Page 2985 - Week 10 - Wednesday, 14 August 2013
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In Canberra it is estimated we have nearly 20,000 self-funded retirees, most of whom are ineligible for concessions for their rates, utilities and healthcare costs. That means if you have been prudent in your earlier years, planned for your retirement and made sensible and responsible choices throughout your life, this city is absolutely not friendly to you—or at least this government and its current federal counterpart are not friendly to you. Indeed, in the Labor Party lexicon, it seems the term “self-funded retirees” is synonymous with a group of persons held in low regard. To many in the Labor Party, self-funded retirees are seen as the rich, the retired idle rich, who use elaborate mechanisms to reduce tax and try to make themselves eligible for undeserved benefits and concessions.
In truth, the typical self-funded retiree in Canberra, according to National Seniors Australia research, has an income between the $44,100 cut-off for part-payment of the single age pension and the $50,000 upper threshold for the commonwealth seniors health card. It suggests they continue to bear the brunt of cost of living increases with little ability to generate extra income. While they pay full price for their utilities and other living expenses, their income is frequently reduced to less than the cut-off for eligibility for a part-age pension payment.
Certainly at the federal level—and it sets the tone for subsequent state and territory approaches, as I have just indicated—independent retirees are seen as a ripe source for mining additional revenue. Just look at superannuation changes. The federal Labor-Greens government promised to make no changes to superannuation, but we know what happened there—they broke that promise.
If we look at how Labor treats superannuation, we will see the duplicity of their policy approach. On the one hand they champion themselves as the party that delivered compulsory superannuation and, indeed, they did deliver that. But having done that, they now regard it as their own tax plaything. Over the past five years Labor has cut concessional contribution caps from $50,000 and $100,000 down to $25,000, freezing indexation as well. Labor also cut super co-contribution benefits for low income earners from $1,500 to $500. That is despite pre-election promises of no change. For the past three years federal Labor have been promising to re-increase concessional contribution caps to $50,000, but they have continuously deferred implementation. They have now broken that promise too by proposing an increase to just $35,000 instead.
Labor’s cuts to concessional caps and to super co-contribution benefits have reduced the incentive for people to save through super. At the federal level, and so it goes through to the territory level, Labor cannot be trusted on super because, over the past five years, they increased taxes on super by more than $8 billion, predominantly targeting low and middle income earners, despite, again, a pre-election promise of no change to super. Those changes included a $3.3 billion Labor cut to super co-contribution benefits for low income earners, reducing the co-contribution benefit from $1,500 down to $500. So, after promising never to tax super payments for the over 60s, Labor is now proposing to tax super payments for the over 60s, albeit through the back door. After promising to re-increase concessional caps to $50,000 they are now increasing them to just $35,000.
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