Pensions and superannuation: the need for change
The Abbott Government, as part of its ‘budget repair’ efforts, wanted in the 2014 Budget to increase the pension age to 70 and to restrict pension indexation to the price index, meaning that the pension will fall relative to general community standards. It has now walked away from CPI indexation in the face of overwhelming community opposition, but is still looking for pension savings.
However it has refused to find savings in superannuation tax concessions, which cost the budget almost as much as the age pension and are growing so rapidly – 11% a year – that on Treasury projections they will overtake the pension spend by 2017. The Government sought to cut back the slower growing and more equitable part of retirement income assistance, which does the most to alleviate poverty, while leaving alone the faster growing and more regressive concessions. Over fifty percent of the total benefit of tax concessions flows to the top 20% of income earners.