Parliament would retain the power to determine who is eligible for the Age Pension. It would also have the power to sack the Tribunal at the end of its term, while the enabling legislation can require the Tribunal to hold formal meetings with the Treasury, Reserve Bank, Treasurer and Shadow Treasurer prior to making its determination every year.
Crucially, the Tribunal would be required to carefully relate its determination on the impact that it will have on superannuation, other savings and mature age employment and comment on this in their report. Above all, it must strive to create a situation where pensioners are not penalised for having saved diligently during their working years, as disgracefully occurs now.
All of this will mean that the Pension will cease to be a political football that demeans and humiliates Pensioners and drives a rift between the generations.
It will mean also that the Government of the day can’t be attacked by the Opposition for being mean or generous to Pensioners. The Tribunal takes the blame.
More importantly, the sum that it determines can provide a benchmark against which other pension payments and welfare transfers are calculated.
Some misinformed critics will say that the cost of the Age Pension is so great that no government could possibly agree to losing control of it. But, the fact is that the Pension has been an indispensable part of national life for a century and will be for the next thousand years. It must be accepted as an unavoidable cost just like the repayment of loans and interest. We must stop agonising about it year by year and allow the Tribunal to announce the figure six months before Budget Day.
A vital reason why the Pension must come out of politics is that there is no such thing as an average pensioner. Some are frugal, some not, while some are good money managers and others are not. Some enjoy good health, but many don’t. Far too many don’t own their own homes and many don’t live near essential services. Economic indices can’t cover any of those issues, nor will political ideologies.
The Age Pension is quite clearly long overdue for change and the challenge is not an insurmountable problem. It can be financed easily if all evaders pay their taxes and negative gearing is abolished as being ludicrous middle class welfare.
Australia is one of the most prosperous nations on earth with a hard working, intelligent work force who do not deserve to be demeaned in their twilight years. They most certainly should not have such a low pension that they have to choose between food and medicine which so many do today.
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