Older Australians have dismissed a conservative think tank report that calls on government to raise the pension age and include the family home in the assets test.
Claiming that younger people are increasingly bearing the costs of their elders, the Centre for Independent Studies (CIS) report, The myths of the generational bargain, makes five policy recommendations to tighten access to both the pension and superannuation.
But Michael O'Neill, chief executive of over-50s lobby National Seniors, says the report's findings are divisive and inconsistent with international perspectives of the Australian system.
"For over a decade, Australia's retirement income system, now also bolstered by the 2 trillion dollar superannuation industry, has been considered world class both in terms of its comprehensiveness and sustainability".
"The line this report runs is tired and, in pitting generations against each other, divisive," he said.
In particular, O'Neill rejected the recommendation that the family home be included in the pension assets test.
"The family home defines who we are and what we aspire to as a nation. It is a sense of place for all Australians, and it is what we draw upon in times of crisis," he said. "It should not be sacrificed to budget shortfalls".
National Seniors response to:
- The sustainability of the Age Pension - In 2015, Australia spent 3.5 percent of GDP on the pension; the OECD average was 7.9 per cent. The 2015 Intergenerational Report forecast pension outlays in 2054, would, at worst, reach 3.6 per cent of GDP in 2054, and, at best, fall to 2.7 per cent.
- Raising the Age Pension age - The pension age will increase to 67 by 2023. This is one of the highest pension ages in the developed world. To increase it further without ensuring jobs for older Australians will see them simply shifting from one form of welfare into another.
- Including the family home in the pension assets test - Concessional treatment of the family home provides incentives for people to save for their retirement. Also, all the evidence shows that retirees who do not own their home - particularly full pensioners - face a high risk of poverty.
- Restricting superannuation withdrawals - There is no evidence that older Australians are blowing their superannuation. On the contrary, Productivity Commission research (2015) concluded that most retirees are attuned to longevity issues. It found that less than 30 per cent of super benefits are taken as lump sums with most taken as income streams. When taken as lump sums they're used to pay down debt, invest in income streams and purchase durable goods for retirement.