The aged pension is an entitlement and Centrelink should not be treating it as welfare. All Australians should be entitled to it as a reward for a lifetime of contribution to Australia.
While it is true that some contribute more than others, we live in one of the most democratic countries in the world, and all Australians should be treated equally, regardless of social status.
Under the current laws, if an aged pensioner does any work, their pension is slashed drastically, or cancelled all together. This is not much of a reward for a lifetime of paying taxes and helping to build Australia to become a better country.
Similarly, if an aged pensioner has accumulated what Centrelink deem to be too much wealth, their pension is decreased or cancelled.
Centrelink consider too much wealth to be $419,000 for a couple that own their own house, and $643,500 for a couple that don’t own their own house – hardly a fortune in a world where a house can cost over a million dollars.
It gets better. If your partner is not at retirement age, they are expected to support you on a single income until they, too, reach retirement age.
In a world where financial independence is expected by society and the government, the government are creating situations where the elderly don’t have financial independence.
It wasn’t always like this.
The aged pension was introduced in 1909 as an entitlement for anybody that had reached the age of 65, with Australia being one of the first countries in the world to do this. The pension was also introduced for the invalid, who were unable to work.
In 1943, the Curtin government set up the National Welfare Fund, to ensure that there would always be money to pay the aged and invalid pension, as well as a support mechanism for the unemployed. It allowed that 7.5% of taxes collected would be paid into this fund. It was type of insurance policy for the old and infirm.
Over the years, the fund accumulated far more than what was needed to pay for pensions and welfare, so the Hawke government transferred the entire amount into general revenue in 1985. Not just the surplus, but the entire amount.
This meant that all the money saved for pensions and welfare was now gone. To make up for the loss, the Hawke government introduced compulsory superannuation, putting the onus on employers to make up for the shortfall the government had taken.
However, there was still an expectation that the pension would be available for retirees who did not have enough superannuation, which as it eventuated, is the majority of people.
The Morrison government put an end to that by declaring that the aged pension had always been welfare, effectively rewriting the history of the pension, and redefining the original purpose of the National Welfare Fund.
The solution is not simple. Successive governments since Hawke have failed to plan for the future of retirees, while ensuring that the government and their parliamentary colleagues were well looked after.
All federal MPs elected up until 2004 were guaranteed a full pension for life, regardless of whether they moved into high paying jobs after parliament. Their pension is not means tested the same as the aged pension currently is. Many are still collecting this while working in jobs that pay hundreds of thousands of dollars.
Most MPs elected after 2004 are eligible for a similar scheme – it just has a different name.
The solution would appear to be to transfer the money taken by Hawke in 1985, adjusted for inflation and cost of living expenses, from general revenue back into a National Welfare Fund, and recommence putting a portion of taxes collected into the fund.
As stated earlier, it is not quite that simple, as the last nine years of LNP government have put Australia into almost a trillion dollars of debt. Finding the money in general revenue could be tricky.
There are a couple of possible solutions, the first being to cancel the stage 3 tax cuts. The most obvious is to start taxing large corporations and the super rich, who pay virtually no tax.
Aged pensioners deserve a better deal than what they are copping at the moment. The pension should be a reward for a life time of service, not a battle against the government and Centrelink.
Anthony Albanese needs to start earning his half million dollar salary, and find a way to look after our pensioners, making sure they get the pension to which they are entitled. I think all Australians would agree, as we are all planning on a comfortable retirement.
Originally published on craighill.net by Craig Hill, Craig Hill Consultancy Services
