OK. Thanks (to both OT and QF). Just needed to know that you had in mind an 'unreasonable' favouring of the older generation as something of an unspoken, secret, injustice. It's not a secret. So why does it happen?
Your facts are not disputed from my perspective. These are indeed the benefits which accrue to the pensioners. Is it unreasonable?
There is no way for governments to fund the cost of healthcare and support for the aged if steps are not taken to correct the trajectory. That's not a secret. Health and welfare for the aged are always the biggest features of western federal budgets and the cause of the projections looking so dire. It is accepted. That is why I am puzzled that this issue, in these recent exchanges, are expressed as some sort of revelation that must not be said.
So, what should happen in your view? Should the elderly be starved? Forced to move in to cramped government hostels? Put in to work-for-the-pension schemes? Made to walk up stairs instead of get pushed on wheel-chairs?
Is it your contention that those who are asset rich but income poor should be means-tested for pension entitlements? I think that is a reasonable perspective. However, Australia has always placed a very high value on the sanctity of the personal home which is why it is exempt from tax and pension assets considerations. It is a shared value of our society. It is widely accepted that we should not have to move out of our homes when aged. The young will eventually become the old. So we all have an eye to our future as well when considering how to share the burden.
The sanctity of the home is not unique to Australia. Take a look at the US. In Australia, our mortgages are not tax deductible, for a start.
If assets are moved to alternative arrangements to reduce income in an illegitimate way, that's an issue. But this sort of thing goes on in all sorts of places. The tax transfers happening within superannuation. Negative gearing. Family trusts. Dividend imputation. Capital gains tax relief.....all involve transfers of some kind, particularly to the asset rich...and those who just retired tend to have the most assets on average.
So...what to do?
+ Encourage own savings. Compulsory Superannuation 1980s via Paul Keating and Hawke. Genius move.
+ Discourage pension reliance. It you are on a full pension, it's not a great life. Escalate below inflation to allow structural adjustment.
+ Delay retirement age
+ Introduce some element of asset testing
+ Limit public health care services to bare essentials and encourage private healthcare and insurance
+...
Notice how many of these are already in place or in train.
Most people in the street do not understand the issue. The budget issue is not politicians or labor or liberal or this or that. It is middle class welfare and people getting money they do not need. Boom time cannot occur perpetually.
Almost every person I talk to immediately attacks me on a personal level. They almost always use personal attacks. I will recall a conversation I had recently, verbatim of course. The mindset is pervasive amongst almost all generations young and old from my experience in talking about the issue.
Other person: Oh the budget is so bad -it is the government spending
Me: I agree the budget is getting worse. Do you realise what the largest expenditure?
Other person: Welfare and all of these bludgers and politicians.
Me: Yes welfare is the largest expenditure. Do you realise what the largest welfare expenditure is ?
Other person: Young people and the unemployed bludgers
Me: No the largest expense is pensioners
Other person: Waits... thinks about it. But they have worked all their life
Me: Standard point about main residence loop holes,gifting, tax concession and savings
Other person: Your a terrible person etc etc poor old people are struggling. Continued personal attacks.
I am glad you agree with some of the points I am making.
No one wants to tackle the issue that is destroying the budget. Middle class welfare.
The issue with gov spending is hardly ever income, most of the time it is spending.
Unfortunately even you have resorted to these qualitative arguments which I cannot argue against.
So, what should happen in your view? Should the elderly be starved? Forced to move in to cramped government hostels? Put in to work-for-the-pension schemes? Made to walk up stairs instead of get pushed on wheel-chairs?
The issue is about Middle class welfare, not people who have suffered a bad life, that is the outlier in Australia. A person with wealth should not be getting benefits full stop.
Legal tax transfers do not make it sustainable or reasonable. I reject that argument because it is legal and I can do it then therefore I should.
1) main residence not exempt or value limited
2) Stop gifting / tax gifting
3) Main residence not tax exempt
4) Super can't all be spent and then pension claimed
5) Wealth should be investigated to stop money disappearing before pension age
6) Assets limited further
7) Introduction of competition and regulation to help market failure and gouging in the medical sector
Remember the pension is a benefit meant for people who are struggling not people who have strategically placed the money by spending, gifting or in the main residence. People should support themselves not be having decent estates given tax free to their children.
If it is not stopped the buck will keep getting passed. We have to live in reality. Later generations will get hit because of the greed on people who already have money.
I am really disappointed in how selfish people are being by legally gaming the government.