It seems like the Labour Party has fallen prey to the baby boomers’ panic over national superannuation with its announcement that it will raise the age of entitlement for superannuation to 67 years.
Baby boomers are now staring old age in the face, and with it loss of earnings from paid work, disability, and eventually the need to be taken care of – but by whom? Until the early 1980’s the top marginal tax rate was over 60%. It is now 33% and still the wealthy complain.
For a generation that – although given free education, affordable housing, and access to any number of good well paid jobs when they were starting out – thumbed their noses at the common good; for a generation that despised progressive taxation, or any taxation for that matter, the chickens are coming home to roost. There is not enough money coming into the collective pot, just when they are likely to need to dip into it.
Hence political parties of every persuasion are flailing around trying to find ways to pay for baby boomers to have a dignified and comfortable old age, something everyone of any generation is entitled to. What they have come up with so far is unlikely to achieve this.
Raising the retirement age simply penalizes the lowest paid workers yet again. They are most likely to be in physically demanding jobs that cannot be done by people in their late sixties. And they will end up on some sort of benefit anyway, so little money will be saved.
The national superannuation fund will never fully fund superannuation. At best the interest will be used to top up superannuation. In the meantime, money is being taken out of the economy that could be used to provide the likes of free doctors visits and prescriptions, free education, and affordable housing. Much of it is invested offshore, not necessarily in ethical or sustainable investments.
There is only one way to fund a comprehensive superannuation scheme; that is through a pay as you go, comprehensive progressive taxation system. The Alliance Party has been saying this since 1991. It is time people listened.