Axe pension; don't raise it

It's pretty well known that the pension is $273. But what's not often discussed is that this pension was always intended as income supplementation; not as income to live solely off.

Raising the pension is a terrible idea, for one main reason: we have an ageing population. Consider these statistics:

  • Today, we have a ratio of around 6 taxpayers per pensioner
  • In 2025, we'll have a ratio of around 3.7 taxpayers per pensioner
  • By 2050, that ratio will drop to 2.0 taxpayers per pensioner.

That means that, even if the pension isn't raised, by 2050, $137 of the tax you pay per week is going solely to supporting a pensioner. That doesn't leave much money to run the country on.

The pension should be phased out; not raised. It's clearly unsustainable, and places an enormous burden on younger generations to support extravagant baby boomers with no savings capacity.


Submitted by Joelith on Tue 23/09/2008 - 12:20

Except that superannuation will be considered income when you retire. So when we retire we won't be eligible for the pension at all. Given that many people of retirement age today did not have compulsory super they will be eligible for the pension as they did not have the super payments that we get. So for them it is not income supplementation, it's their only income.

The argument for raising the pension is simply to bring it back in line with inflation. The payments aren't indexed so these people are having to spend less and less. A bit of a beat up here Peter!