Should Over-65’s Pay More Tax?
Perhaps we’ve been saying it too loud and for too long that over 50s are the healthiest and wealthiest their generation has ever been. In aggregate the statistics plainly show in terms of longevity and asset appreciation this age cohort have generally had it pretty sweet compared to their forebears.
BUT individually of course circumstances vary widely and frankly some older sick and broke Australians must grimace when they’re told they’ve never had it so good.
But policy and perceptions are grounded in such generalisations and we’re seeing what might be the start of an unparalleled pushback against concessions to this group. In short the narrative may well be it’s time for older
Australians to start giving back. It might begin with some little known and lower value tax breaks for the over-65s but it could well end with the family home being included in the pension assets test. The sacred family home change might be politically difficult but it’s also very tempting with the
Productivity Commission saying it would be worth $6 billion a year to the budget. This week The Grattan Institute, which earlier this year pushed for dramatic changes to superannuation, claimed older Australians paid $1 billion less tax a year than their younger counterparts.
Their report said overly generous tax breaks with no sensible policy basis, which apply only to over 65s, mean 500,000 Australians get an unfair advantage.
Perhaps few of these half million beneficiaries appreciate how the Senior’s and Pensioners Tax Offset (SAPTO), a higher Medicare levy income threshold, and higher private health insurance rebates benefit them at all.
But they will undoubtedly do so if one day someone comes to take it away as seems more likely with many of the ‘benefits’ this group is said to enjoy. The proponents of removing these inconsistencies in the tax system, as they like to frame them, claim it’s really no big thing.
But a few beg to differ. About the only official voice which has questioned the wisdom of the Grattan plan came with warnings it could cause a voter backlash.
The Council Of The Ageing chief executive Ian Yates warns that the group who would be affected were not living in luxury and losing perhaps $2000 a year would have a significant impact on their lives and budgets.
It’s a start of an argument but The Grattan Institute have been far more adept at getting their message out that’s it’s time to end the lurks and perks
enjoyed by older Australians.
In the past FiftyUp members have indicated in surveys they are willing to help out when it comes to fixing the Budget or addressing housing affordability issues
Again in terms of equity and public policy there may be good reasons to dial back the benefits enjoyed just by one group but it shouldn’t happen without a
reasonable debate from all sides and that’s fair.
