26 August 2019
Members of the Downsizing.com.au community have had a furious reaction to suggestions from a left-wing policy think tank that seniors should face higher taxes and death duties, along with being forced to wait longer to access the pension.
During August, the Grattan Institute released a report entitled Generation Gap: Ensuring a fair go for younger Australians.
The report is based on the premise that older Australians are wealthier than ever before, while younger Australians are struggling to get by.
“The wealth of households under 35 has barely moved since 2004. Poorer young Australians have less wealth than their predecessors and are far less likely to own a home,” the report says.
“In contrast, older households’ wealth has grown by more than 50 per cent over the same period because of the housing boom and growth in superannuation assets.”
The think tank then proposes to throw the policy book at older Australians, in an attempt to redistribute wealth from old to young. The report basically endorses every policy which would largely be considered poisonous and toxic by older Australians, including:
- Increasing the age that seniors can access the pension (the Grattan Institute’s preferred age is not specified)
- Taxing sizeable gifts and inheritances to family members
- Taxing all superannuation earnings in retirement at 15 per cent
- Winding back the Seniors and Pensioners Tax Offset, which is available to people over 65 and can deliver a tax offset of $2,230 for people earning up to $32,000
- Include the family home in the pension assets test (which would mean many homeowners would lose access to the pension)
- Introduce a tax on inheritances (that is death duties) and sizeable gifts given to children
- Increase the tax paid on superannuation balances which flow through to adult children when parents die
The ideas are staggering, given that the Australian electorate in May rejected the notion of an overtly ‘redistributive’ agenda - that it slugging the wealthy to help the less well-off.
In addition, the report fails to grasp that many of the ideas would actually hit seniors on lower incomes, particularly through delaying the pension age and reducing the tax offset initiative.
The report also does not appreciate that, just like younger Australians, the older Australian community is diverse and policy ideas need to reflect this diversity.
For instance, an increasing number of older Australians are renting and struggling with cost of living issues and need additional policy and regulatory assistance - not tax slugs.
Reaction from our community
The view from the Downsizing.com.au social media community was clear: the report was a crock. The report attracted 25 comments from our 21,000 Facebook followers.
“Dear Grattan Institute: well one thing is for sure you've certainly have got old age pensioners’ attention. The same attention we gave paying our taxes without whingeing for years,” said Diana Thomas.
“Unfortunately, us baby boomers have raised a very entitled generation used to having everything they want NOW. Most boomers have worked hard all their lives and are now due superannuation or pension,” said Kaye Mattfield
“When I was young and working which I did until I retired at 63. Never once did I even think about my taxes paying for pensions, it was just accepted. Show me the difference today,” said Patte Kirk.
“I can't believe I just read that ... What a lot of rubbish ..... I am still working .... Not sitting at home, started working at 16 and still going at 64 ... Really you people who do these studies need to get your facts correct,” said Kristine Crawford.
Cheryl Crook said: “I’m still working at 70. What about us subsiding their university fees, etc. Not to mention the pensioners unable to afford to heat and cool themselves. Bet the “think tank’ members won’t suffer too much when they retire. Think Tank get out in the real world.”
Meanwhile, Lee Hauser summed it up by saying: “A Labor policy think tank.”
The Grattan Institute lists says it is an independent think-tank focused on Australian public policy. “Our work is independent, practical and rigorous,” the organisation’s website says.
Its founding members are the Victorian Government, the Australian Government and the University of Melbourne. Other named supporters include the Myer Foundation, National Australia Bank, Westpac and Medibank Private.
One of its authors was Danielle Wood (pictured above).
By Mark Skelsey, Editor at Downsizing.com.au - email Mark at [email protected]
