WHILE seniors' lobby groups have generally agreed the federal budget delivered in May was far from the "baby boomer's budget" touted by the government, an Australian thinktank begs to differ.
The ARC Centre of Excellence in Population Ageing Research (CEPAR) says that while the measures announced do not go far enough "in all cases they are moving the policy structures around older people in the right direction".
Centre director, Scientia Professor John Piggott, said the major budget initiatives in the ageing domain could be categorised into three broad groupings:
- The mature workforce: older workers and the "just retired"
- Superannuation and retirement incomes
- Late life: what happens when aged care facilities become a reality in the life course.
Scientia Professor Piggott said the important measures for the mature workforce were an extension of the earned income threshold in the age pension means test, and developments in lifelong learning.
"Both are critical in enhancing mature age labour force participation," he said.
"The Australian Treasury has estimated that a five percentage point increase in the labour force participation rate of those aged 55-64 would generate an increase in GDP of 2.9 per cent annually by 2050 - a valuable contribution to growth in an era when Australia and many of its trading partners will be facing the headwinds of population ageing.
"And it also means individuals will have more resources at their disposal when they do withdraw from the labour force."
Scientia Professor Piggott said CEPAR was undertaking research on organisations and the mature workforce, focusing on enabling increased labour force participation by investigating what kinds of job redesign might facilitate and encourage prolonged time in the workforce.
He identified the important measures in the area of superannuation and retirement incomes as post-retirement contributions to superannuation; expansion of the pension loan scheme; changes to the means testing of pooled retirement income products; and requiring superannuation funds to develop retirement income strategies for members.
"All these measures have the potential to contribute to a change in what economists call 'framing': from an asset frame to a consumption frame," Scientia Professor Piggott said.
"This is an important difference between the Australian system and comparable retirement income systems elsewhere, for example, the Netherlands, Switzerland and Chile.
"Thinking about retirement saving in terms of what it will provide in terms of consumption emphasises the primary purpose of superannuation, and will provide a better framework for decision-making by workers and retirees in the future."
Scientia Professor Piggott said while Australia already had about $2.5 trillion in super funds under management, by 2040 this is estimated to reach $13 trillion - "so it's important to have the right framework in place".
"Overall, there is still a major need to give retirement incomes in Australia systematic attention, possibly in the form of a review or inquiry."
In financial terms, Scientia Professor Piggott said late life was probably the most substantial item.
"The budget made provision for financing much-needed aged care facilities, both in-home and residential support.
"Again, they don't go far enough; but they do go in the right direction."
