Thursday, 5 June 2014

Pensions for all cheaper than Superannuation?

In Boost pensions to save on aged costs – no, seriously Michael Pascoe looks at the idea of boosting pensions to save on the cost of aged care.
Amidst all the talk of a budget crisis and the need to raise the pension age and cut welfare costs, it seems an utterly outrageous suggestion that we should instead give the pension to everyone and substantially increase it as well.

It sounds like the raving of some loony socialist determined to bankrupt the nation, but it actually makes hard, conservative economic sense and would save the budget billions. It’s just too bad that the federal government won’t have a bar of it – because the federal government is not the stuff of hard, conservative economics whatever their PR spinners might have you think.

The sting in the tail of the suggestion is that increasing the pension and removing any means test from it would come at the cost of scrapping the many tax breaks given to our superannuation system. It’s a brave, brave soul who would be game to take on the vested interests of a $1.5 trillion industry merely in the name of equity and protecting our longer-term budget outlook. And there really aren’t brave, brave souls in either side of parliament.

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