We want clarity and security around Retirement incomes, not backroom deals

Political manoeuvring this week saw the Greens back the government’s changes to the pension assets test, saving the budget a handy $2.4 billion but injecting even more uncertainty into superannuation.

Ballooning costs are good reasons to amend retirement incomes policy, as our members acknowledge, but not everyone should be happy with them being subject to 11th hour back-room political fixes to sidestep Labor’s opposition to the changes.

After months of promises that super policy would be left alone, the Greens have put super under the spotlight of the forthcoming tax review in ways which will naturally unsettle many of those counting on some greater certainty around their nest egg and protection from government raids.

The PM and Shorten have taunted each other by claiming, in the one simple take-out from events, that Labor is going after super and the government is targeting pensions.

In our last survey before the Budget, two-thirds said it was time to review tax concessions on super for those with large super balances.

But a larger majority (72%) of the 13,000 respondents supported the idea floated by former premier Jeff Kennett and others for a permanent, bipartisan body to make long–term retirement policy decisions.^[1]

And dozens of comments echoed the fiery sentiment that we couldn’t trust the political process to provide stable policy on retirement incomes and it’s time it was outsourced to an independent Reserve Bank-style statutory body.

The conflicting commentary on the radio today and the concerned and confused questions from callers suggests ongoing problems around the tightened assets test, which doesn’t actually apply until Jan 2017.

Some will point out it’s only returning the status quo on eligibility to where it was before the then-PM John Howard made generous concessions before an election in 2007. And even if you are less eligible for the pension you’ll still get the seniors health card and its discounts.

The raw figures show while 170,000 less well-off retirees will then get an extra $30 a fortnight, amongst the better-off some 90,000 will lose the part-pension altogether and a quarter of a million will have it reduced.

But better-off on paper isn’t “rolling in it” in reality. This was the argument which Labor seemed to be advancing, until they were trumped politically by the Greens.

So far we haven’t heard much of the plight of these so-called ‘losers’ from the bargain with the government and the Greens, but there may be more to come.

The Australian Seniors group have highlighted the problem for single pensioners with not always  flash levels of  assets. Their part pensions would erode with $500,000 of assets, besides the family home, leaving them worse off than if they relied entirely on a pension. But the government says they should be drawing down on their assets, not planning to pass them on.

For couples who hold assets on top of the home, the new level will be $823,000.

Whichever way you cut the numbers, or perceive the fairness or otherwise of the eligibility changes, it’s more likely that ever that polarised policies will propel pensions and super to the fore of the next election.

And that’s why we’ve renewed our call today in support of the Jeff Kennett idea. Let us know what you think in the forum below.