The Ageing Population - Blame
There are three frequent complaints about the age pension and future ‘affordability’.
We will not try and provide a full economic analysis of the issues, but simply repeat some assertions and then summarise an alternate view.
- “The younger generation will be subsidising the welfare of baby boomer's pensions. These baby boomers have not been putting aside enough for their pension!”
One alternate view is:
“The alternate view is that the Government continues to collect a ‘pension’ tax from all tax payers. In 1985 the Government ‘cancelled the welfare tax’ and transferred the balance of the fund to Consolidated Revenue; yet it continues to collect the tax. The baby boomers still contributed to that fund. Some analysis has shown that the ‘credits’ in this fund would be the equivalent to a pension of $500 per week for all pensioners”.
- “The ageing population will mean fewer will be paying for more. Government studies have shown that the proportion of the population over 15, compared to those over 65 will fall from approx. 5 to 2.5!”
An alternate view is:
“While this may be true, it is not true when compared to the proportion of taxpayers! The proportion of young paying tax, partners working and paying tax, pensioners working etc. are also increasing; with the result that revenues are not forecast to change significantly proportionally.”
- “It is only the poor who receive a Government pension!”
An alternate view is:
“Only 13% of the population do not receive a pension, and 71% receive the full pension”
Background Reading: There are numerous articles on the web containing a wide range of views – as with many web source, some ridiculous.
May we suggest a starting point - the ABC’s The Drum of the 2nd March 2011.
http://www.abc.net.au/unleashed/44578.html#comments
