It is an old trick in the neoliberal capitalist handbook for selling austerity to try to gain public support for another cutback by claiming to address “intergenerational inequity”.
First, young people were told they should not think that they are entitled to rights, such as free education, permanent jobs, unemployment benefits and even pensions when they are too ill or old to work.
Now the attack has shifted to the older generation.
In a report titled Age of entitlement: age-based tax breaks, “think tank” the Grattan Institute has called for three tax concessions for older people to be removed. These tax concessions are the Seniors and Pensioners Tax Offset (SAPTO), a higher Medicare levy income threshold and higher private health insurance rebates. These concessions are estimated to be worth $1 billion a year.
And, more than likely, that $1 billion “saving” — if implemented — will go towards the Liberal-National Coalition government’s plan to give a nearly $50 billion in tax cuts to corporations.
If implemented, these cuts would follow a $2.4 billion cut in spending on the age pension made last year by the Malcolm Turnbull government — through tightening the assets test — with the misguided support of the Greens.
The Greens swallowed the argument that the age pension needs to be more tightly restricted to eliminate so-called “middle-class welfare”. But, hardest hit by these cuts are retiring workers who have been urged to save through superannuation to try, mostly unsuccessfully, to fund their own retirement, or to keep working at least part-time after they reach retirement age.
They also put pressure on pensioners and retirees to sell their homes and move into cheaper accommodation and leave the communities where they are established.
In addition, the retirement age, currently 65, will soon be steadily raised to 67 — the Liberals want to raise it to 70 years’ old.
Why not cut the more than $10 billion annual subsidy to large fossil fuel corporation instead of hitting pensioners and retirees yet again?
Why target these minor concessions for pensioners when Superannuation tax concessions — which disproportionately benefit the rich — cost about $39 billion in 2013–14 and are expected to rise to $50.7 billion in 2016–17, overtaking expenditure on the age pension, according to progressive think tank the Australia Institute?
The overwhelming benefit of these superannuation tax concessions goes to the rich. The poorest 60% of income earners get only 27.2% of these tax concessions while the richest 10% get 31.8%.
If the various subsidies and tax concessions now enjoyed by the corporate rich were eliminated that would be more than enough money freed up to fund a universal age pension that guaranteed all retired workers a much higher standard of living. No retired worker would be forced to sell off and leave their homes and the communities in which they are comfortable and an important part.