Monday, August 03, 2015

"3 (wrong) attitudes towards ageing"

Here's an editorial from the Australian think tank, the Centre for Independent Studies. Not all of it fits into the NZ paradigm but it's useful in some respects:

3 (wrong) attitudes towards ageing

Our population is ageing. This will bring profound economic and fiscal challenges that will require significant changes in government spending. But it will also require us to change our attitudes towards ageing and the aged.

There are three specific attitudes that, if changed, would go far in combating the coming challenge.

Older workers are less valuable

A recent report found more than 50,000 people involuntarily retired in 2011 for job-related reasons. A 2015 survey showed a quarter of Australians over 50 reported experiencing age related discrimination, and one third of managers factored age into their decision making.

The government has responded by introducing incentive payments for hiring older Australians but government incentives aren't always effective in changing people's attitudes, only their behaviour.

It is in everyone's interest for older Australians to stay in the workforce longer. Someone aged 50 today could work for 20 more years, much longer than someone aged 25 is likely to stay in one job.

Retirees are poor, vulnerable and need protecting by government

The stereotypical image of a pensioner is someone struggling to get by in public housing who may occasionally have to eat pet food. However retirees are a very diverse cohort. Some are indeed struggling to get by, marginalised by high costs of living (especially rent) or health concerns.
But this is not all (or even most) pensioners. 75%-80% of pensioners own their home without a mortgage, while around 30% of single pensioners and 50% of couple pensioners have more than $900,000 in net worth.

It is condescending to think of older Australians as helpless. Just because someone has reached retirement age does not automatically mean they need government funding. If retirees can support themselves they should do so before asking for taxpayer help.

I've worked hard and saved, I deserve a pension

Perhaps one of the more pernicious myths in retirement income policy is that the pension is a reward for working hard and paying taxes or part of some grand intergenerational bargain.
It's not. The pension is a safety net for those who can't support themselves.

If taxpayers end up having to pay for your retirement anyway, they don't care if you were careful with your money while others blew theirs. The pension should not be a taxpayer-funded reward for looking after yourself.

Changing attitudes is every bit as important as fiscal reform in combating the challenges of an ageing population


Dazza said...

If retirees can support themselves they should do so before asking for taxpayer help.

I would not conflate "asking for taxpayer help" with "receiving a welfare entitlement". Sure, where individual circumstances allow, we all have the option to not apply for Super and save taxpayers the burden of paying for it but that would be a particularly noble and selfless individual that made such a choice.

Should I feel bad that I'm not such an individual?

This is a bit the the same as well off people who moan about others not paying "enough/fair share of" tax but fail to voluntarily do so themselves.

There is no guarantee the Government will spend this extra/excess/unspent money more wisely than the individuals they forcibly take it from so I can't see how not paying more tax or taking less of an entitlement is a bad thing.

You can disagree with point 2 and agree with point 3 but still take a pension simply because you're entitled to one under certain conditions. Declining to do so is (noble) idiocy.

Brendan W said...

Legally there is no entitlement to a pension. The Government could abolish the pension overnight with no recourse. Other than losing the next election.

But the reality is that a generation has grown up expecting a pension when they grow old. It becomes part of their retirement planning. They paid their taxes, they watched their old folk receive the pension as they hit 65.

Part of my pension planning involves the pension from the state.