There’s a rumour going round that a lot of retirees are having to get by on about $270 per week as their base pension. This is an appalling disgrace, which diminishes us all, when you consider that hundreds of harmful, useless, or near-useless government agencies are still in existence and could be dissolved.
But there is a couple of catches here. Suppose if we dissolved very many government agencies and managed to pump retiree incomes up to minimum 400 per week (which would be almost civilized.) Well clearly that would be better than leaving these hateful government agencies in place and these poor old diggers in such squalor, financial stress and social isolation.
But consider what it might do to our willingness to fund our own retirement? And consider what it would do to the governments unfunded liabilities, being as the baby-boom generation is coming up to retirement. So that an act of basic decency (ie dissolving dozens of government agencies and the boosting of retiree incomes) could become an economy-crusher down the track.
So what is Treasury and Wayne Swan suppossed to do?
THEY CAN FIND A BIT OF CREATIVITY IS WHAT THEY CAN DO!!!!!!
There are many ways to handle this problem. This is the rest of the old peoples lives we are talking about. The taxeaters will pick themselves off the ground and get real jobs and within 5 years they will be F.I.N.E fine!!! But in 5 years a lot of these old diggers will be dead. And there will be no chance to keep faith with them then.
The idea is to handle things, as much as possible, by reducing the scope of governmental depredation.
Here are a few ideas for Treasury.
1. They could get rid of the 15% surcharge on salary sacrifice for superannuation contributions. Meaning that a lot more of the older baby-boomers will start providing for their own retirement in a more substantial way.
2. Starting from right away, they can raise the retirment age one day every two. Every two days that passes the age at which you qualify for old-age benefits would increase by one day.
3. They can increase the tax-free- threshold for people of retirement age to 100,000 AUD per year to try and keep a lot more retirement age people working.
4. They can open up an avalaunche of part-time jobs for older blokes. Because most older people are fine to work. Just not at the same level of productivity as a younger bloke and not 40 hours a week.
So to get businesses actually hunting down old people with job offers, they could allow business to DOUBLE-EXPENSE for tax purposes wages given to people of retirement age. Supposing you pay some old bloke to do two eight hour shifts at 12 dollars per hour every week. So every week instead of claiming his labour costs at 192 dollars, you get to reduce your taxable income by 384 dollars. Since the company tax rate is 30% you would have then gotten 16 hours of work out of the old bugger for only $76.80c. An effective cost to the business of only $4.80 per hour. So its cheap labour for the business and a reduction in business tax liabilities. Paid for by dissolving government agencies.
5. They could allow people to register their older relatives as dependents thereby lifting their own tax free threshold up sky-high. Of course this would be done in such a way as not to allow double-dipping.
6. They can get rid of taxes on interest earnings, increasing savings rates more generally, and the incomes of pensioners who have savings stashed away.
When all measures one-through-six are implemented, and the mass-sackings are in train, it would be fully responsible to boost minimum weekly retirement incomes up to $400 dollars. This would be fully responsible from a long-term budgetary point of view.
And though you might boost absolute minimum base pay up to 400 dollars… these measures are actually designed, so as to get a lot of retirees incomes up above 1000 dollars NET!!! per week…….
……AS ANY JUST TREASURY WOULD HAVE IT!!!