 Mar 2015 4:55:28pm
  
  That's an interesting proposal but I'm not sure it's analogous to an Income Contingent Loan. HECS provides an upfront payment for a (human capital) asset which you pay off when you have the income to afford to do so. What you have in mind seems more like a death duty calculated on the basis of the cummulative value of the income stream received from the pension. While I don't think that is a starter politically it's not a bad idea.
  
  Alert moderator
  - tom the accountant:
    
    19 Mar 2015 6:27:22pm
    
    I agree Matt my comparison to HECS was a bit clumsy, I suppose I was just grasping for an existing concept that covers the idea of a loan from government subject to indexation rather than interest with repayment contingent on an event.
    
    The other key pillar to my idea would be that if someone had to sell their home to cover medical bills the government would not seek to recover the debt because the assets are gone. So for those who fall on hard times in terms of health there is a safety net.
    
    Personally I see value in reverse mortgages but just hate the idea of all the profits the banks will gouge out on the way.
    
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    - Matt:
      
      20 Mar 2015 8:55:41am
      
      That's a valid point. I fully understand that pensioners use their assets to insure themselves against potential health problems, I just don't see why it is that we treat that asset differently when calculating pension entitlements. Liquidating your share portfolio will also pay for medical costs but we don't exempt that, we deem it.
      
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- The Other John:
  
  19 Mar 2015 8:18:30pm
  
  Why not just take all of the savings of those you don't like, Tom?
  
  I bet it crossed Wayne Swan's mind on more than a few occasions.
  
  Sort of kills off the incentive to work hard during your lifetime, and to save enough to self fund your retirement though, doesn't it? A bit like 1970's USSR really, isn't it? Lee Rhiannon will be all over your suggestion, I have no doubt.
  
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  - PeterH:
    
    20 Mar 2015 10:21:23am
    
    "Sort of kills off the incentive to work hard during your lifetime, and to save enough to self fund your retirement though, doesn't it? "
    
    I disagree. If you are really self funding your retirement what Tom is suggesting won't impact you at all. His idea would only apply to those who receive the pension.
    
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  - The Other John:
    
    20 Mar 2015 11:32:05am
    
    So it is all just black and white, Pete?
    
    You are either "poor" or you are "rich", never any practical consideration of the cut off, or the actions or reactions of future generations based on such legislative changes.
    
    This is why leftist ideology thrives in institutions such as universities and the law, where honest application of practical solutions is never required or considered.
    
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  - Rae:
    
    20 Mar 2015 12:44:25pm
    
    If you self fund you obviously don't get the pension.
    
    What you get is freedom.
    
    Freedom to do what you like with your money.
    
    I like Tom's idea.
    
    I also like my freedom very much.
    
    All this fussing over paying tax and getting something because someone else is getting it is a nonsense.
    
    Those managing their money for a piddling tax break or government freeby often give up profits and freedom.
    
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Big Ben:

19 Mar 2015 4:46:01pm

Thanks Matthew for an informative and convincing offering.

It is worth pointing out that you can remove the jack boots from the man but you can't remove the man from the jack boot that is the current Federal Liberal Party. Far right politics reign and Morrison will never divorce himself from the evil he is apart of. No amount of 'look at me I'm a changed and reformed man; I'm a good man now!' will ever convince me otherwise. He loved his previous job of stamping on the heads of the worlds most vulnerable.

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- whogoesthere:
  
  19 Mar 2015 5:04:39pm
  
  Oh come on. I'm no fan of the Government, but to call Morrison evil is just ridiculous. The Government was elected with 'stop the boats' as a clear policy. Morrison was fulfilling that policy objective, that's what is meant to happen in a democracy.
  
  I have worked with African refugees who have decades of suffering, they are happy to have the boats stopped as they hope it will mean more people from the UN Camps will have a chance. Are they evil too ?.
  
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  - Big Ben:
    
    19 Mar 2015 6:39:35pm
    
    G'day whogoesthere
    
    If you were to read my offering carefully you would identify that I never suggested Morrison was evil, I said and I quote "will never divorce himself from the evil he is a part of". You can be a part of evil but not be evil yourself. Take a look at many of the journalists who work for The Oz? Now there's an excellent example!
    
    Regards
    
    BB
    
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Gr8Ape:

19 Mar 2015 4:52:37pm

Many regional communities would benefit from people selling up in the big-smoke and moving there. But then of course their children move to the cities to improve their lot. And then there's the problem of healthcare being concentrated in urban areas.

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- The Other John:
  
  19 Mar 2015 8:21:42pm
  
  There is the advantage still of the sense of community that most rural towns still have, Gr8pe. Much more of a support network than in the cities.
  
  I mean, inner city Melbourne and Sydney, you can be surrounded by thousands of sandal wearing Greenies, hell bent on saving the world from itself and telling others how to live their lives, and yet they let the little old lady at the end of the road die alone and nobody finds her for 6 months. Makes you wonder.
  
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Malcolm:

19 Mar 2015 5:01:35pm

People are living longer and some like myself are past pension age and still work and pay tax etc. But if my job ceased tomorrow I'd be unable to find employment because of my age. The nation needs to accept that most of the people who eventually claim the pension have actually contributed to it through a lifetime of taxes paid and therefore deserve it, but at the same time it should work to keep older people off the pension if they still wish to work by legislating to get rid of agism in the work place, then people like me are one day just going to say well that's it I've had enough of this working for a living business I'm going on the pension because I earned it.

Besides that there are many many thousands of Australians whose working life was spent either wholly or partly in manual work and by the time they reach their 60s they are really getting physically past working. Start work at 16 as I did and when you get old you find that the variety of ways you worked to earn a living really catch up with you. I'm very glad my current job does not involve the physicality that other jobs I've had demanded. My back is stuffed, one knee is extremely painful due to an old injury and things like high blood pressure don't help.

As for reverse mortgages, severe means testing etc. do we really need to punish older Australians by providing more hurdles for them to leap when they have got to the age that should see some thanks for all the taxes they paid. Those are just the actions of the terminally mean spirited conservative outlook. We are not facing an economic crisis merely going through one of the periodic slumps the mining industry always has, so lets cut the panic talk.

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get real :

19 Mar 2015 5:05:19pm

Matthew,
Same old labour party rubbish. As an aside you will note that all labour party former PMs retire millionaires and no massive pensions. What you don't understand or want to understand is that in general people who retire with a little means have done so by (a) working hard all their lives (b) spending responsibilities (c) going without. It would then only therefore seen 'fair??!!' to punish them for their hard working lives whilst they who have done the opposite get the rewards.
GR

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- Big Ben:
  
  19 Mar 2015 6:52:40pm
  
  I don't know about all retiring millionaires, but maybe you are right.
  What I have come to notice empirically though is that when the conservative political class go to meet their maker tens of thousands of mere mortals hold wild street parties to celebrate their passing. When old Labor stalwarts depart good people provide the most magnificent eulogies to packed halls and standing space only outside. Odd that; or is it to be expected when one mob exploited the poor to enrich further the rich and told us how lucky we are to eat the crumbs that fall from the tables of the fortunate and the other mob did the exact opposite and gave a fair go to all?
  
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- The Other John:
  
  19 Mar 2015 8:24:13pm
  
  Most socialists have never bothered to understand how or what it takes by way of sacrifice to save enough for retirement. their mantra is to only ever consider ones circumstances in the here and now. you are always only ever "Rich", or "poor", or "rich retiree" or "poor retiree". There is never any discussion about the decisions over a lifetime that meant the difference between the two.
  
  You have got it, I want it, give it to me. The Greens political activist in full flight.
  
  Alert moderator
  - Big Ben:
    
    20 Mar 2015 12:57:49pm
    
    Thanks Other John
    
    But I fail to link a 'fair go' with the desire for 'free wealth'. Have a listen to one of your own, the late Malcolm Fraser, he said, and I quote, "the fair go has gone". Malcolm was never a Conservative he was a small 'l' liberal; as all policians from all sides of politics should be.
    
    Vale Malcolm Fraser.
    
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  - The Other John:
    
    20 Mar 2015 4:01:28pm
    
    Why has a "fair go, gone", Ben?
    
    What is stopping anyone, anywhere in this country from achieving anything they set their minds to? Real barriers, tell us where you think they are and your solution to fix it, if you can?
    
    What has gone is the incentive to try harder, to take a risk, to work hard and to be able to enjoy the fruits of success without being labelled greedy. We have now generations of those who believe that just existing is all they have to do, all they owe to their society, yet that society owes them everything in return, funded by someone else's hard work.
    
    You think the left has the monopoly on compassion? Ask yourself why the ALP and Greens never speak of encouraging people OUT of poverty, they only speak of giving them more money, locking them into a lifetime of soul destroying welfare dependence, and all in the name of compassion.
    
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Losimpson:

19 Mar 2015 5:08:14pm

A few days ago the funding for university students was cleverly labelled a solution looking for a problem but where pensions are concerned the opposite is the case. The situation is crying out for rectification. Immediate actions are available but the Government is too frightened or too stupid to put them into effect.

What about this. Make superannuation be taken as a pension until it runs out with no age pension being simultaneously paid. Dramatically reduce the tax incentives on super contributions said to cost $40 billion and lock them up until retirement. Introduce a reverse mortgage regime for those sitting on expensive properties.

Lets look at the figures after doing this.

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David Ferstat:

19 Mar 2015 5:20:05pm

The author writes:

"There is a case to be made for pensioners to shoulder some of the burden of budget repair ..."

Oh? Then make it, please.

The aged pension does not, in fact, keep up with the cost of living, and is actually below the Australian poverty line.

Why, then, is it the responsibility of pensioners to fix the budget?

No reason, other than, like the rest of Australia's poor, they are seen by this government as the rightful recipients of this burden.

Yet again, this government seeks to takes money from the poor, while still maintaining its largess to the rich.

Robbing hoods, yes. Robin Hoods they are most emphatically not.

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- ejj:
  
  19 Mar 2015 5:54:31pm
  
  The rich are rich because they do not spen their money.
  
  The poor are poor because they spend more money than they have.
  
  Asset Wealth must generate an income rather than a liability.
  
  If the government taxes asset wealth that is not providing an income then the tax-payer must have additional income to suppoert the tax liability.
  
  The pension is not indexed to increase on wealth it is indexed to decrease on wealth.
  
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- Kerrie:
  
  19 Mar 2015 5:55:14pm
  
  My husband and I are in our mid-40s with an average mortgage and repayments of about $25k a year, tax at about $20kand living expenses for 4 people on the remaining $40k. My husband and I would have higher disposable income if we were pensioners because we would have no mortgage, no tax and no dependants and a pension of $30k.
  
  I feel sorry for pensioners, but I think some home-owning pensioners get carried away with their impoverished lifestyle rhetoric. They are doing it as tough as "rich" mortgage paying tax payers. My husband and I aren't complaining about the high price of houses, high taxes or high unemployment: we just object to the government trying to make our financial lives harder through proposed changes to family tax benefit b, deregulated uni fees and "earn or learn" for our teenaged kids.
  
  Alert moderator
  - Big Fred:
    
    20 Mar 2015 11:51:00am
    
    Kerrie. Agree strongly. The people in your situation (the forgotten or ignored by this Abbott government) are indeed in the crossfire.
    
    You are the strivers and bedrock of society in these times. No way are the Asset rich wether or not they are also Cash rich or Cash poor are the ones that need support. Who in reality knows what is the truth when the Asset rich can easily afford "smart acoountants".
    
    Of course this class of Asset rich always bring up the examples of the Great Depression era , World War Two demographic to make spurious and emotive "Emotional Blackmail" political and propaganda point scoring. This demographic however is fast passing on.
    
    You cannot equate the situatioin of the current "Free Market" winner take all society in which the majority of us struggle as a norm to the
    ongoing support of the top 10 percent of income earners and Asset holders in society. It will continue and ramp up more to induct more of the majority to simply become simply
    "Free Market" slaves as you have indicated Kerrie.
    
    As Thomas Piketty wrote in "Capital in the Twenty First Century" last year in 2014.
    
    "We need to have Transparency around the Assets of the Rich. Once we know what their Assets are then society can Modestly tax the rich on their Assets and not just on their Income."
    
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din:

19 Mar 2015 5:26:14pm

those created by excluding the family home from the assets test. This ignores the higher living standards pensioners could achieve by converting this asset into income,

and that's the crux .. the oldies need to sell their family home, and move away from their support, in order to have income to pay their bills if this happens.

Or set up a negative mortgage so they get income from their home But if they live long enough, they could end up with no home, and no money.

no thanks. leave the family home out of the asset test would be my call.

I wonder if Shorten is willing to voice an opinion on including the family home as 'assets' , and thus see people lost a large amount of their pension ?

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- ejj:
  
  19 Mar 2015 7:33:48pm
  
  You are right "din" .
  
  Assets are different from Income.
  
  The more assets you have the more income is needed to support the assets.
  
  Alert moderator
  - mickp:
    
    20 Mar 2015 12:35:14pm
    
    Don't know what planet your on but where I live, assets tend to generate income - ever heard of deeming?
    
    Alert moderator
- michele:
  
  19 Mar 2015 9:47:21pm
  
  I agree - otherwise we punish those that worked hard and saved up to own a nice family home.
  
  Those that spent it all while young get to have a pension from the start - plus all the fun they had spending their own money - but you would have the more frugal paying their own way first?
  
  There has to be an approach that balances it out and is fair for everyone.
  
  Anyway - i thought that for Gen X on there wasn't meant to be a pension - that is what we have all been exhorted to put away super for. Now all i hear is that those of us who do put it into super are rorting the system and cheating the poor.
  
  It seems we can't win!
  
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true blue ozzie:

19 Mar 2015 5:28:01pm

I fear for my future under Abbott's attack on pensioners, and the disabled. I have been inflicted with bad genes from my parents when it comes too bad spines. I have been unable to work since I was 48, yes my spine is on it's way out so to speak, I've had 2 opp's have got rods and screws holding my lower spine together. I have problems with the rest of my spine right to the base of my head, I'm always in pain or have head aces.

Due to the date of my birth I should be working until I'd be 70 ( good luck in that one Tony ) now here's the crunch, I only get $644 per fortnight, now 54 I have many years ahead to live but I know my $644 from Centerlink will not cover my living & medical expences. If my pension is cut or linked to a lower form of payment, at this rate I'll certainly be living on the streets homeless, starving with no means to get my medications or care for my self. Yes I am seriously afraid and scared for my future in the lucky country.

Abbott &Co please tell me & others like me what the hell are you going to do with people such as me.

PS. I'VE WORKED ALL MY LIFE PAID ALL MY TAXES until my spine couldn't take anymore.

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the egg:

19 Mar 2015 5:30:41pm

This is a very topical subject for me as my wife and I are in the middle of the retirement process and our financial adviser, at a meeting today told us some of the stories pertaining to some of his clients.
No names , of course but he told tales of clients with millions who are still trying to get the pension as they see it as a right having paid tax !! Or at least some as I'm sure they didn't get to garner millions by being totally honest in their affairs !!!
The truth is that there, in the real world are many many greedy people out there but the real truth is that the tax and pension system system is completely screwed and needs a total overhaul and some / many people will suffer losses of privilege and income that they really don't need but don't care to hear that bit of news.
It is impossible politically for the LNP to even consider this for any number of reason's even if their dogma didn't get in the way of honesty and I doubt even the Labor Party would look at it for many of the same reason's plus the usual rhetoric about jealousy of the rich etc etc losing them votes.
Only when we have Greek style collapse will someone appear who has the balls to lead the country back to some sanity but in the meantime I expect the current pantomime to continue.

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Verity:

19 Mar 2015 5:31:51pm

There goes the pensioners vote Mr. Morrison. The fact is that pensions are granted on income and assets and the Government already has that in hand.

If a person owns a home worth a million dollars that is exempt (as is everyones family home), however, what is inside the home, shares, money in the bank, cars, boats etc ARE counted.

Pensioners did not set the rules the Government did and fiddling with the pension sends a clear message to Morrison that the LNP will be gone in 2016.

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Patrick:

19 Mar 2015 5:35:45pm

Scott Morrison will probably love to bungle all pensioners in some orange boats and point them toward Indonesia then refuse to comment because its an 'on-water operational matter'.

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Stirrer:

19 Mar 2015 5:36:15pm

If we use the rapidly coming Third Industrial Revolution as Richard Fuller has suggested rather than leave it to a failed 'free market" ideology much of the caring, time and money now spent on the aging will be done by families freed from the necessity to work their asses off paying off predatory bankers.
The old will again be respected and valued members of society not the burden modern economics makes them out to be.

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awake:

19 Mar 2015 5:39:26pm

Absolutely agree. Too many in the trough and too many suffering. Time for change and honest appraisal.

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JamesH:

19 Mar 2015 5:44:02pm

Simple just double tax the rich and give to the poor Robin Hood.

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Moi:

19 Mar 2015 5:53:24pm

The baby boomers are starting to die off. So let the younger generations "roll over" inheritances into super, tax free, so that they won't need to go on the pension as they get older.

Give it some teeth by reintroducing inheritance taxes unless it is rolled over into super.

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- SueB:
  
  19 Mar 2015 8:11:20pm
  
  Original idea, Moi, that could certainly have some merit.
  
  Alert moderator
Nacnud:

19 Mar 2015 5:59:25pm

"...especially those created by excluding the family home from the assets test..."

The median house price in Sydney is about $600,000. At what price does the author suggest the asset test cut in? If he suggests $600,000 (which sounds not unreasonable), then half the householders in Sydney may not qualify for a pension merely because they have somewhere to live.

This is may or not be a "sensible" policy, but it would be political suicide for any government that tried it.

The fact is that an aging population will stabilise itself. The boomers will all pass on, and our demographics will revert to a more balanced state.

This article is the CIS trying to shape reality to match their ideology. As usual.

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don:

19 Mar 2015 6:18:59pm

The government provides retirement support for people the aged pension as well as superannuation tax concessions.

A person receiving the full aged pension, who lives to the average life expectancy will receive a total aged pension payout of $300,000 (i.e. $20,000 over 15 years). However, a person on a $250,000 annual salary during his/her working life (say 20 to 64) will receive $450,000 from the government (using their overall tax rate) and more than $650,000 (based their top marginal tax rate).

Just think about it.

Someone who receives no income during their working life receives $300,000 from the government for retirement support. Someone who receives $250,000 income per year during their working life receives 50% or 100% more, depending upon whether you use their overall tax rate or top marginal tax rate for the calculation.

Not only is this grossly unfair, it is crazy economics for the Government to pay high income earners much more via superannuation tax concessions than what it would cost to simply pay them a full pension.

I would recommend that the Government start to reform the retirement policy by allocating everyone a $300,000 lifetime retirement support benefit (based on a life expectancy of 80 years, although people liver shorter would receive less and people living longer would receive more). If they reach this lifetime allocation via superannuation tax concessions, further retirement benefits are then stopped. Conversely, if someone receives (say) $100,000 in superannuation tax concessions during their working lifetime, then their aged pension would be reduced by 1/3. (Note that aged pension income test and assets tests would become redundant).

After this reform, the Government could start a sensible and ethical debate whether better off people should be allocated the full $300,000 retirement benefit.

Further, if the Government provided the superannuation tax concessions via co-contributions (rather than reduced tax rates) and earlier in a person's working life, then they could reduce the lifetime retirement allocation from $300,000 with people still receiving a higher pension than under the existing superannuation/aged pension policy. Tis is the sort of smart policy that would deliver the same pensions for a lower Government outlay.

Now that would really be the start of SMART government!

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Dorro1950:

19 Mar 2015 6:32:48pm

I think the author has missed the point targeting "pensioners" with million dollar plus properties. That a pensioner has a very expensive property does not make them "rich". Remember we are talking about whether or not someone is eligible for a few hundreds of dollars each fortnight, with all the rules surrounding income, if someone is still eligible to receive this small amount, they are NOT rich.
Many pensioners are living in very expensive properties because that is where they bought many decades ago. Over that time, the value of the properties have increased dramatically, resulting in the current values. You just have to look at the average for Sydney, and you will see this sort of house value. It is NOT the pensioner's fault, they are just lucky!
So what is proposed is that pensioners who live in these million dollar properties must sell their homes and move - well, where? Now of course they have money in their pocket, so they not only have been forced to move, they now will also lose their pension until the spend all their cash!!!!
Just wrong!

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- Marcie:
  
  19 Mar 2015 11:09:35pm
  
  Strongly agree, Dorro
  
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- G.Andries:
  
  20 Mar 2015 11:06:36am
  
  Dorro: I strongly disagree with your reckoning. I moved from a 750,000 dollar property to a $350.000 one.
  
  I did not lose my pension. II have a more manageable place to live in, in my old age, and made new friends.
  
  If you live in a place worth more than a million dollars you are a burden on the tax system by getting the pension.
  
  'A change is only difficult in the beginning.'
  
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Martin:

19 Mar 2015 6:50:12pm

We must remember that being alive past pension age is a "LIFESTYLE CHOICE"
Why should the government fund lifestyle choices?
As well as cutting the pension I bet they even want to cut the electricity to our homes, close down the water supplies and sewage to all us useless old fogies

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cooky:

19 Mar 2015 7:23:39pm

link politicians pay as a percentage of the minimum annual wage/pension, cap their pay at this rate,give reasonable bonuses for ideas that improve living standards for everyone[watch minimum wages and pensions shoot up]
all aspiring politicians should have to read books like the ragged trousered philanthropist, to give the rascals some idea of the australian society they on the conservative side of politics are trying to create

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Simon S:

19 Mar 2015 7:47:37pm

I wonder where the recent 'Lets bash the pensioners' is coming from. Until very recently we had respect for our elderly, who worked hard to build this country to what its is today and paid taxes all their lives. It was generally accepted that such people should be awarded with life with some dignity in their old age.

Not any more. We have come to the 'Pensioner bashing' age where we have nothing but envy for the people who worked had all their lives to buy their family homes and save some money for their retirement. After their contribution for 40 plus years to our revenue base, now we not only deny them any support in their old age but want to take their family homes and any savings they have.

We now believe that only those who have nothing should have access to the age pension. Many people who have nothing are the sane people who never worked and never paid any tax not contributed to our tax revenue. They have spent their entire lives on welfare. Now we say they are the only ones entitled to full pension.

What sort of society have we become? What sort of incentive do we provide to our younger population? If you work hard and save - this society will attack everything you worked for. If you choose never to work, we will reward you with immediate access to maximum welfare benefits?!

I honestly cannot understand where the current 'Lets bash pensioners' come from.

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- crow:
  
  20 Mar 2015 2:29:49pm
  
  remember Thatcher and her 'there is no society, only individuals' line?
  
  thanks to neo-liberalisms victory, people are only worth what profit they can make for an economy. A pensioner with a $1m house getting the Age pension is an easy target
  
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- crow:
  
  20 Mar 2015 2:29:52pm
  
  remember Thatcher and her 'there is no society, only individuals' line?
  
  thanks to neo-liberalisms victory, people are only worth what profit they can make for an economy. A pensioner with a $1m house getting the Age pension is an easy target
  
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- Boris B:
  
  20 Mar 2015 6:16:01pm
  
  I think, 'Pensioner bashing' started by the Joe Hockey who started looking for some savings in the areas where any attempted savings can only cause far greater expenditure. Hockey's attack on pensioners shows his absolute lack of the 'cause and effect' relationship of people preparing for retirement.
  
  John Howard made some excessive supper concessions to the very rich, however he had the right idea in providing incentive for people to save for their retirement which would greatly reduce the pension outlays. Many who would have receive full pension are now on only small portion of the full pension. Yes we still have the same number of Age pensioners, however many more are now on part-pension only, thus reducing the overall budget outlays. Joe Hockey does not understand that. His attack on the people who save for their old age will result in fewer part pensioners however there will be far retirees be receiving full pension. Smaller number of pensioners with greater number with full pension, will create far greater budget outlays.
  
  I am afraid that Joe Hockey has irreversibly destroyed the myth that coalition better looks after pensioners. As a part pensioner, I cannot see how I can vote coalition again.
  
  Rudd government attacked the part pensioners by increasing the reduction in pension from 40c to 50c for every dollar (deemed to be) earned by pensioners . Hockey is now threatening all part pensioners.
  
  Hockey's ideas are supported by the socialist journalists in the Fairfax Press and the ABC .
  
  That is how we now have so many articles full of poorly informed, naive and nasty 'Pensioner bashing'.
  
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Boris B:

19 Mar 2015 8:04:51pm

Being no longer in the workforce thus without the usual social network and consequently with very little political or economic influence, the retired people only hope is to forge greater unity and forming a strong electoral lobby.

Our hard work and our age long contribution to this country is now being warded with attacks on everything we have including our family homes. We may no longer have communism as a political systems. however, based on this article and many comments, we still have many people with communist ideology, where those who do not want to work or save want to 'share' in everything someone worked and saved for.

Well, I would like to see a government or political party which will take my home or force me to sell it. I will join every association of retirees in existence and we will fight for our rights. Lets see how long any such party stays in government.

My message to all of you with communist ideology wold be; Try to work as hard as we have and sacrifice and save as we have, so that you have a family home and some savings rather than bludge or overspend all your lives and then try to appropriate someone else's family home. If I could, you can do it too.

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- saline:
  
  20 Mar 2015 2:14:36pm
  
  "... to all of you with communist ideology wold be; Try to work as hard as we have ..."
  
  Thanks for the message Boris B. I think I should let you know that communism has a job for everyone. It's and inclusive system. Everyone works and everyone gets a cut in the profit.
  
  You seem to find this capitalism more acceptable, where some people get a job and some don't. Some workers get big pay packets and some workers get little ones. There's lots of little ones.
  
  Some people don't have the right to a job and are despised, and they get whatever the government thinks is enough to keep them from dying of starvation on the local parliamentarian's front steps.
  
  Sorry you got that wrong, mate. But if you're a believer ...
  
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  - Boris B:
    
    20 Mar 2015 5:57:43pm
    
    @saline, there are very, very few people, mostly disabled, who genuinely need our help. The rest are either poor money managers, reckless spenders or some 'able bodies' who CHOOSE to be on the welfare all their lives. Yes, believe me there are a lot of those. I know quite few of them. Offcourse all of them have plenty of excuses. You mentioned few in your comments including: "...Some people don't have the right to a job and are despised, and they get whatever the government thinks is enough to keep them from dying of starvation on the local parliamentarian's front steps..." These are nothing but excuses for people not prepared for sacrifices required to get ahead in your life/"
    
    If anyone 'had a right to be poor' it is people like myself. I migrated to this country with equivalent to $12 dollars in my pocket, no friends or relatives and could not speak one single world of English. I worked any job available in cleaning, abattoirs, building sites etc. I never received unemployment benefits or Centrelink payments. Even on occasions when I would have qualified for some payment I did not know about them and never applied for any. Yes, it was not easy, however I was determined to set myself and my family for a comfortable life.
    
    In forty (plus) years, I managed to get myself a university degree, raise family and save money to buy myself a nice family home and save some money for retirement. Most people could achieve the same if they are willing to sacrifice that much for the success and live a disciplined life like I have. The excuses you provide why some people need welfare are nothing but excuses. Some would perhaps need assistance and guidance in managing their lives, however many find free welfare money far more desirable than hard work and disciplined savings.
    
    I think if we stop excusing people for being on welfare we would all be better off, including the people currently on welfare. That is the fact of life!!!
    
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bassmanbob:

19 Mar 2015 8:14:33pm

i am in my seventies and sterted work and paying tax in 1959. so anyone who went to school in the 60s, seventies eighties nineties noughties and 21 century. my taxes helped look after you.thats a long time to be looking after people.now the ungrateful right wing want to reduce my pension and reduce my standard of living.thanks for nothing.

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saline:

19 Mar 2015 8:52:16pm

Easy to get into a job, just go along to your local party rep or member of parliament. Help the party in the election campaign and you'll get work.

Of course it will be at the same rate as the guys on 457 visas. What do you expect?

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gbe:

19 Mar 2015 8:54:30pm

A single pensioner with a $40000 income would have to have a million dollars invested or still be working. They would not get enough pension to pay the council rates on the million dollar property.

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Geoff:

19 Mar 2015 9:02:23pm

Couldn't believe the generosity of the pension thing. I could have a $10 000 000 home and $700 000 in the bank & my wife and I could get a pension WE DID NOT NEED! The money wasn't important but a one cent pension opens the floodgates to the LURKS!! On top of that we can earn $70 000 pa. and PAY NO, yes NO TAX!!
Notionally valuing the family home and making it part of the qualifying asset thresh-hold would get rid of the wealthy freeloaders. The money saved could then be redirected to help the genuinely needy and poor.

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- saline:
  
  20 Mar 2015 2:17:59pm
  
  Oooo... don't know about your figures here.
  
  I must get a better financial adviser.
  
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Tony T:

19 Mar 2015 9:43:06pm

If the Government wants to move people off the pension, then i suggest they start with the biggest rort in Australian history.....A friend of mine married a guy that use to play the guiter in the army band. When he died she got the army widows pension, even though this guy never served in a war let alone ever leave Australia. His few years in the army were spent playing the guiter in the army band. She has now been on the War Widows pension for 27 years and has never worked one single day in her entire life. Each year she travels on overseas holidays, drives a brand new car, and spends her time going shopping, nite clubs, etc. She has never worked a day in her life and she has cost the Australian taxpayers millions. How is this fair? How can this be explained to hard working Australians who have worked hard and paid taxes all their life? This pension rort should be the very first place the Government starts in cleaning up our welfare system.

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mick:

20 Mar 2015 5:21:55am

those with greater means off the payment altogether - that's where the real savings are, i totally agree.
remember the well off can hid there money is they have a fancy accountant or the like

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mick:

20 Mar 2015 5:43:40am

do we find it strange the lnp abuts hockny cant find the money for hospitals and train drs nurses and pensions
but they find the dollars for the invasion of over peoples countries
so how much has it cost just for the veitnam war and ongoing cost for that invasion
at least the real labor party and the average joe spoke out and walked the streets to get it stopped

but now the so called labor party is now were to be seen

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Eliza68:

20 Mar 2015 8:38:34am

There is the conundrum, people who reside in multi-million dollar suburbs and have not lived anywhere else for twenty to fifty years cannot begin to think of living anywhere else, however they are indeed sitting on a nest egg and I wonder if the people who are screaming the loudest at including the family home in the assets test for the pension are the beneficiaries of the estate when mum and dad are deceased. If they sold their home and moved into a smaller, more manageable unit then they would have much more to live off and a better financial future than living on a meagre pension. Economics 101. But their children would argue against this to protect their own financial future.

I was told not to work 9years ago due to complications arising from a motor vehicle accident and have been living as a one income household since. We have had to choose suburbs which we can afford, rather than lifestyle choice. My husband now has to retire due to same reasons, at 53, and we are selling our home and moving interstate to a small rural area where we can own our home outright. A big adjustment for our seven year old, but it is what we have to do. Why are people so afraid of doing this? Because they want modern convenience, million dollar views, transport at their front door and shopping malls. Well change your views, sell your home and live in comfort.

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PPSCROSBY:

20 Mar 2015 10:45:58am

The line between getting the pension or not may be drawn thus:

a) Those who own a house worth more than one million by today's values and

b) who have superannuation bringing in more than $30,000 per annum, are not to recieve the pension.

Give them a Medicare card and PBS, by all means, but insist that they take out private health insurance and use it when needed,
rather than taking up beds in hospitals for free.

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Andrew:

20 Mar 2015 11:31:32am

"If Scott Morrison is willing to grasp the nettle of pension reform, he would be better off looking at ways to move those with greater means off the payment altogether - that's where the real savings are,.."

Its also where the Coalition votes are as well, so no, its unlikely that Scott Morrison will grasp the nettle.

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Oaktree:

20 Mar 2015 11:46:08am

Reaching retirement age and losing that weekly or fortnightly pay-packet is extremely daunting. This is particularly so if one suffers from ill-health. Little wonder that people seek the security of an Age Pension or part pension with The Card. For most people, retirement means a smaller income and the uncertainty of how the household budget will fare.

Because every circumstance is different, the value of the family home and the rates payable are a consideration when trying to set any limits. Therefore, I don't think that an equitable amount can be reasonably reached.

I think we need to look to successful schemes in Europe. A basic pension for all, and add-ons where circumstances require more. This is fair to long-term taxpayers and encourages younger people to save for their future retirement. It prevents people from over-investing in housing as this issue does not figure in pension calculations, and allows long-term residents to stay in their house even if it has gone up in value.

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- saline:
  
  20 Mar 2015 3:37:57pm
  
  No way on the property assets over $1million, Oaktree.
  
  I want the deeming rate of income on the property assets above $1M recorded as income.
  
  I could put up with everyone getting a basic pension, and (a big and) paying full income tax with no deductions for above after that according to the standard income tax part A scale.
  
  I would also accept a payment from a managed super fund of up to $30,000, not taxed, and a "benefits card".
  
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Jane2:

20 Mar 2015 12:49:50pm

With regards to indexing, the trouble is the old age pension is indexed to the MTAWE but all the other pensions are indexed to the CPI. This has meant an ever increasing gap between the old age pension and all the others.

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- saline:
  
  20 Mar 2015 2:38:47pm
  
  All other pensions need to indexed the same way as the current Aged Pension.
  
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TommyG:

20 Mar 2015 1:04:33pm

Recently there was an email circulating that showed the cost of Federal MP's present and even worse past that cost the Australian budget millions. All the past PM's and other hangers on that receive huge pensions and other perks but are wealthy and able to earn big money in their own right. Why don't we start there and drop a lot of these unjust expenses.
The email I mention had a staggering bottom line of costs.
Similar stories were in newspapers

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Thelma:

20 Mar 2015 2:06:45pm

I am afraid you have the entire argument on the wrong premises. Why concentrate on the part-pensioners with family home and some savings. After all they are getting only a small portion of the full pension it would take 4-10 part pensioners to receive as much as one full pensioner.

We should concentrate on the ones who receive full pension and investigate how and why are these people on full pension. Were they disabled and unable to save some money for their retirement. If not and if the reason is their reluctance to work or due to their reckless spending, such people should not be rewarded with my hard earned taxes to continue their care free lives on welfare. We should do something to prevent these people to base their life on the support from the hard working Australians.

We should aim to make all retired people part-pensioners and no full pensioners. That is how to fix the budget and that is how to provide incentive for everyone to look after themselves, rather than relaying on the support by others.

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- Roy T:
  
  20 Mar 2015 4:44:54pm
  
  You are right Thelma. It is all about providing the incentive for people. You attack the ones who work hard all their lives, pay tax and save some money for their old age and there would be ever more people who realise that if you spend everything you earn now you will be rewarded with indexed full pension.
  
  I have further 37 years to my retirement and I am closely following the current debate. I have my own home and some savings. However if I am going to be punished for living responsibly and savings, I will make sure that I have no savings by the time I retire. There are many parts of the world I have not seen. I will make sure that I spend my hard earned cash rather than be penalized by having my pension reduced.
  
  If they continue like that, I would bet my bottom dollar that in ten years we will have many more full pensioners than today. We may have fewer part-pensioners, however the overall outlay will be much greater. This is the incentive that such policies will make.
  
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Thelma:

20 Mar 2015 2:06:47pm

I am afraid you have the entire argument on the wrong premises. Why concentrate on the part-pensioners with family home and some savings. After all they are getting only a small portion of the full pension it would take 4-10 part pensioners to receive as much as one full pensioner.

We should concentrate on the ones who receive full pension and investigate how and why are these people on full pension. Were they disabled and unable to save some money for their retirement. If not and if the reason is their reluctance to work or due to their reckless spending, such people should not be rewarded with my hard earned taxes to continue their care free lives on welfare. We should do something to prevent these people to base their life on the support from the hard working Australians.

We should aim to make all retired people part-pensioners and no full pensioners. That is how to fix the budget and that is how to provide incentive for everyone to look after themselves, rather than relaying on the support by others.

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- saline:
  
  20 Mar 2015 3:52:42pm
  
  Every requires a baisic sum to live on, the pension. Others receive less according to their super payment.
  
  Those taking a lump sum of super could penalised for that amount by reducing their pension somewhat.
  
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  - Roy T:
    
    20 Mar 2015 4:36:10pm
    
    If the supper is meant as income in retirement - Lump Sums should never be allowed. People go on overseas holidays. spend money and then demand full pensions. It is contrary to the very purpose of super.
    
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- dan the man:
  
  20 Mar 2015 7:07:23pm
  
  Thelma: did you know? a levy was imposed on all taxpayers and this money went to paying pensions, to my knowledge the legislation has not been repealed to this day. The legislation for this was apparently done in the 1909 or 1920, not long after the temporary income tax was made permanently, that 8% of income tax was to be set aside for the age pensions.
  The system work well until the Fraser government cancelled the account and put all monies in consolidated revenue, they forgot to reduce the levy(tax) amount from all taxpayers, people have forgot or don't even know this levy existed.
  Old age and invalid pension were introduced in July 1909 by the labour party.
  So I think whatever will be the circumstances in your life until retirement you're entitled to it because you pay for it.
  Do you know for which reason people who pay taxes all their are on full pension? no you don't! I think you're a bit harsh.
  It's true some people after school went on the doll all their life and get full pension in retirement age, it's unfair, but what can you do. Stop to give them the pension, then what will happen?
  
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Alan K:

20 Mar 2015 2:55:08pm

If they want to make a big reduction in pensions, why not start with the massive over inflated pensions ex politicians get! They are no different to anyone else, so why should they get the parliamentary pensions for life they get, as well as their fat super payments and free travel etc.? Then there is the free flights and all the other tax payer funded benefits and perks they keep getting until they die. How many million dollars would that put back into the system if it was not being paid to these former politicians. Then you get others who are collecting their pension and get extra for being an ambassador or high commissioner etc. and receiving a healthy fee as well for that and living in a fully funded mansion and have servants and cars at their disposal, all at our expense, is this not double dipping? Most of the politicians are very well off, and would not know what it is like to live week to week and hope the accounts will balance so you can survive. Most people just plain do not get to have the luxuries these politicians take for the normal and for granted. When they tighten their expense claims and stop milking the system, then Joe Hockey and his cronies can say the age of entitlement is over! But alas Joe, will not look at their entitlements and say we need to cut them back drastically, no, he would say they are not enough, we had better increase them more.

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saline:

20 Mar 2015 3:01:09pm

I have two concerns about the retirement age being extended past 65.

The funeral notices in the newspaper classified ads are for persons between 60 and 70 years of age.

Youth who can't get their foot in the door for a job.

Surely, an employee nearing their 'useby', would get some pleasure showing a younger person the ropes.

Can't this narrow minded government find a positive approach, where both the youth and the aged win.

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Me of wherever:

20 Mar 2015 3:01:54pm

While they are desperately picking on pensioners why dont they just give all pensioners over 65 the green dream , some would welcome the move and so would some of pensioners family.

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jack44:

20 Mar 2015 3:07:06pm

My problem is that I am a aged but still have a memory.

When I first started work, the system used was one of voluntary contribution to a retirement pension. This I did from my first pay packet.

During the course of subsequent reforms, the Government of the day seized those contributions on the basis that they would introduce a universal pension system, but at the same time guaranteed that there would never be means testing applied to the pension. That system prevailed for quite a while. To be fair, the pension system proposed was consistent with the amounts of insurance which we paid for.

So I now think its pretty amusing reading these diatribes about rich people of my age raping the pension system. For a very long period of Australian history, we were all assured that our tax contribution proportions for pensions would be returned to us as pensions without fear nor favour. And I might add that this system was approved and guaranteed by both sides of politics. I hasten to add that I am certainly not regarded as "rich".

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saline:

20 Mar 2015 3:12:01pm

While I'm chewing this bone.

I'll wager this government and the government before them, studied the available statistics and found that where heaps of people once died between 60 and 67 years, they had started living towards 72 years. Like my brother.

Aha! Costing the government another 5 years of the pension! Can't have them living so long on the pension! Need to pay the CPI adjustment to the retired pollies!

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Tator:

20 Mar 2015 4:06:55pm

There is an entire financial advice industry out there telling people how to structure their retirement income as to best obtain a part pension.
The big advantage of getting a part pension, even if it is only $1 a fortnight, is the goody bag of concessions you get with PBS and Health Care card along with public transport and utility/rates concessions which can be worth thousands a year depending on the utilisation.
What needs to be done is to encourage these same people to go out and maximise their retirement incomes and not penalise them for it through the taxation system. we should be aiming for people to be self sufficient in retirement and the pension to be purely a safety net for those unfortunate enough not to have been able to work towards this.
Most of any pension changes will not affect me as I have been contributing towards my retirement since 1989, before compulsory super and am lucky enough to be on a defined benefit scheme which barring divorce, should keep my family well into retirement without having to worry about minimising anything to get a part pension.

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