It's time for a Boomer political party. Not to look back in wistful nostalgia to days of flaired pants and campus sit-ins, but a new party that fights for intergenerational equity.
The Abbott Government has lapped up reports by the Grattan Institute and the Productivity Commission, recommending a rise in the pension eligibility age to 70. The Commission of Audit will follow suit, if it knows what's good for it. This comes on the heels of the Gillard legislation of moving the aged pension eligibility from 65 to 67 years of age.
The Grattan Institute – which has taken to humping the Abbott Government's leg - also wants to pair the superannuation draw down age to 70, while hunting down outstanding HECS fees from dead students.
The Abbott Government is shredding the Social Contract – a tacit agreement in advanced capitalist societies, which says that the Government will look after its ageing citizens. Maybe we're more like Fiji after all.
The Abbott Government's scare campaign is a shocker. I worked (for my sins) in DEEWR in Canberra in this area. There was never, ever any figures produced to support any of the Treasurer's outrageous predictions of doom and gloom.
Treasurer Hockey has created a crisis to slash the welfare state and usher in an era of austerity in Australia. Our nation has one of the lowest government debt levels of any advanced capitalist nation in the world (see graph below).
The Abbott government plans to take $300 billion (measured in future dollars) out of Commonwealth spending over the next ten years to achieve a target surplus of 1 per cent of GDP in 2023-24. This is extraordinary and unprecedented.
Those in greatest need of the aged pension remaining at 67 such as small business owners, manual labourers and women, will be hardest hit.
The number of Australians aged 65 to 84, will double between 2010 and 2050 and outlays may rise from $64 billion in today's terms to $116 billion in 2023-24. But this will be offset by the 67.5 per cent of Boomers who have full healthcare. Treasurer Hockey didn't tell you that.
The aged pension, disability support pension and carers' payment will add another $39 billion to annual payments by 2023-24, but this will be partly offset by those who have healthy superannuation balances ($400,000) – about 20 per cent of the post war generation.
We know, but cannot calculate exactly as yet, that many educated and skilled workers will work on past 65. Not because they have to but because they want to. That will knock down the aged pension bill considerably.
Our GDP will rise to about US $2.6 trillion at market exchange rates by 2030 and the economy will certainly slow but not because of the ageing Boomers. It's because productivity levels are heading south and the Commonwealth will have to carry two failing states: South Australia and Tasmania.
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