By Peter Lewis and Jackie Woods
Updated Thu 24 Apr 2014
Photo: We are living longer - which is a good thing. But that is putting pressure on pensions as well as health care - which is a bad thing. (AAP)
With big spending planned on fighter jets and a generous new paid parental leave scheme, changes to the pension could turn voters off, write Peter Lewis and Jackie Woods.
Tony Abbott is a very black and white sort of leader. He stops the boats. He ends the waste. He cuts the taxes.
But outside the election cycle, our Prime Minister is discovering government is less black and white and more grey, not least when it comes to the budgetary challenge of managing our ageing population.
As three-word slogans go, Stop the Pensions doesn't really cut it.
As the Government prepares for its tough love "age of entitlement"-ending budget, Treasurer Joe Hockey has put the sustainability of the aged pension front and centre of public debate. But while the demographic forecasts might be straightforward, paying for our ageing population comes with a whole set of complicated policy challenges.
We are living longer - which is a good thing. But that is putting pressure on pensions as well as health care - which is a bad thing if you are fighting a war on debt.
Many are working in jobs that could see us remain in the workforce longer. Others work in manual jobs where their bodies have had enough by their mid-60s.
Compulsory superannuation means that many people have at least some money set aside for retirement. But the nature of income-based contributions plus tax concessions brought in during the Howard era means super schemes disproportionately benefit high earners.
For generations, Australians have invested their financial security in the family home; and booming capital city property prices mean many people have considerable assets on retirement. Yet the Government doesn't look at that wealth when calculating an individual's eligibility for a pension.
And to muddy the waters further, older Australians disproportionately vote for the Coalition and are easily upset.
With these grey areas in mind, this week's Essential Report suggests Hockey's attempt to transfer his war on the age of entitlement to the aged pension arena is looking decidedly brave.
Australians reject the proposition that people should wait until 70 before being entitled to retire on an age pension.
The opposition crosses party lines and age demographics, as does resistance to stricter asset tests to include the value of the family home.
In the public mind, aged pensioners are considered the most worthy in the hierarchy of welfare recipients.
Australians hold a firm view that after a lifetime of work and paying tax, it's only fair that seniors get some public support. Plus, we'll all be old one day (if we're lucky) - negotiating the financial challenges of old age isn't just something that happens to other people.
And while the demographic challenges might be irrefutable, there are still choices about where and how to find the money to fund our ageing population - and whose retirements public money should be directed towards.
After all, the Abbott Government has delayed Labor's planned increase in compulsory superannuation by two years, taking billions out of the national savings pool.
And while preparing to tighten the screws on pensions it has scrapped a tax on superannuation for the 16,000 highest income earners announced by Labor.
As the Australia Institute points out in its report this week on superannuation the skyrocketing costs of superannuation tax concessions are leaving the increasing cost of pensions for dead, with most of the benefits going to the top income brackets.
Hockey inadvertently touched on the ineffectiveness of superannuation tax concessions in reducing reliance on the pension in a keynote speech this week, saying that despite spending billions on tax concessions the number of Australians receiving a full or part pension in 2050 will still be about four out of five.
Heading towards the budget, the Government is ramping up its entitlement-busting talk.
But while the public may be convinced there are some unworthy recipients of taxpayers' support, aged pensioners aren't among them.
And with big spending planned on fighter jets and a generous new paid parental leave scheme, cuts to the pension could leave voters decidedly grey around the gills.
The survey was conducted online from April 18-21, 2014 and is based on 1004 respondents.
Peter Lewis is a director of Essential Media Communications. View his full profile here. Jackie Woods is a communications consultant at Essential Media Communications. View her full profile here.
Pension plans won't win many fans - The Drum (Australian Broadcasting Corporation)
