THE release of the Intergenerational Report today confirms the government's continued intention to cut the age pension, highlights the need for more focus on combating age discrimination and having a more dynamic workforce participation policy, and reaffirms the need for a comprehensive retirement incomes review, says leading seniors' advocate COTA Australia.
COTA Australia chief executive Ian Yates said population and demographic changes heralded "the age of the senior", which should be celebrated.
"The ageing population means we are going to be forced to better value older people in our society as we will need to rely on them to balance future budgets. A productive future of Australia will need to be a productive older Australia," Mr Yates said.
"The Intergenerational Report acknowledges the economic benefit of harnessing the wisdom and experience of older people through greater participation in the workforce.
"Right now, a quarter of people on the Newstart job-seeking allowance are over 50 - one-third of the long- term unemployed - and despite best efforts, many of them simply can't find employment," he said.
"Many languish for years on Newstart and move straight onto the age pension.
"If we need older Australians to work longer, there will need to be more sophisticated measures and incentives put in place to break down discrimination against older people and encourage employers to keep them on."
Also we will need to look at ways to make workforce participation in later life more attractive for older people like increasing part time and more flexible arrangements, and assisting people make transitions to new skills in growth areas of the economy."
Mr Yates said the Report clearly outlined the effective cut to the age pension proposed in the last Budget and yet to pass the Senate.
"Despite Government assurances that the proposed changes to the age pension will not adversely effect older people, the Report clearly names reducing pension indexation rates to CPI only as a key budget saving.
"It forecasts changing it back to Average Weekly Earnings once achieved a Budget surplus is achieved in 2029-29.
"This is an admission of the negative effect of this policy on pensioners - on Commission of Audit estimates at least $80 a week less for the pensioner over the long term in today's dollars. Pensions actually fall as a proportion of GDP if the indexation cut is implemented.
"What is glaringly missing from the Report is any quantification of the cost to revenue of continuing the existing generous superannuation tax concessions - the bulk of which go to the top twenty per cent of income earners, the majority of whom would not be eligible for the pension when they retire anyhow.
"These tax-payer funded concessions also encourage more well off workers to access their savings and retire at 60 (or earlier at present) rather than staying in the workforce longer.
"In effect government is using taxpayer funds to subsidise the financially well-off to leave the workforce early - contrary to the message that we should all work longer.
"These concessions are in fact worth the same value as the whole cost of the Age Pension and are going up rapidly. They could either be reduced and save the budget substantially, or be redirected so that they do achieve real income retirement improvements for more older Australians and save pension costs."
Mr Yates reiterated his call for an independent, comprehensive retirement incomes review, which the Business Council of Australia also recently supported.
"What is clear from the Intergenerational Report today is the need to take a holistic view at why people retire, what incentives can be used to keep them working, how superannuation can be improved to increase the number of people who can fully or part fund their own retirement and the best way to tackle age discrimination.
Mr Yates said COTA welcomed the government saying it was open to alternative measures to bring the Budget back to surplus.
"We look forward to a constructive dialogue with the government on doing just that." in a productive, fair and equitable way."
Media contact: Ian Yates 0418 835 439, Olivia Greentree 0439 411 774.
COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.
Over 50s outraged by out-of-touch comments by the Commonwealth employment department
People over 50 desperate to find work in an ageist employment market are greatly offended by claims made by a Commonwealth government department that older people are happily retiring on the dole, COTA Australia said today.
The claims, made in the department's submission to the Senate Education and Employment Legislation Committee Inquiry says: "it is no longer acceptable for 55-59 year old job seekers to effectively retire on Newstart while undertaking a bit of voluntary or part-time work."
COTA CE Ian Yates said the commentary completely ignores the fact that if you lose your job in your 50s it is extremely difficult to find another, which is why there are increasing numbers of older people on the Newstart Allowance.
"This is an outrageous slur on the efforts of thousands of older Australians who are desperately looking for work and yet constantly overlooked in favour of younger job seekers," Mr Yates said.
"It's bad enough that many people over 50 have to suffer the humiliation of multiple knock-backs by employers, despite their years of experience and clear ability to undertake the work. Now they have to put up with the Department of Employment laying the boot in too.
"The Department should shift their focus from going out of their way to offend older Australian job seekers and concentrate on ways to reduce the high incidence of age discrimination and look at ways to stimulate a jobs market for older people.
"It is appalling that a Commonwealth Department is so out of touch with the reality of the employment challenges facing older people.
"The evidence about age discrimination is clear and irrefutable, as Age Discrimination Commissioner Susan Ryan has noted, and presents a most disturbing picture for many older job seekers.
"The government's new Restart wage subsidy recognises that incentives are needed to encourage employers to hire older workers - and more measures are needed."
Mr Yates said COTA and other advocacy groups had been calling for an increase in the Newstart allowance for years since people living on Newstart find it impossible to make ends meet and keep their heads above the poverty line.
"It is ridiculous to suggest that older job seekers just want to spend their time doing a bit of voluntary work while living on the paltry income provided by Newstart.
"Given the choice, older people want to have their wisdom, skills and experience recognised by being fully employed in meaningful paid work as they have been for the rest of their life.