David Leyonhjelm guest post: Pensions are charity

From The Fin Review

To my fellow mature Australians, I’d like to explain something. We are not entitled to an age pension merely because we have paid taxes all our life. Pensions are not for everyone; fundamentally they are welfare, reserved for the poor.

Like many others, I have been in continuous employment since 1974 and paid my taxes each year, increasingly fairly considerable sums. But governments have not saved my taxes to pay for my retirement. Instead, those sums were spent each year. In fact, our taxes haven’t even covered each year’s government spending. Over the past forty years, budget deficits have been the norm, with the country now in debt to the tune of $245 billion. If anything, I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.

And it’s not as though my taxes have been devoted to buying assets that will be in service for decades to come. Successive Commonwealth Governments have been selling off these assets for much of my taxpaying career. Rather, my taxes have been devoted to providing services to the voters of the day, including many from which I’ve benefitted, such as medical services, university studies and opera performances.

It is true my taxes have also funded the welfare state. But that doesn’t represent a down payment on a pension. The welfare payments were primarily to parents, the sick, the disabled and the unemployed.

It is also true that my taxes funded age pensions, but this has been a small part of my tax bill. When I started in the workforce, there were more than seven working age Australians for every Australian aged 65 or over. There are still around five working age Australians for every older Australian now. But at some point during my retirement, this ratio will probably fall to less than three.

More to the point, my taxes have not helped every older Australian, because the age pension has never been a universal entitlement. Eligibility has been income tested since 1909, and asset tested from 1909 to 1976 and then since 1985. This is different from the UK and New Zealand, where pensions are not means tested and funded from special tax contributions.

Given the debt we will leave behind, baby boomers like me have a duty to make the asset test comprehensive. Those who own million dollar houses shouldn’t rely on welfare when they can draw on their own wealth, especially knowing they can take out a reverse mortgage and avoid the need to move. A desire to leave the family home to dependents is no justification for receiving welfare funded by the taxes of people who don’t even own a home.

We also need to increase the eligibility age for the age pension. Current law will lift this to 67 by 2023 and the Commission of Audit recommends a glacial increase to 70 by 2053. We actually need to get to 70 by 2027. This would mean fewer baby boomers escaping the burden of debt we’ve helped create. And it would also mean we don’t defer fiscal responsibility forever.

Such a change would also belatedly reflect the reality of our lifespans. The eligibility age of 65 was introduced in 1909 when male life expectancy at birth was 55. Now a 65 year old is likely to live to 86. Many will remain active and healthy over this period, and those unable to work will be eligible for the disability support pension. Taxpayers should not be required to pay people of sound body and mind not to work.

Finally, before anyone complains about hypocrisy from a politician, I should point out that the scheme giving retired federal politicians a generous life pension was closed in 2004. New politicians like me contribute to a superannuation fund, the same as everyone else who has a job. And, like everyone else, whether we will need welfare in the form of a pension depends on how much super we manage to save, not how much or how long we have paid tax.

What Australians have an entitlement to is the assets we own; our houses, our superannuation, our savings. If we give in to the notion that everyone is entitled to government handouts when we are not poor, then our assets will surely suffer the death of a thousand taxes. Let’s save for our retirement and keep pensions in the charity basket.

David Leyonhjelm is the Liberal Democrats Senator for NSW

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182 Responses to David Leyonhjelm guest post: Pensions are charity

  1. Joe

    All good and well.
    However, it’s hardly our fault if we bought a hovel and through the shear expediency of living, after 60 years the hovel is worth millions.

    Furthermore, many Australians expect that they will have to sell their home to move into aged-care, for which the asset sale of a home is a minimum requirement. Why should they be expected to pay for those who never provided for their own retirement or welfare.

    A true libertarian would never suggest the forced confiscation of assets (diluted ownership) just because the government is running out of money. A libertarian would allow the persons who provide for their own retirement the courtesy of STAYING OUT OF THEIR AFFAIRS.

  2. Karabar

    Now why couldn’t Joe come out and just say it like it is?
    I know, the bloody media would have a field day, and the whiners would whinge.
    But most people already know the truth.

  3. Rossini

    Well done David,

    I too have worked and saved through out my working life and hopefully will not have to rely on the old persons charity payment. Fortunately I own my house, which is obviously worth much more than I paid for it.
    Why should I have to reverse mortgage if I need money to help me in older age if my investments run out?
    My older brother who too has had a well paying job during his working life is now on the old persons charity payment because all his working life he either pissed his wages up against the wall or gambled the lot.!!!!

  4. Big_Nambas

    FMD. We poor people were paid 9% super, David gets 15%. And Labor wants to bring back life time pensions for the pigs at the trough.

  5. Eyrie

    Save for retirement. Excellent. Now make the inflation rate 0.00%. It can be done as it is merely engineered by the Reserve Bank. Overshoot one year, so undershoot the next so that integrated over time it remains at 0.00%.
    Engineering inflation of 2% is about as sensible as shrinking the standard meter by 2% each year and claiming things are getting better as we’re all living in larger houses.
    This largely fixes the expensive house in retirement problem too.
    Only problem is that if there is a large pool of savings be it private, public or superannuation, at some point a greedy government will grab it.

  6. .

    David is suggesting that we make the pension harder to get. He isn’t robbing pensioners and widows like some think any change to pensions entails.

    Socialism is unsustainable. The boomers were lucky as the demographics suited them. Now it no longer works as intended.

  7. .

    Why should I have to reverse mortgage if I need money to help me in older age if my investments run out?

    Because your heirs don’t have a legally recognised birthright or inalienable moral claim to inherit your home?

  8. .

    Big_Nambas
    #1605761, posted on February 17, 2015 at 11:37 am
    FMD. We poor people were paid 9% super, David gets 15%. And Labor wants to bring back life time pensions for the pigs at the trough.

    Given he noted the change in 2004, he’d pay a higher contribution as well wouldn’t he?

  9. sfw

    I’m more than happy to work to 70, even longer if I can. The trouble is when you are over 50 it gets very difficult to get a job. I changed jobs at 49 and went to a senior position in a medium sized private company. Unfortunately the owner put his son in charge and after a couple of years….you know the rest. Since then I have worked wherever and when ever I can. I have applied for so many jobs that I have qualifications and experience in that I’ve lost count. I’m currently driving trucks but it’s the hardest physical work I’ve done, I leave home at 9.30am and get home at 1am the next day. 12 to 14 hours driving as well as loading and unloading is very hard on the body. I don’t know how many years I can keep it up and when I can no longer do it, well I have no idea what will happen.

    My point is, it’s nice to say that one should work till 70, I just can’t see the opportunities for it.

  10. duncanm

    Joe..

    Why should they be expected to pay for those who never provided for their own retirement or welfare.

    yes – but the pension is little different from any other social welfare in that respect.

    A true libertarian would never suggest the forced confiscation of assets (diluted ownership) just because the government is running out of money. A libertarian would allow the persons who provide for their own retirement the courtesy of STAYING OUT OF THEIR AFFAIRS.

    Who’s suggesting confiscation of anything? The point is you have a large asset upon which you can draw to fund yourself.

  11. Rossini

    “Because your heirs don’t have a legally recognised birthright or inalienable moral claim to inherit your home?”

    Well fullstop….what is the point of any person saving for a house or to provide for their retirement.
    Seem to remember Barry Cohen(?) (former ALP member of parliament.) commenting on his living in a “retirement home” that cost him a big quid to get into and then thousands of dollars each year to stay, when the alcholic next door to him was staying for “free”….just saying

  12. .

    Well fullstop….what is the point of any person saving for a house or to provide for their retirement.
    Seem to remember Barry Cohen(?) (former ALP member of parliament.) commenting on his living in a “retirement home” that cost him a big quid to get into and then thousands of dollars each year to stay, when the alcholic next door to him was staying for “free”….just saying

    …and whose fault is that?

  13. tomix

    The merciless march of the far left. The general idea of the age pension was that a person worked for 50+ years and paid extornionate tax all that time had earned their pension.
    Now, the Gov’t is floating the idea that only people who have been on benefits since 1973 deserve a pension.
    Death panels, here we come.

  14. Joe

    Who’s suggesting confiscation of anything? The point is you have a large asset upon which you can draw to fund yourself.

    Forcing people to draw down on their assets is confiscation.
    The asset is already being targeted by the retirement village industry. Have you tried to get a placement into one of these villages without a house? Your now saying that the government should force you to draw down because you had the misfortune to exist long enough for your house to be worth more than what some womble deems is more than you should have? Who makes that assessment? How is an asset worth anything until you sell it?

  15. duncanm

    Well fullstop….what is the point of any person saving for a house or to provide for their retirement.

    I dunno – what’s the point of having a job and contributing to society. May as well sit on your arse and draw the dole.

  16. duncanm

    Forcing people to draw down on their assets is confiscation.

    No ones forcing anything. Why is your house different to a stash of cash in the bank?

    If you have the means, you should fund your own retirement.

  17. Joe

    No ones forcing anything. Why is your house different to a stash of cash in the bank?

    Oh yes, I can just see you living in a stash of cash. Idiot!
    You live in your house!
    If you cannot see the difference then I have to conclude that you are one of those insufferable accountants that think all assets are the same.

  18. Squirrel

    “….baby boomers like me have a duty to make the asset test comprehensive. Those who own million dollar houses shouldn’t rely on welfare when they can draw on their own wealth….”

    If we’re going to head down this path, let’s make it comprehensive – so not just the usual populist cop-out approach with a very high value threshold for inclusion of homes, which means that those below the nominated figure slip through the net, along with those who transfer the asset to trusted (if they are so lucky) relative(s) some time before lining up for the pension and related benefits and concessions. Likewise, no escape clauses for farms, family businesses, assets held in trusts, overseas assets etc. etc. – if it’s going to happen, one in, all in – spread the burden fairly.

    Most impartant of all – no grandfathering for existing benficiaries – phase it in, if necessary, for ALL pension claimants – current and future.

    For the longer term, get the superannuation system back to its original purpose of reducing substantially demands on the age pension system – a significant cutback in the scope for double-dipping would be a good start.

  19. duncanm

    Joe,

    there’s no need to get abusive.

    A house is an asset. You can sell it – and surprise – turn it to a liquid asset (cash). Alternatively, you can reverse mortgage as suggested.

    If you don’t understand that.. well.

  20. Joe

    “Because your heirs don’t have a legally recognised birthright or inalienable moral claim to inherit your home?”

    No they don’t. However, passing the house that the parents lived in to the children on death raises the wealth of the children and makes it less likely that they will draw on the government pension. Conversely, forcing the parents to sell their house to fund their lives means that less will be passed to the children with the result that they will require the government pension.

  21. Joe

    A house is an asset. You can sell it – and surprise – turn it to a liquid asset (cash). Alternatively, you can reverse mortgage as suggested.

    YUP an accountant.

  22. C.L.

    So an 88 year-old widow should sell her house or stumble down to the bank to arrange a reverse mortgage. Yeah, that’s really going to work.

    We shouldn’t be bossing the elderly around.

    We should boss around the subsidy-bludging young for chucking their children in ‘child care.’

    There is no reason why they can’t sell a car and various other assets to finance mum at home.

  23. C.L.

    Indeed, if you use or support ‘child care’ you are – ipso fact0 – a communist.

  24. Rob MW

    To my mind the points raised by David are only a start.

    Retirement and succession planning has been, by design, set up to fail through powers granted to the judiciary, and more generally the ambulance chasing legal fraternity which, under challenge, allows a rewrite of a person’s last will and testament after passing.

    The underlying result of this intervention is that people with substantial assets are divesting themselves (gifting) to their nominated beneficiaries either prior to retirement or during their retirement but well before the tin gets kicked down the road and by default, making eligibility for the aged pension more certain.

    My point is that simply tightening up the eligibility criteria for the aged pension is not necessarily the sole remedy, the remedy must also encourage the retention of assets through certainty of retirement and succession planning, including the protection of a person’s will from intervention.

  25. .

    tomix
    #1605792, posted on February 17, 2015 at 12:00 pm
    The merciless march of the far left.

    What a loon. Not giving money to those with superannuation is “leftist”.

  26. JC

    I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.

    David, every fucking quarter I am forced to send a cheque to the ATO and you want me to send them a lump sum when I can no longer work? Have you been drinking?

  27. .

    We should boss around the subsidy-bludging young for chucking their children in ‘child care.’

    The whole thing has got to stop. Taxes are the Gordian knot we must cut. Taxes force both parents to work. Then more taxes are raised to subsidise work as to make housing affordable.

    Cut taxes. They are the ultimate form of bullying.

  28. Tim Neilson

    “Conversely, forcing the parents to sell their house to fund their lives means that less will be passed to the children with the result that they will require the government pension.”
    Yes, because raising children to understand that they are going to have to pay their own way never works. Conversely all the trustafarians are well adjusted net contributors to society, and never go off the rails on drugs etc. squandering their inheritance.
    You know it makes sense!

  29. .

    Yes, because raising children to understand that they are going to have to pay their own way never works. Conversely all the trustafarians are well adjusted net contributors to society, and never go off the rails on drugs etc. squandering their inheritance.

    As long as they aren’t bludging off the taxpayer, why should we care?

  30. JC

    I am also surprised that the LDP senator is talking about revenue raising measures. We have a fucking spending problem, not a revenue problem.

  31. .

    David, every fucking quarter I am forced to send a cheque to the ATO and you want me to send them a lump sum when I can no longer work? Have you been drinking?

    You’ve been trolled, Sir.

  32. Empire

    No ones forcing anything. Why is your house different to a stash of cash in the bank?

    Oh yes, I can just see you living in a stash of cash. Idiot!
    You live in your house!
    If you cannot see the difference then I have to conclude that you are one of those insufferable accountants that think all assets are the same
    .

    You need to make the case for why an individual owning significant wealth is entitled to welfare, before you start ratchetting up the abuse.

    You haven’t.

  33. stackja

    Super industry is very charitable to themselves.

  34. Leigh Lowe

    Slow down Dot.
    When responding to a DL post, try not to appear too much like an eleven year old girl at a One Direction concert.

  35. .

    The super industry is a joke, in 1988 when Keating started the racket, nearly all breadwinners had a retirement saving account, even if that only equated to 55% or so of the “workers”.

    Which also included retirees doing 1 hour of work a week and pimply faced kids earning $3 an hour at Maccas.

  36. JC

    Dot

    Seriously, david wants use to hand over a lump sum to the ATO on retirement. Firstly I’d rather die than retire, but for FFS hand over a lump sum? This is nuts.

    And by the way I don’t want Medicare or any bullshit like that as I’m happy to pay for my own med insurance.

  37. .

    Leigh Lowe
    #1605840, posted on February 17, 2015 at 12:34 pm
    Slow down Dot.
    When responding to a DL post, try not to appear too much like an eleven year old girl at a One Direction concert.

    No fanboi behaviour has been engaged in.

    You are too quick to jump to that conclusion and it speaks volumes about your agenda.

  38. mundi

    The pension age should not be moved up and up. Modern medicine has pushed up average life expectancy by mainly preventing early deaths. If you take only the people who have reached 65, the increase in life expentancy is basically nothing.

    If you don’t want to pay it, just remove it. Pushing the age up 2 years ever 6 months is silly.

    Pensioners should be forced to reverse mortgage. You can even get them as open ended annuities, with the banks taking all risk if you should end up living unusually long. However the problem is people who piss there money away are rewarded with a pension, while those who are prudent are not.

  39. JC

    Super industry is very charitable to themselves.

    Heather Sellout is on the board on one of these funds. Draw your own conclusions.

  40. Joe

    You need to make the case for why an individual owning significant wealth is entitled to welfare, before you start ratchetting up the abuse.

    A house IS NOT WEALTH! It’s where you LIVE!
    A Share portfolio is WEALTH – it’s where you earn income or capital gains.
    Where, in any of my postings have I talked about wealth? I’m talking about the house you live in.

  41. RE previous posting about politicians’ pensions – in case this hasn’t already been posted, it has been bagged as a fake.

    Win Fowles of the Defence Force Association has completely disavowed it, and says it’s been circulated before.

  42. J.H.

    The trouble with raising the pension age is the assumption that employers will be actively seeking employees that are older than 65……. The truth is, they will not be. So there has to be some kind of safety net that allows a person to live in dignity in their twilight years.

  43. .

    You work for yourself now JC so you probably don’t remember everything an employee does.

    Most workers do pay a lump sum on retirement to the ATO, in that their ETP is taxed and it is paid immediately, if you have two years of long service leave and holiday pay accrued, it is (most likely) whacked at the top marginal rate.

    I reckon that is the point.

    They’d be better off simply not paying as much tax and being ineligible for benefits.

  44. duncanm

    Joe… we’ve tried, honestly.

    But you are a fucking idiot.

  45. JC

    Joe

    Stop trolling. Of course a house is an asset. There is the building component and of course the land.

    The fact of the matter is that a house is really not much of an issue for pension purposes. Rates would blow a pension away with an expensive house.

  46. .

    A house IS NOT WEALTH! It’s where you LIVE!
    A Share portfolio is WEALTH – it’s where you earn income or capital gains.

    Wealth is an accumulation of income flows.

    Home ownership is an asset as it allows you to stop paying income outflows.

    A share portfolio allows you to receive income inflows.

    In the accounting sense, both allow your cash at bank or on hand to accumulate or burn at a slower rate.

    It is hard to see how a fully owned home is not an asset.

  47. Empire

    Here I was, thinking that property acquisition might arise from saving and leveraged investment.

    Turns out houses come from the housing fairy.

  48. Ant

    “If anything, I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.”

    Speak for yourself sunshine. Maybe you feel so compelled now having your snout in the trough (and my pocket) yourself.

    Elected governments should be constitutionally bound to balance budgets. Their primary function, therefore, would be to decide which useless bureaucracy inhabited for life by paper pushing tax sponges gets slashed first.

    As for pensions, enough with the “woe is me; the haves and have nots” BS. If we’re going to have a pension system then means testing tends to punish success and reward irresponsibility. How is that “fair”?

  49. .

    That’s what I reckon the point is, JC.

    Imagine you’re on 70k a year.

    You get 104 weeks of LSL and holiday pay.

    You’re now on 210k for that final year.

    The extra 140k you earn isn’t taxed at the 70k rate. It is taxed at much higher marginal rates.

    Then we make people we’ve confiscated savings of, eligible to receive benefits, in part funded by said confiscation.

    An alien would perhaps think we’re mad for designing such a system.

  50. .

    Speak for yourself sunshine. Maybe you feel so compelled now having your snout in the trough (and my pocket) yourself.

    You should outline how the ATO isn’t going to make a motzah on your ETP.

  51. TerjeP

    Save for retirement. Excellent. Now make the inflation rate 0.00%. It can be done as it is merely engineered by the Reserve Bank. Overshoot one year, so undershoot the next so that integrated over time it remains at 0.00%

    An inflation target of 0% is actually Liberal Democrat policy.

    http://www.ldp.org.au/index.php/policies/1280-money-and-banks

  52. CDM

    What I object to is the “we” did this, “we” spent up etc. Actually, “we” didn’t do any of this spending, the politicians did. They were the caretakers of Australia, and they have spent the lot. The worst ones are the Socialists, but once they started (with Whitlam) spending up on the social programmes to keep their vote base, then everyone else had to follow on. I believe the fairest way to do this is to add up the total of the net earnings of people over their lifetimes, and if they have spent their money on travel and have nothing to show for it, then they do not get anything. Yes, they starve, or get a job. People like myself, who saved and scrimped to get into a home, and paid it off, and did not go on expensive holidays, are now penalised because we have something. I say penalise the people who have wasted their money.

  53. Oh come on

    Forcing people to draw down on their assets is confiscation.

    No it isn’t. It is up to you how much you save to fund your retirement, and how quickly or slowly you draw those savings down. If you didn’t put enough money aside to cover your retirement in a manner that you’re accustomed to without selling your house, that’s nobody’s fault but your own.

    What *is* confiscation is forcing others to pay more tax because you feel a particular asset of yours should be assigned a special status and not considered an asset.

    And before the “reverse mortgages are a rip off!” mob get started, that alone doesn’t mean you shouldn’t have to fall back on them. Besides, that’s an indication that the reverse mortgage market is immature. If more people started taking out reverse mortgages, competition would result in more attractive arrangements being offered.

  54. JC

    Okay, thanks Cot. Good points.

  55. JC

    Okay, thanks Dot. Good points.

  56. stackja

    CDM
    #1605869, posted on February 17, 2015 at 12:52 pm
    I say penalise the people who have wasted their money.

    ALP voters come to mind.

  57. H B Bear

    Joe… we’ve tried, honestly.
    But you are a fucking idiot.

    I suspect Joe might be one of those PUP voters. Or a Queenslander. Or both.

  58. TerjeP

    I know this article might be interpreted as advocating some sort of lump sum tax on baby boomers. But that is merely the Senator stiring the pot and not what he is actually advocating. He is saying the well off should not look apon the pension as an entitlement and that they should be prepared to fund their twilight years by selling their house or else access their home equity by some form of reverse mortgage. The pension should be for those that are unable to fund themselves.

  59. Oh come on

    A house IS NOT WEALTH! It’s where you LIVE!

    Yeah right. Good luck with that line in a bankruptcy court, squire.

  60. duncanm

    Terje – that’s the way I read it, too.

    Playing the Devil’s Advocate.

  61. mundi

    I think it’s pathetic the way so many of the older generation just expect pension and make idiotic claims that they need it because they didn’t have the ‘entitlement’ of super annuation.

    A couple on the age pension get a total of $644/wk and own thier home (unless they have been complete bums).

    How many working families make $644wk after tax and after housing costs? The average gross family income is $68,000. $1,000/wk after tax, and $550-$600 per week after rent/mortgage.

    The truth is People on pension live better than the majority of working class families. The pension is absurdly high and it is only the single pensioners who refuse to house share who ever complain about not being able to afford things.

  62. Vicki

    I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.

    This sort of thinking is why David Leyonhjelm is not trusted by many Liberals.

    It is manifestly unfair to those who have paid hefty amounts of personal & business tax throughout their working (& retirement!) lives. This squirrel would like to enjoy the fruits of her labour (and foresight, risk etc), rather than, by compulsion, have them taken.

  63. .

    The truth is People on pension live better than the majority of working class families. The pension is absurdly high and it is only the single pensioners who refuse to house share who ever complain about not being able to afford things.

    IF this is true, people don’t know because they don’t realise how heavily they are taxed – into being working class, basically.

  64. Combine Dave

    Lol

    Even without scrolling up I am betting this article went down like a lead ballon.

    It’s our fundamental ‘ooman rights to work for a few years, retire at the age of 60, blow all our super, property, and savings on luxury goods and than spend the next 20-30 yrs on the OAP, whilst residing in a multi-million dollar home facing the harbour.

    Don’t let anyone try to tell you dfferently.

  65. Rich

    All good and well.
    However, it’s hardly our fault if we bought a hovel and through the shear expediency of living, after 60 years the hovel is worth millions.

    Simple solution – provide the pension to those who are ‘poor’ (such as those who pissed money up the wall and only invested in their own home) and then claim back the balance from the assets after death – you get to keep your welfare, the taxpayer gets it back, and if the house is worthless there’s no risk like with a r-mortgage

    The problem is people come to expect welfare, while quite happy to hide their wealth in their own home – with my plan they can still be poor, but they’ll pay back what they were given out

  66. Vicki

    I know this article might be interpreted as advocating some sort of lump sum tax on baby boomers. But that is merely the Senator stiring the pot and not what he is actually advocating.

    Well, that is what he said.

  67. .

    Vicki
    #1605891, posted on February 17, 2015 at 1:17 pm
    I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.

    This sort of thinking is why David Leyonhjelm is not trusted by many Liberals.

    It is manifestly unfair to those who have paid hefty amounts of personal & business tax throughout their working (& retirement!) lives. This squirrel would like to enjoy the fruits of her labour (and foresight, risk etc), rather than, by compulsion, have them taken.

    Christ you are dumb, or here to troll libertarians.

    “Not trusted by many Liberals”

    Oh fuck me. They complained when he was elected over Arthur Sinodinos. Now who is defending Sinodonis?

    Can’t you tell the difference between advocating a policy, but pointing out an absurdity like the wealth destroying taxation of long service leave and other accrued leave on retirement?

    Oh, but you can tell us about the wonder of kite flying such as doubling the GST?

    What a crock of shit. At least we know when you can use a shovel.

  68. .

    Vicki
    #1605896, posted on February 17, 2015 at 1:19 pm
    I know this article might be interpreted as advocating some sort of lump sum tax on baby boomers. But that is merely the Senator stiring the pot and not what he is actually advocating.

    Well, that is what he said.

    Did you just say the Liberals want a 30% GST and no income tax cuts, and they don’t have the guts to ever repeal the Fair work Act?

  69. Grey ghost who walks

    David is sounding more like ‘Little John’ of Robin Hood fame. He said his share of taxes has increased over the years and by a considerable amount.
    So Boo Hooo for him! That is called life.
    Anyway, he should stop the navel gazing and get on with the job of rooting out the waste in Canberra and the attendant fat cats. One can just see that by the numbers of them who hang around, with their lanyards and clipboards, following politicians.

  70. Entropy

    Terge, you are right, DL was just making a jesting point which has been used to derail the thread. It isn’t about paying a lump sum at retirement at all, which was a throw away line, but about the problem of people using the argument that they have paid taxes and therefore are entitled to the pension, when in reality they spent their lives voting for politicians and policies that not only spent the taxes they paid on recurrent spending, but also future taxpayers’ taxes on that same spending. So the next generation will be expected to not only pay for the recurrent spending in their day, but also the recurrent spending for when the boomers, Xs and Ys were taxpayers. But especially those fricking boomers, who will be sitting on massive assets.

  71. .

    David is sounding more like ‘Little John’ of Robin Hood fame. He said his share of taxes has increased over the years and by a considerable amount.
    So Boo Hooo for him! That is called life.

    It’s called socialism and it has made us poorer. You’re not a former ALP Senator by chance, you don’t confuse communism with democracy, do you?

  72. duncanm

    Vicki

    I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.

    This sort of thinking is why David Leyonhjelm is not trusted by many Liberals.

    Stop verballing the guy and include the full quote:
    If anything, I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving.”

  73. There are those that work for a living,
    and those who vote for a living,
    and then there’s Joe.

  74. .

    It isn’t about paying a lump sum at retirement at all, which was a throw away line, but about the problem of people using the argument that they have paid taxes and therefore are entitled to the pension, when in reality they spent their lives voting for politicians and policies that not only spent the taxes they paid on recurrent spending, but also future taxpayers’ taxes on that same spending.

    Correct. Someone finally gets it.

    The National Welfare Act 1943 was repealed in 1985.

    Few are left with a moral claim to the pension.

    I think the point about taxing accrued leave on retirement at extremely high EMTRs is also valid. We take away masses of accumulated income in one hit then qualify those same people for the pension? It is simply an exercise in churn and it engenders dependence.

  75. duncanm

    I despair at this thread.

    The place has either been taken over by Trolls.. or there really is a significant portion of the population that believes that the pension is somehow unique & different from any other form of welfare, and that we are all somehow owed money from the state (ie: other taxpayers).

  76. .

    Stop verballing the guy and include the full quote:

    Vicki is a dishonest LNP troll? I couldn’t have guessed!

  77. .

    duncanm
    #1605909, posted on February 17, 2015 at 1:30 pm
    I despair at this thread.

    The place has either been taken over by Trolls.

    You, me and JC are in agreement.

    Let’s give them hell.

  78. steve of glasshouse

    Employers pay the compulsory super

  79. Dan

    Most workers do pay a lump sum on retirement to the ATO, in that their ETP is taxed and it is paid immediately, if you have two years of long service leave and holiday pay accrued, it is (most likely) whacked at the top marginal rate.

    IIRC, an ETP is taxed at 15% for over 55’s (plus medicare levy) and at 30% (plus levies) for those below 55

  80. Dan

    oops, i think that is only applicable to redundancy payments

  81. rebel with cause

    On the upside, increased pension payments will leave the government with little to spend on more harmful interventions elsewhere in the economy.

  82. H B Bear

    Employers pay the compulsory super

    It’s all just labour costs. Many employees, particularly lower paid workers, would be better off taking it as current wages but in reality all that is likely to happen is that house prices just get bid up further in the great Ponzi scheme that is Australian capital city property.

  83. .

    Yes Dan I called all accrued payments on salary ETP, that was technically incorrect.

    The only break you get is on redundancy, if you are over 55.

    It is a terrible system which punishes incentive, then creates churn.

  84. I am the Walras, Equilibrate and Price Take

    Oh come on
    #1605878, posted on February 17, 2015 at 1:00 pm
    A house IS NOT WEALTH! It’s where you LIVE!

    Yeah right. Good luck with that line in a bankruptcy court, squire.

    Or a divorce court.

  85. Dan

    I’m in agreement with you dot, and the ATO guidance on ETP’s is a dog’s breakfast

  86. george

    Fine, do away with the pension and trim all those quangos and authorities and commissions and orgs that never seem to tire of finding ways to pilfer taxpayer funds.
    The taxes should plummet. No more jobs for the mates, first class travel, govt aircraft for non essential movements….as if there are that many of the essential kind anyway.
    No more parasitic elements on society.

    I know another way to cut the ridiculous waste.
    First shoot all those lawyers.
    Hang draw and quarter any politician that is found to be corrupt be it for a bottle of wine or a pen or a weekend stay at the mates’ chalet.
    Watch their memories improve outta sight and their morality wrt to their responsibilities find new levels never before achieved.

  87. Fred

    Old people aren’t really to blame for high house prices. It’s the media, and the younger generations were too busy being little wanker narcissists whilst it was all happening. Given all the 4WDs lined up outside private schools to take little precious home, they still are.

    Just raise the GST.

    Anyway, the whole thing is still in danger of crashing, if you believe certain people who have good arguments.

  88. .

    No Fred.

    We are not going to raise the GST because you think everyone with a 4WD is a wanker.

  89. tomix

    It’s all just labour costs. Many employees, particularly lower paid workers, would be better off taking it as current wages

    Palmer said that was the reason he stopped Abbott forcing 12% Super through the Senate.

  90. tomix

    It’s all just labour costs. Many employees, particularly lower paid workers, would be better off taking it as current wages

    Palmer said that was the reason he stopped Abbott forcing 12% Super through the Senate.

  91. Vicki

    Vicki is a dishonest LNP troll? I couldn’t have guessed!

    Good heavens! Do you really think so?

    I just called it as I read it.

  92. Entropy

    Vicki, I have to say you read it wrong.

  93. .

    Right Vicki, you just happened to chime in with that LNP nonsense and never discussed the punitive taxes on accrued leave and redundancy on retirement.

  94. Entropy

    What’s the big deal with accrued leave? You just go on leave when you retire for how ever long the leave is worth.

    Oh, you want a lump sum to piss against the wall? Got it.

  95. tomix

    My understanding is that people expect the age pension in return for working 50+ years.

    If that’s not right, then Gov’t needs to declare that there is no entitlement, and make it a political issue, rather than weaseling around, making life easier for the next ALP government.

  96. Fred

    meaning a hike in the GST rate from the current 10 per cent to, say, 15 per cent would add more than $25 billion per year to government revenue, escalating to more than $30 billion per annum within three years – if nothing else changed.

    http://www.abc.net.au/news/2014-10-28/koukoulas-why-is-abbott-considering-a-gst-hike/5845256

    Why not? $30bn for such a small burden is a pretty big pay off.

  97. .

    Entropy
    #1605974, posted on February 17, 2015 at 2:39 pm
    What’s the big deal with accrued leave? You just go on leave when you retire for how ever long the leave is worth.

    Oh, you want a lump sum to piss against the wall? Got it.

    Why are you supporting progressive taxation?

  98. .

    Why not? $30bn for such a small burden is a pretty big pay off.

    Um, because dickhead, we have a spending problem, not a revenue one.

  99. Oh come on

    My understanding is that people expect the age pension in return for working 50+ years.

    If that’s not right, then Gov’t needs to declare that there is no entitlement

    The artless contrarian strikes again. Government doesn’t need to declare anything; there is no entitlement to the age pension based solely around age and/or length of working life. If people expect the age pension in return for working 50+ years, they are wrong to do so.

  100. Entropy

    The people who will be paying for the boomer’s pensions aren’t even born yet. And in addition to that these future taxpayers will also be paying for whatever is expected of government then, as well as the spending for the last forty years that has been funded by past deficits. And there will be proportionality less of them paying taxes compared with pensioners than today.

    Totally doable. Not.

  101. TerjeP

    While we’re on the topic can I suggest that people subscribe to the YouTube channel of the Liberal Democrats.

    https://www.youtube.com/user/LDPAustralia

  102. tomix

    The Howard Gov’t was saying the age pension would be unaffordable by 2015, way back in 1998. And Keating before that.
    Bottom line, they view all money as belonging to them. As in Us vs Them.

  103. Zulu Kilo Two Alpha

    The Howard Gov’t was saying the age pension would be unaffordable by 2015, way back in 1998. And Keating before that.

    I was advised that “by the time you retire there will be no such thing as the old age pension” – in 1978.

  104. struth

    Always a passionate response to this subject.
    A question.
    Who is more socialist in their thinking on this?
    The person who believes governments have wasted billions and billions of dollars that we must still pay the interest on and if not we would have been able to give all our elderly the dignity of a few dollars a week in a way that is deserved for their part in the deal of paying taxes to this nation and being part of the national contract,
    Or,
    Someone like David, who believes in pigeon holing people and boxing them into groups and deciding who is rich, who is not and who should pay.

  105. .

    The person who believes governments have wasted billions and billions of dollars that we must still pay the interest on and if not we would have been able to give all our elderly the dignity of a few dollars a week in a way that is deserved for their part in the deal of paying taxes to this nation and being part of the national contract,

    Clearly they are more socialist. Because you are bullshitting.

  106. struth

    The word “more” is agreed then.

  107. If the government can make you draw down your house, it can also confiscate your super, especially if it GUARANTEES you’ll get the OAP. 🙂
    Remember, a government big enough to give you free stuff is also big enough to take it away from you.

  108. Peter

    One of David’s better efforts, and substantially correct, although as an employer who has to pay into employee super funds, he is either quite wrong about every wage-earner paying into their own super-fund…. or making the point that the mandatory super contribution is actually in lieu of wages and is in essences a tax or forced contribution from your pay-packet. Not very Libertarian.

    If you have an asset that you want to leave to your kids, then the onus is on your kids to make sure that you are supported. Bad choice of language to call them “dependants” when you are on the pension yourself. If you are supporting them, then we are paying you too bloody much!

  109. Peter

    Or,
    Someone like David, who believes in pigeon holing people and boxing them into groups and deciding who is rich, who is not and who should pay.

    I’m no great fan of DL, but your description here does not appear to be entirely honest.

    The argument that I see is that we should be assessing each individual according to their ability to support themselves and only chipping in if they are genuinely unable to do so.

    I do not believe that you have the right to vote yourself access to other people’s wallets, even if you do decide to CLASS them as “rich”.

  110. rickw

    I think there is something more fundamental here, the whole artificial idea of retirement, which in turn helps drive the idea of pension.

    The idea that you should spend the last 20 years of your life doing whatever you want is not realistic or actually good for people.

    – I have seen plenty of people stick out shit jobs because they were going to retire, only to croak almost immediately after retirement.

    – I have seen plenty of people working well past any sort of official retirement age, whilst being productive and having a bloody good time to boot.

  111. Peter

    You have the right to retire if you exercise the responsibility of paying for it.

  112. Combine Dave

    If the government can make you draw down your house, it can also confiscate your super, especially if it GUARANTEES you’ll get the OAP. 🙂
    Remember, a government big enough to give you free stuff is also big enough to take it away from you.

    Best for the government to give minimum welfare to all those who deserve with strict assets tests and lower taxes Than a high taxing gov, where super is directed into renewables/govie projects and everyone gets aa mega pension on retirement.

  113. Employers pay the compulsory super

    Hang on. I understood the Superannuation Levy was collected BY the employer on behalf of the employee losing some degree of pay increases?

  114. notafan

    One thing I noticed in the US was the number of over seventies working.
    The APS has quite a few over 65 year olds.

    The age pension was never intended as a 20 to 30 year taxpayer funded retirement.
    My mother hasn’t worked for a wage since she was 23.
    She happens to get a war widows pension but lots of her friends in similar circumstances get the age pension.
    If they all make 90 that will be 40 years of age pension and no,none of them want to move out of the three (or six, as the case may be) bedroom house because pension.

  115. Entropy

    A question.
    Who is more socialist in their thinking on this?

    Err, the ones expecting regular payments from the government?

  116. tomix

    Hang on. I understood the Superannuation Levy was collected BY the employer on behalf of the employee losing some degree of pay increases?

    It started in 1992 with a 6% national wage rise going straight into compulsory Super. I’d guess that every rise since has been taken into account when the Commission decides on rises to the minimum wage.

    As Palmer said, they steal the low paid workers dosh for 30+ years [not his exact words].

  117. Rich

    The place has either been taken over by Trolls.. or there really is a significant portion of the population that believes that the pension is somehow unique & different from any other form of welfare, and that we are all somehow owed money from the state (ie: other taxpayers).

    Sorry, but there is – why do you think this policy is electoral poison?

    It routinely comes up at work – “they’re trying to make me work longer!” “They’re going to cut the pension!” – they do not take kindly when I ask them why they want to live off government handouts

    And it’s not just labour and the ABC who shill for it – even News will back the little old ladies in mosman

  118. struth

    My point is not about the logic or necessity of pensions, rather than the type of thinking involved in who gets what and who decides.
    It’s a sticky one for all libertarians and it just felt like David was heading toward a socialist thought process basically deciding who is worthy of welfare and who isn’t.
    My main comment would be that it seems people are forgetting the almost criminal behavior of governments that kept many hard working people poor that they now require a pension.
    Please please blame the governments and not the elderly.
    Big government and a small private sector equals the need for pensions.

  119. Entropy

    So… Government needs to be even bigger. Right.

  120. Bons

    Finally, before anyone complains about hypocrisy from a politician, I should point out that the scheme giving retired federal politicians a generous life pension was closed in 2004. New politicians like me contribute to a superannuation fund, the same as everyone else who has a job. And, like everyone else, whether we will need welfare in the form of a pension depends on how much super we manage to save, not how much or how long we have paid tax.
    Um. Disingenuous and untrue. Provide the details of the implementation and metrics of your your pension scheme and your post parliamentary entitlements before you expect the average punter to believe this drivel.
    Polly piddle.

  121. Peter

    Hang on. I understood the Superannuation Levy was collected BY the employer on behalf of the employee losing some degree of pay increases?

    That would be taxation. I am forced to deduct that from the rate (award or negotiated) and remit it to the ATO. I am not paid for my time, nor am I paid for any of my other costs… Which fits the definition of slave labour uncomfortably closely.

    Super is calculated by paying an extra %, not deducting it as is done for tax.
    ……and mostly because the poor little wage-takers cannot be trusted to pay their own.

  122. Peter

    Struth…

    Socialism divides people by class, rather than treating them as I dividus according to their needs,

    You do not refute David’s argument by misscalling it Socialism. Socialism is an actual, well-defined, political philosophy, not an insult-du-jour on the Cat.

  123. Peter

    Oh and BTW. No-one is forcing you to sell your house or to draw down its value. You made that choice of your own free will when you chose to not adequately prepare for retirement.

  124. struth

    No government needs to be smaller.
    A lot smaller.
    I just find this snarping about OAP probably justified if we hadn’t spent the last 50 years in the socialist state of Australia.
    In my life, the sickening waste in welfare that I have seen, which has nothing to do with the elderly is criminal.
    Billions of dollars wssted and I mean billions on 2 percent of the population.
    You know who I mean, as right now homes sre being built, transported to all over Australia, then rebuilt and then pet solar schemes , millions of dollsrs worth for people that don’t know what hot water is for.
    It’s just for drinking when you feel crook from all the taxpayer funded grog you’ve been drinking.
    The great swindle where we all get to pay other people to have and bring up kids.
    And so on and so on.
    And so on and fucking on it goes.
    Then David starts on what might be a valid topic after we fix the other parts of the welfare system and foreign aid and waste waste waste.
    Politically, what is he on?
    I actually want to vote for him but he’s got to put the bong down.

  125. struth

    Peter, socialism varies greatly so to call it well defined, is crazy.
    The morons that follow it argue that fact.
    Loosely, it is the politics of coersion by the state.
    The politics of envy and entitlement.
    The state deciding who gets what and that has varied as to every state that’s tried it in history.
    My point again, how does a true libertarian reconcile with selecting different groups out to get a hand out from taxpayers?

  126. Gab

    Loosely, it is the politics of coersion by the state. The politics of envy and entitlement. The state deciding who gets what and that has varied as to every state that’s tried it in history

    That’s Australia, 2015 to a tee.

  127. Gab

    How about defunding their ABC and using the money instead- i.e. $1.3 billion year on year – to invest for future pensions. I mean each year invest that money instead of giving it to the ABC. Surely that would go some way to preparing for pensions in the future. At least taxpayers would be getting some return on the investment.

  128. struth

    Oh and is it then right that if you have made just enough money in your life to pay off a modest little home and really have nothing left over ,( some here would say that you didn’t plan for retirement) through no fault of your own, you worked hard in the private sector for years, taken no hand outs and paid your taxes,……is it right that you should have to sell your house to go into old age care to live next door to somebody who bludged all their life on benefits, lived in a commision home so gets in free?
    This has happened to people I know.
    I am the first to admit the system is broke, however I’d like to see government fix all its other problems so we can see how much we actually have left over for old age pensions.

  129. Oh come on

    The “I’ve paid taxes all me life!” argument only washes if the person making it will take out less than they put in over their lifetime. The vast majority of OAPs cannot say this. Enough self-righteous proclamations – if you’re taking out more than you put in, you’re a burden on others. You’re a bludger. Nothing more to be said.

  130. struth

    Exactly Gab
    Thank you.
    As I often say…….
    While there is an ABC there is no budget (pension) emergency.

  131. Gab

    I need JC to work out the ROI numbers.

  132. Gab

    Great line, Struth. I’m going to use it.

    While there is an ABC there is no budget (pension) emergency

  133. struth

    Oh come on……..
    Some people drop dead the day they retire.
    Some live 40 more years.
    Think about the fact that Australia takes about half you earn in tax every week, by the time you pay tax on purchases.
    40 odd years of that sort of contributions plus gov not paying for early deaths and quite possibly a generation is putting in enough to cover themselves.
    But my point is the government wastes it elsewhere.
    Get to gov wasre first.
    I personally believe a healthy economy with a small efficient gov and a large healthy private sector and a scheme similar to the states is a good thing, so I am actually of the belief that taxpayer funded retirement is welfare.
    It’s just that I believe that as Australia stands now, it has to be the last expense looked at as it’s too late now.

  134. The eligibility age of 65 was introduced in 1909 when male life expectancy at birth was 55. Now a 65 year old is likely to live to 86.

    Conditional life expectancy increases with age … So the real comparison is what was the life expectancy of a 65 year old in 1909? Further, the 65 year old in 1909 may not have paid the level of income tax now paid. Straight or crooked thinking?

  135. Combine Dave

    How about defunding their ABC and using the money instead- i.e. $1.3 billion year on year – to invest for future pensions. I mean each year invest that money instead of giving it to the ABC. Surely that would go some way to preparing for pensions in the future. At least taxpayers would be getting some return on the investment.

    Why not do that and only allow those who are destitute* to access the OAP?

    * Now that super’s been around for a while.

  136. Tel

    To my fellow mature Australians, I’d like to explain something. We are not entitled to an age pension merely because we have paid taxes all our life. Pensions are not for everyone; fundamentally they are welfare, reserved for the poor.

    David, that might be your picture of entitlements, but we live is a Democracy, and people are entitled to anything that a 51% majority says.

    The family home is the last type of asset you are allowed to own that is protected from taxation, it’s the only type of saving that is not (yet) subject to financial repression. When I say “repression” I mean Capital Gains Tax, I mean legions of useless regulations that create industries of ticket punchers, primarily for the purpose of discouraging thrift.

    The family home (and the mortgage industry) is the foundation of all Australian banking. That may not be a great way to organize things, but it happened and changing it will be difficult. The value of these houses had nothing to do with the intrinsics of building, nor anything to do with scarcity of land… it’s all driven by government manipulation of the markets. That said, people have adjusted to the situation, and they don’t want anyone coming along and messing it all up.

  137. Combine Dave

    Conditional life expectancy increases with age … So the real comparison is what was the life expectancy of a 65 year old in 1909? Further, the 65 year old in 1909 may not have paid the level of income tax now paid. Straight or crooked thinking?

    As pointed out by OCO earlier, what makes you think that the 65 year now hasn’t received* more in benefits than they’ve paid in taxes?

    Or worse, the white elephants they’d voted for the government to spend money on were paid for by their taxes and the taxes of future generations (ie government debt).

    I don’t think the pension should be cut at all, but like most welfare in Australia the eligibility needs to be tightened up to ensure that those who can afford* to, will prepare for their future. – ie; there’s no reason why a multi-million dollar property owner should be treated any different from JC holding multi-million dollars worth of shares.

    If the elderly person in that case wishes to bequest their property to their children before they die, I see no reason why this couldn’t be allowed.

    *The same way the DSP and unemployment benefits etc should only be restricted to the most needy, instead of open slather as appears to be the case now.

    The fact that there are other huge examples of government waste doesn’t excuse bad policy on pensions.

    No matter what you try to cut there will always be a vest interested raising up and shrieking that they’ve been hard done by.

    Which is why Australia will be the next Greece in 10-20 yrs not 30 yrs as I’d originally thought.

  138. Tel

    Someone like David, who believes in pigeon holing people and boxing them into groups and deciding who is rich, who is not and who should pay.

    This is totally wrong, means testing for pensions already exists, David is attempting to remove the special protection that a house gets, as opposed to any other asset. From a logical point of view, David is right, from a political and social point of view Australian people just don’t see it that way.

  139. Token

    From a logical point of view, David is right, from a political and social point of view Australian people just don’t see it that way.

    This is not near the top of the list of critical tax reforms to address the worst inefficiencies in the tax system. It is lazy politics attacking what is perceived to be a soft target.

  140. Token

    Sorry reform of the pension system is important as is changing the perception that every person is “entitled” to a pension, the fact this is the only issue that is discussed is what I find lazy.

    Where are the articles about dealing with the high income moochers of the health and education system? Attacking such people would be attacking the base of the Greens & Labor and address the biggest blow outs in our welfare system.

  141. Fred Lenin.

    An old relative on her 100 th birthday received the usual messages the Queen. The PM and the Premier of Victoria ,the pPremier said” it is Peopke of your generation who made Victoria what it is today”. To which Nana commented,”hope he’s not blaming us for tge mess the politicians have made ” ! A very wise and perceptive Lady .

  142. Combine Dave

    David, that might be your picture of entitlements, but we live is a Democracy, and people are entitled to anything that a 51% majority says.

    Hence the future Greek economic result for Australia and later being conquered militarily by Indonesia 😀

  143. Tapdog

    We are not entitled to an age pension merely because we have paid taxes all our life

    Hard to disagree with that logic but it doesn’t go far enough. The problem for many older Australians is that for decades they ‘paid their taxes’ in a social climate that suggested the community would provide them with pension support if needed.

    But the contemporary narrative has changed, and these very same people (those who led a productive life) are increasingly now told their expectations are ‘unfair’. The ‘unfair’ or ‘unsustainable’ argument has substance but moving the goal posts at the tail end of a person’s working life is perceived by many to be a gross insult and fundamentally ‘un’ Australian.

  144. Token

    The problem for many older Australians is that for decades they ‘paid their taxes’ in a social climate that suggested the community would provide them with pension support if needed.

    How is the culture going to changed when politicians like Weatheral in South Gerrymandia make it clear that the political class is entitled to the type of pension the rest of us mortals could never dream about?

  145. dweezy2176

    If the Senator is serious why didn’t he mention the parliamentary members pensions and how out of step with reality they are? Gotta luv it when a, professional, “trougher” tells the small-folk what they should be entitled too……… never about the “gravy-train” always about the have-nots!

  146. EB

    Posted in the other thread, but thought this was a good laugh.

    Engaging with Uncle Steve is just a matter of putting aside his noxious bluster and working the old boy up. Relaying what a good life you’re leading and how much you’re enjoying lazing around your parents’ house. It takes you back to being 10 again. Don’t forget to remind him it also allowed you to scale back your work hours and pay less tax. Now you don’t have to pay for his health care card and the bit of pension he found out he could get by reading Noel Whittaker.

    Dear Noel, we have 8 million in term deposits, 40 investment properties and 3 million in superannuation. We’re both nearly 65 and wondering how we can structure our assets to get a government pension? P.S. is there any other government money or benefits we can get our hands on?

  147. Up The Workers!

    Well said, Senator!

    And can we rest assured, based on your well-reasoned and principled stand, that you will emphatically reject larding YOUR OWN pocket with any taxpayer-funded Parliamentary Pension or Parliamentary Superannuation when you are eventually given the ‘electoral Blundstone boot’?

    (Or is it only those less wealthy and with less of a sense of ‘entitlement’ than your good self, Senator, who should be denied what you call ‘charity’?)

  148. tgs

    Brilliant article from David L and typical self-interested rent-seeking behavior from the usual suspects here.

    News at 11.

  149. Combine Dave

    We should boss around the subsidy-bludging young for chucking their children in ‘child care.’

    There is no reason why they can’t sell a car and various other assets to finance mum at home.

    Lol. Stick to theology.

    How much is the average used car worth, 15-20k? (Maybe 4-10k if they have an old falcon).

    The cost of daycare would be greater than that over the life of the child.

    The above amount would struggle to cover 1 years worth, not even that if there’s more than 1 kid in care.

    Of course if you were advocating to cut childcare subsidies, pension and welfare eligibility in general and use it to grant the working man massive income tax relief then I’d be all ears.

  150. Richard

    If the good Senator does believe the OAP is not an entitlement, why not support voluntary euthanasia for those who can’t afford to look after themselves (Shades Of Soylent Green). It gets rid of the “deadwood” doesn’t it ?. Why not pay the elderly a pension and then recoup from the sale of any assets once they have passed. Also reintroduce death duties while you are at it.

    The problem for many older Australians is that for decades they ‘paid their taxes’ in a social climate that suggested the community would provide them with pension support if needed. All Govt’s have never seen fit to refute this as they need the OAP vote.

  151. Noosa Bob

    At election time, how about the incumbent government having to balance the books by levying
    it’s members and/or selling it’s assets ?

    This could lead to, GASP!…, truly accountable and responsible government.

  152. struth

    Try to justify it all you like but it is still socialist wealth distribution to give to the poor what you take from the rich.
    Whetber it is right or wrong is not the point I make.
    I make the point that when DL starts talking about means testing…………for hand outs,
    Isn’t he a libertarian purest?
    Is he, after only this short time in parliament starting to get confused?

  153. Alexis

    You are basing this on a statistical fallacy; low life expectancy in 1900 was mostly due to high childhood mortality and infectious disease. In the USA white males at 65 would live until 78 on average, nowadays 65 year olds would expect to live until 83 on average.

  154. Alexis

    Let me put on my asbestos suite and suggest we should abolish the pension for anyone with children and leave the families to sort it out themselves.

  155. ozpol

    You said:
    What Australians have an entitlement to is the assets we own; our houses, our superannuation, our savings.””
    but then you are telling us to take money from “our”house to pay our pension.
    How may regulations we have for “our”Superannuation?
    If savings are ours then why Government is taxing ?
    We don’t have “our” – Government has hands in everything we own.
    Now – do you believe that people who worked whole life and managed to save for future should not get ANYTHING from Government like health support and other benefits?
    Are you saying that someone who never work 1 hour in his/her life should get all Government benefits and person how worked 40 years should not get any?
    It is something wrong with you or with this country.
    See how Europeans are paying people for working life?

  156. julian mclaren

    What annoys me most when people say “they deserve government welfare” is that they don’t comprehend that someone will pay for it – which is their children and grandchildren.
    So we have to raise our children, pay our mortgage and then pay the taxes to fund old people who had their whole life to squander their wealth and not save for a self funded retirement.
    It’s not just the Age Pension, it’s also the self funded retirees paying no tax because of their enormous super balances and then they gleefully take the Commonwealth Seniors Health Care Card.

  157. Fred Lenin.

    Abolish retirement it’s causing the politicians probems ,oh wait ,bring in selective retirement public “servants”. And totally rejected politicians should be allowed to retire on full salary and package agpfter being elected once ,like comrade Lowenstein give Government access to all bank accounts after all. all money belongs to the Government ,reduce taxes on rich people ,public servants and of course all oliticians money is Tax free reduce wages it takes money out of rich people’s bloated bank counts .equity ,yes Equity fr some people that woukd suit dot he hates taxes though his hero Lowenstein is ripping the people off for thousands for talking Sheer Rubbish Self Serving Bastards. The whole political class ,rubbish people .

  158. .

    It started in 1992 with a 6% national wage rise going straight into compulsory Super. I’d guess that every rise since has been taken into account when the Commission decides on rises to the minimum wage.

    Wasn’t it 3% to begin with then upped to 6%? I was too young (and naive) to recall at the time.

  159. .

    struth
    #1606919, posted on February 18, 2015 at 10:44 am
    Try to justify it all you like but it is still socialist wealth distribution to give to the poor what you take from the rich.

    Yep, end income tax and pensions.

    Next.

  160. Zulu Kilo Two Alpha

    It’s not just the Age Pension, it’s also the self funded retirees paying no tax because of their enormous super balances and then they gleefully take the Commonwealth Seniors Health Care Card.

    I’m sorry, I’m becoming a self funded retiree, and to the best of my knowledge, I’m still going to have to pay income tax. Is there something I should know? Oh, and by the way, after paying private health cover, all my working life, if I an eligible for a Senior’s Health Care Card, you bet I’m vooking well taking it.

  161. .

    I’m sorry, I’m becoming a self funded retiree, and to the best of my knowledge, I’m still going to have to pay income tax. Is there something I should know? Oh, and by the way, after paying private health cover, all my working life, if I an eligible for a Senior’s Health Care Card, you bet I’m vooking well taking it.

    Yes. See your accountant/financial adviser.

  162. Dan

    In 2037, the people who will reach retirement will have spent their entire working lives accumulating super, so peg in financial year 2036-37 as the time age pensions will no longer exist. That’s a tick over twenty years for people to sort their shit out.

  163. tomix

    Wasn’t it 3% to begin with then upped to 6%? I was too young (and naive) to recall at the time.
    The Commission awarded a 6% wage rise in 1992. The Keating Gov’t sent it straight to super.
    My guess is that every rise in the Super% would be adjusted for when the minimum wage comes under consideration.
    Iow, as Palmer said, it’s the wage earner’s money, confiscated for 30 odd years.

  164. Fred Lenin

    I reemember when Bob Menzies retired he got tge pension as he said when it was started it was to come from a fund set up by the Government ,and contributed to by Taxpayers. Over the years the contributions were stolen to fund socialist ideas ,and tge contributions absorbed into consolidated revenue .It was originally a sort of National Super Fund before Super was common,the thieving pokiticians soon put a stop to that ,they were the pnly ones who should getSuper,untill Keating inroduced Super for all workers to buy union support for his inept Government .

  165. Fred Lenin

    Lowenstein would no doubt take everything he can get from tge Taxpayer when he is thrown out at the end of his current term.

  166. StraightShooter

    The Senator’s remarks are quite naïve (or perhaps intentionally misleading) and the comments made in response show exactly why changes to pensions need to be discussed with all parts of the community before any changes to the existing system are made. Sooner or later the matter of pensions will impact on every one of us and the concept of fairness depends on where one stands within the argument.

    The good Senator is correct in saying that paying taxes does not, per se, entitle one to a pension. However, this is somewhat of a strawman argument in that it leaves out the circumstances under which so many Australians were given to believe that they would get a pension in return for their labours.

    Since 1908, when they took over from State Government systems, successive Federal governments have made a pact with their constituents that if we pay the taxes that they demand from us they will manage those taxes appropriately for the payment (among other things) of a liveable pension to those who have earned it. During some election cycles the matter of pensions was discussed openly and promised outcomes were explicitly given, but even when pensions were not topical the implicit bargain with government was always there.

    The good Senator would do well to heed the promises of previous administrations and perhaps apologise for government’s inability to fulfil its obligation rather than annoy those who have upheld their end of the bargain and have, indeed, paid their taxes.

    Furthermore, he may consider finding solutions to aid the government in finding a way to fulfil its bargain with the populace.

    The whole question of pension and superannuation benefits, structure and entitlements is a complex issue which desperately needs a holistic analyses that takes into account all aspects, including a re-working of the method age & disability pensions mesh with superannuation and assets, tax benefits, retirement age, life expectancy, capacity to work, medical and hospital systems, population growth, asset appreciation, succession planning etc..

    With the trouble caused by snap policy decisions made in the last budget it would be politically inept of any government to pursue some more of the same, so the wise move now would be to get this topic off the table and setup a committee (bi-partisan or otherwise) to come up with a wide ranging report in the next 6-8 months so that its recommendations can be well debated before the next election. THEN formulate policy and take that to the election.

    In other words, cool things down a bit and perhaps explain to the good Senator that stirring the pot by trying to push an argument that is to the detriment of a conservative government (by giving the opportunity to its enemies to show Liberal meanness) is unhelpful to HIS cause, unhelpful to the conservative electorate, unhelpful to the Liberal government and particularly unhelpful to balancing the budget.

  167. ella

    Very well put, StraightShooter.

    If the government is serious about bringing the DSP applicants into line, it needs to address the starvation payment of $525 a fortnight it allows Newstart applicants.

  168. notafan

    No Australian government has made a pact with taxpayers that if they paid taxes they would get an age pension.
    The 1909 age pension was subject to income and assets tests including the family home and was really a pittance for the indigent poor.
    The family home was later excluded but means testing was always a feature.
    The pension was miserable until the post second world war period when Menzies started to increase it.

  169. Combine Dave

    If the good Senator does believe the OAP is not an entitlement, why not support voluntary euthanasia for those who can’t afford to look after themselves (Shades Of Soylent Green). It gets rid of the “deadwood” doesn’t it ?. Why not pay the elderly a pension and then recoup from the sale of any assets once they have passed. Also reintroduce death duties while you are at it.

    Death duties, forcibly taking assets, high income taxes to pay some bludger’s OAP, is all socialistic theft and should be abolished.

    Everyone has a moral obligation to prepare for ones own retirement whether funded by the sale of real estate or share assets, receipt of super payments or simply cash savings.

    The problem for many older Australians is that for decades they ‘paid their taxes’ in a social climate that suggested the community would provide them with pension support if needed. All Govt’s have never seen fit to refute this as they need the OAP vote.

    That’s true for those currently aged 70 thru 80yrs, not so much the 40,50,60 year olds who plan to blow it all and retire on the OAP.

    Super has been around long enough to replace the OAP for all but the most hard done by.

  170. notafan

    Does anyone know what happened to Keatings proposal to provide pensions as loans repayable from a persons estate for people who failed the asset test put had illiberal assets?
    Not that I support wholeheartedly the including of the family home in the assets test but wouldn’t hecs style pension loans repayable from the estate (or on the sale of the property) be a reasonable option?

    Keatings asset test

  171. tomix

    So, if house prices crashed by 90% tomorrow, Gov’t’s argument would crash with it, unless they are really arguing that they have no obligation to pay anyone a pension.
    If that’s the case why not come out and state that, and see what happens next.

  172. Peter

    If the good Senator does believe the OAP is not an entitlement, why not support voluntary euthanasia

    Because rope is cheap…

    If you REALLY need to kill yourself, the law is not stopping you.

  173. Peter

    So, if house prices crashed by 90% tomorrow, Gov’t’s argument would crash with it

    Nope….
    The argument is that people should support themselves if they have the means. A change in the value of housing does not affect that argument, only the number of people who qualify.

  174. notafan

    The only ones ending up on the pension should be life time welfare recipients.
    Bringing back work houses might prove a disincentive for doing that.

  175. one old bruce

    How does David Leyonhjelm know this? It seems he is only referring to the Paul Keating definition of ‘pension’, a recent innovation. Keating also introduced compulsory ‘superannuation’. Ultimately what is the difference? ‘Super’ is a payroll tax by another name, funding a higher pension. Different from age pension only by degree. Isn’t compulsory super also ‘charity’ by Leyonhjelm’s reckoning? Funded by tax, distributed by government. Two forms of the same thing.

    Blaming the population for loss of value of the dollar is rather low. Shades of inclosure.

  176. Tel

    one old bruce: If you happen to have a contract written by earlier governments guaranteeing you a pension then you might be in with a chance on the “just terms” clause of Section 51(xxxi).

    If you don’t have a contract, I think you get whatever 51% of the voters feel like offering (but don’t worry because David’s voting base is a lot smaller than that).

    Ultimately what is the difference? ‘Super’ is a payroll tax by another name, funding a higher pension.

    Ahh, it is a tax, but they can’t just call it a tax otherwise it would go into consolidated revenue. Strangely enough this was found to be fully constitutional in 2011 despite the obvious sidestep of the intent of having a consolidated revenue. Instead the employer pays to a private fund, under threat of being charged extra tax if they don’t pay… and the payment that looks a bit like a tax isn’t a tax! Lawyers make things happen you know.

    The difference is the private funds, and you do at least get a choice of funds. When the US Social Security goes belly up (and it will) we will see the wisdom of using private funds. The Superannuation concept is stupid, but the Social Security concept is worse.

  177. .

    The whole question of pension and superannuation benefits, structure and entitlements is a complex issue which desperately needs a holistic analyses that takes into account all aspects, including a re-working of the method age & disability pensions mesh with superannuation and assets, tax benefits, retirement age, life expectancy, capacity to work, medical and hospital systems, population growth, asset appreciation, succession planning etc..

    Which is why he made a sly note about paying progressive taxes on retirement.

    If we got rid of progressive taxation, your accumulated leave could perhaps fund your retirement and you would not need a pension. No churn, no vulgar amount of tax paid, no future dependence on taxpayers.

  178. .

    notafan
    #1607243, posted on February 18, 2015 at 5:45 pm
    No Australian government has made a pact with taxpayers that if they paid taxes they would get an age pension.
    The 1909 age pension was subject to income and assets tests including the family home and was really a pittance for the indigent poor.
    The family home was later excluded but means testing was always a feature.
    The pension was miserable until the post second world war period when Menzies started to increase it.

    It was right until Menzies tinkered with it. We don’t want people destitute, but no one owes you a living.

    Quite frankly the indigent would be better looked after by their own families and churches.

    Or, as I point out above, there would be less counted as indigent if they weren’t taxed/compulsory superannuated into poverty in the first instance.

  179. .

    Richard
    #1606896, posted on February 18, 2015 at 10:12 am
    If the good Senator does believe the OAP is not an entitlement, why not support voluntary euthanasia for those who can’t afford to look after themselves (Shades Of Soylent Green). It gets rid of the “deadwood” doesn’t it ?. Why not pay the elderly a pension and then recoup from the sale of any assets once they have passed. Also reintroduce death duties while you are at it.

    What kind of socialist nutter are you? You’re equating the belief in no right to others paying you an income with literally killing people and turning them into food pellets – you hysterical wanker.

    It is also highly dismissive of the elderly. The elderly are more resourceful than you give them credit for. They hold a lot of wealth and have run businesses. They don’t think work or certain jobs are beneath them.

    Maybe you’re just waiting to inherit a harbourside property – because an assets test and 286k threshold in the bank hardly spells destitution.

  180. .

    Alexis
    #1606926, posted on February 18, 2015 at 10:50 am
    Let me put on my asbestos suite and suggest we should abolish the pension for anyone with children and leave the families to sort it out themselves.

    I agree.

    They’d be better off – except the government does all it can to effectively ban granny flats being built, etc.

  181. Combine Dave

    The only ones ending up on the pension should be life time welfare recipients.

    Agreed; with the possible exception of people who are down on their luck later in life – through no fault of their own as opposed to by design.

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