Kevin Andrews has announced an inquiry into the social welfare system, but has immediately ruled out considering the aged pension. This will be a waste of time and an unmitigated disaster.
Total welfare spending in the last budget was predicted to be $138 billion, of which only $9.55B goes to the unemployed, while $25.5B goes to people with disabilities. The lion’s share is the $54.8B, or 39.7% of the social security budget, which goes to the pension.
If you are going to make a significant dint in social security outlays you are not going to get there attacking the Newstart recipients. Indeed, the best way to get Newstart payments down would be to get employment up, which is not in his portfolio.
How do you take money away from people with disabilities when you’ve already promised to increase assistance to disabilities through the NDIS (or whatever it is now being called)? How many promises are you going to keep in the letter and break in the spirit?
No, the only area where there is likely to be much to be saved is in the aged pension.
And this can be done reasonably simply and equitably over the next few years.
The fact is that we have a pension system which was designed for an early C20 demographic who died not long after they retired.
Not only are we living longer lives, but we are healthier and fitter much longer. There is no justification for making a pension available to someone who isn’t disabled much before 75 years of age these days.
The other issue we should look at is the tax advantages that older Australians get, including the benefit to partly pay themselves from a tax advantaged superannuation stream once they are older than 55.
Writing as a 55 year old, that is not a time when you ought to be accessing any part of your retirement savings, let alone being encouraged to do so by a generous tax treatment of your resulting income stream.
The idea that we will all be able to sit around, doing our round Australia trips and occasional overseas tours, leveraging against the kids inheritance and taking a taxpayer funded pension, augmented by our seniors’ card for the last 20 to 30 years of our life while generations X, Y and Z, and AA, AB and AC pay the bills is a pipe dream.
The kids won’t stand for it, and neither will our financiers.
But it’s unlikely that any of the current crop of politicians, on either side, has the skill, fortitude or foresight to deal with it.
Which is bad luck for my kids, and bad luck for me, because in 20 years time, when I might need some assistance, the baby boomers in front of me may well be pulling up the ladders, leaving the rest of us to drown, and I’ll be at a stage in my life when keeping afloat will be hard.