The prospect for genuine reform of Australia’s inequitable retirement system is drawing closer, with the Abbott Government reportedly close to striking a deal with The Greens to slash pension payments to the wealthy in return for unwinding superannuation concessions. From The Australian:
Agreement on pension reform is within reach as the federal government negotiates an $8 billion saving that is gaining qualified support from the Greens…
The Greens are willing to consider voting for the new savings proposal as the first stage of a wider reform to retirement incomes that will throw the spotlight on generous tax breaks on superannuation…
While the government is open to a broad review of pensions and super, Social Services Minister Scott Morrison is canvassing an initial saving by reversing the 2006 decision to change the pension taper rate from $3 to $1.50 — effectively giving wealthier retirees bigger part-pensions…
The changes would reduce the part-pension for some of the 420,000 people who exceed the pension assets threshold but it would have no impact on more than 2 million people receiving the full pension and it would exclude the family home from any change in treatment.
As noted yesterday, it was former Treasurer, Peter Costello, that relaxed the assets test for the Aged Pension in 2006 – a move that now costs the Budget a whopping $8 billion. Labor supported the move at the time, however, the Greens were strongly opposed, noting that it would do nothing to improve the position of poorer pensioners, whilst costing the Budget.
Thankfully, the Coalition seems to acknowledge the error in their ways, and are reversing track.
