Posts Tagged “experience matters”

Date: March 2, 2016 

Jenny Brice

Ageism at work is rife, but fear is stopping people from talking about it.

In the movie Intern, Ben Whittaker (Robert De Niro) takes on a job as a a senior intern at an online fashion site.

In the movie Intern, Ben Whittaker (Robert De Niro) takes on a job as a a senior intern at an online fashion site. Photo: Supplied

Breaking through the glass ceiling is relatively easy. I did it almost 20 years ago.                                                                                                                But no one told me about the glass trapdoor – that was the shock nothing in my                                                                                                             stellar career had prepared me for. At the age of 50 I left a job for family reasons                                                                                                                for a short while, but I faced hurdles when I tried to return to the workforce.                                                                                                                     My corporate stiletto had slipped straight through the glass trapdoor.                                                                                                                                       I simply hadn’t realised that in the modern workplace, 50 is considered old.

This is not a unique story. The tentacles of age discrimination reach into every                                                                                                                 facet of Australian society and nothing we are now doing is working. The government                                                                                               bribing companies to take on older workers by paying $10,000 an older employee has                                                                                                   been a dismal failure. Fewer than 3000 people are involved in a scheme that hoped to attract 32,000.

The government’s intergenerational report makes it clear that older workers must work longer.                                                                                       It is a financial imperative, as it will boost productivity. An extra 3 per cent participation rate in                                                                            workers over 55 is estimated to account for a $33 billion boost to Australia’s gross domestic product.

As an added incentive for older people to continue to work the pension age will go up.                                                                                                  From July 2025, the qualifying age to receive the age pension will continue to increase from                                                                                            67 years, by six months every two years, until it reaches 70 years in July 2035.

The fatal flaw in this grand strategy is that employers are reducing older workers from their                                                                               workforce at alarming rates. Once older workers have left a job, it becomes difficult to re-enter                                                                                      the workforce. If they do, they are often underemployed and unable to maintain their previous standard of living.

To add to the problem the definition of an older worker is getting younger. It appears to be going down in                                                                five-yearly increments. Forget 65 think 50 or even 45. For redundancy purposes if an employee is 45, they                                                                are defined as an older worker. They receive small extra payments for the privilege. They then enter the                                                                 world of unemployment where it takes an average of 72 weeks for them to re-enter the workforce in some capacity.

Workers are becoming so fearful of being classified as old they are spending big dollars on keeping                                                                 themselves looking younger. Research shows that one of the primary reasons women go under the                                                                    surgeon’s knife is to ensure employability in the workforce. As an executive coach and facilitator,                                                                        working in corporate Australia, I am aware of the level of fear. That fear is not only confined                                                                                             to women it just starts earlier for them.

The government has acknowledged employment discrimination may derail its plans. An inquiry, to be                                                                     released in July, has been established to identify what is required to keep older people in the workforce.                                                                  Let’s hope it packs a punch because it will have to be taken seriously if the government wants to deliver                                                                       on any number of economic outcomes.

I agree with Susan Ryan, the Age Discrimination Commissioner, that age discrimination is a social                                                                             and economic issue affecting a growing cohort of men and women. It caught government by surprise.

It is important to dispel the myths: Australians over the age of 50 do want to work. The issue is they                                                                         often cannot get a job after their employment has been terminated. The new jobs they are offered are                                                                       often casual or jobs that no one else wants.

Financial hardship is becoming an inevitable reality for this group of older Australians and it’s                                                                            affecting their health. Worryingly men, who have lost employment between 45 and 65, are one                                                                                       of the largest growing groups of people with mental health issues.

Staggeringly, there are more people over 50 on work-for-the-dole schemes than unemployed                                                                                   people below 22. Even more shocking there are now 210,000 Australians over the age of 50                                                                                         who are living off unemployment benefits. Serious intervention is required if for no other                                                                                        reason than self-interest. No amount of bribery, no amount of Botox, no amount of surgery                                                                                               is going to mask this problem any time soon.

It’s easy for the the government to get the data, change pensions policies and set up an inquiry.                                                                                       It is much more difficult to change a culture. This is challenging in Australia, as ageism in the                                                                                workforce is as rampant as it is silent. Silence can no longer be accepted.

It’s time for governments, employers and Australians to act. Unlike the suffragettes, or powerful images                                                                       of Ruby Bridges, the first black child to attend an all-white school in America, there has been no similar                                                           campaign or strong movement for the greying masses for anything to change.

Given the boost to profits, productivity and reduction on the burden of the aged pension, it is hard                                                                                 to understand why corporate Australia, state and federal governments and the Productivity Commission                                                                     are not rallying in the streets to make this happen.

Jenny Brice is an executive coach and a former HR director for several large Australian companies.

Updated 

The Federal Government has clawed back more than $41 million worth of false claims by private employment agencies in just the past three years.

The agencies are contracted by the Government under a privatised welfare-to-work program called Job Services Australia (JSA), a sprawling $1.3 billion-a-year scheme designed to get the unemployed into work.

A Four Corners investigation has found rorting of the scheme is rampant. Forgery, manipulation of records and the lodgement of inflated claims for fees are widespread.

One former agency employee said he had seen “thousands” of jobseeker records doctored by his agency to support suspect claims against the taxpayer.

Hundreds of thousands of dollars, if not millions of dollars, have been recouped at times by the department.

Rupert Taylor-Price

The managing director of a private employment agency told Four Corners: “There are incentives to be involved in sharp practices from a financial and performance perspective.”

“We had to do the same thing [because] everyone was doing it,” the source said.

“The Government does not want to expose the whole industry.”

Three years ago a top-level inquiry into just one type of fee found spectacular rates of failure, forcing cancellation of that particular fee and prompting industry-wide ructions.

Ominously, the inquiry noted that just 40 per cent of the claims it examined could be confirmed by documentary evidence, or by the testimony of jobseekers and their employers.

The Abbott administration has made some changes to the scheme that take effect mid-way through this year.

But critics say these changes will do little, if anything, to stop widespread gaming of the contract.

In a statement, Jobs Australia said: “A significant portion of the recoveries [were] volunteered by providers who [needed] to rectify minor administrative mistakes.”

But added that “while there [were] legitimate concerns about some aspects of the policies”, more than a quarter of job seekers found a job and exited JSA within three months.

“This is despite the fact that the system is incredibly complex, with a confusing payment model and thousands of pages of rules that must be interpreted and applied by the individual staff who work day in, day out, with people who are unemployed,” the statement said.

The not-for-profit organisation said the new employment services contract would reduce the scope for incorrect claims by simplifying payments.

“With rising unemployment, Jobs Australia believes there needs to be a more flexible arrangement that is firmly focused on getting people back into work – but also with strong checks and balances.”

Only one in 10 enjoy ‘better chance of gaining employment’

The ABC has learned that fraud investigators attached to the Department of Employment have launched probes into many of the major agencies contracted to the program since its inception in 1998.

For-profit companies, including the market leader, Max Employment, have been investigated for particular allegations, as well as well-loved Australian charities including the Salvation Army.

There are a variety of means by which the contract is exploited.

The ABC is not suggesting that any particular agency is engaged in the full range of rorts, or other means by which the contract can be optimised.

But despite a long parade of whistleblowers detailing allegations of the misappropriation of taxpayer funds by some agencies, and highly questionable practices by others, the government has declined to detail instances where it has ever sanctioned any single agency operating under the scheme.

But what the department does is only reclaim those from the failures it finds. So even if you are going to put in claims that have a failure rate, you’re still going to have a lot of them not found and keep the money … there’s still an incentive to make the claim.

Rupert Taylor-Price

In one case to be examined on Four Corners, investigators were forced to shelve their inquiries when they discovered a departmental official had explicitly told the agency that it could still collect fees for services the Government knew had never been delivered.

Rupert Taylor-Price, whose company provides software to Job Services Australia providers, says the scheme is being routinely “optimised” to the detriment of jobseekers.

“Hundreds of thousands of dollars, if not millions of dollars, have been recouped at times by the department,” Mr Taylor-Price said.

“But what the department does is only reclaim those from the failures it finds.

“So even if you are going to put in claims that have a failure rate, you’re still going to have a lot of them not found and keep the money … there’s still an incentive to make the claim.”

He says he believes only one in 10 participants in the program enjoy “a better chance of gaining employment”.

The program was created 17 years ago, when the Howard government effectively privatised the Commonwealth Employment Service (CES).

The new policy created a pseudo-marketplace of jobseekers who were forced under Centrelink’s rules to attend private agencies, which would be paid to find them work.

Since then, more than $18 billion has been spent on the welfare to work program – first labelled Job Network, and now known as Job Services Australia.

It has been a cheaper scheme than the CES, but critics say it has also been far less helpful at assisting long-term unemployed people back into work.

‘You can’t make people search for jobs that aren’t there’

Academics and experts have repeatedly pointed out the glaring paradox at the heart of the program: how can these agencies have any impact on the unemployed when the number of jobless far outstrip the number of job vacancies?

“[The welfare to work program] patently hasn’t worked,” said Professor Bill Mitchell, director of Newcastle University’s Centre of Full Employment and Equity.

“It’s an impossible task … there’s not enough jobs to go around. You can’t make people search for jobs that aren’t there, and that’s the dilemma of the whole system.

“We’ve had a demand-side constraint – not enough jobs – and all this vigorous energy and money being poured into a supply-side initiative as if that’s the problem.”

Periodically, the jobs program has been mired in scandal. A major Productivity Commission inquiry in 2002 made adverse findings about the program, including that the long-term unemployed were being “parked”.

Just three years after Job Network was launched, one prominent job agency was accused of shovelling thousands of people into phoney jobs.

In what has become a pattern, a subsequent inquiry cleared the agency of fraud but demanded the repayment of thousands of dollars.

Insiders have told Four Corners that department managers have been reluctant to tighten up the program’s governing contract to prevent blatant rip-offs.

“It’s absolutely vulnerable to exploitation,” said a former senior departmental investigator.

He said he had significant doubts about the will of successive governments to root out the fraud perpetrated against the contract.

“The department was more interested in getting its money back [than sanctioning agencies] … it’s very politically-driven,” the former investigator said.

The Department of Employment provided figures to Four Corners which showed that millions of dollars are routinely recouped from agencies, as a result of audits, self-identification by agencies and other “program assurance activities”.

In 2011–2012, $8.34 million was recovered.

The figure spiked to $23.81 million the following year after the inquiry into one particular type of fee.

And last year, another $9.12 million was reclaimed.

A department spokesman said typical repayments by agencies amounted to “less than 1 per cent of the amount paid each year”, and said it had “robust systems” to detect inappropriate claims for fees.

He would not answer a series of specific questions about past or current investigations conducted by the department.

“In cases of suspected fraud, matters are referred to agencies such as the Australian Federal Police and Commonwealth Director of Public Prosecutions,” the spokesman said.

“Since 2006 the Department has made 38 referrals to the appropriate authorities.”

Do you know more? Email besser.linton@abc.net.au

Nearly half of Australian jobs are at risk of computerisation and automation, the Federal Government’s latest report on the future of the workforce has found.

In 20 years, you will probably be a casual worker and your office will be shared with strangers — that is if a robot is not doing your job.

Report findings:

  • In the next 20 years, 44 per cent of Australian jobs are at risk of computerisation and automation
  • All industries will be affected by automation
  • More people will work in shared “co-working” spaces
  • There will be even more casualisation of the workforce
  • Careers in the service industry will grow with the ageing population
  • Generation Z will need to be creative and entrepreneurial

Minister for Employment Michaela Cash launched the report in Sydney yesterday, which found 44 per cent of Australian jobs were under threat.

She said it was time to “embrace the change”.

“We can either be dumped off our surfboards into the sea by future waves of innovation, or we can aim to catch the crest of each wave

and surf it into an exciting and prosperous future,” Senator Cash said.

The CSIRO and the Australian Computer Society wrote the report, Tomorrow’s Digitally Enabled Workforce, and one of the paper’s authors — Andrew Johnson, the CEO of the Australian Computer Society — said all industries were going to be affected by automation.

“We have an economy in transition and we need to upskill our current workforce to they can anticipate the jobs of the future,” he said.

The report found there would be more demand for people with science, technology, engineering and mathematics knowledge in future.

They are the sectors with the biggest increases in job numbers and wages.

But the supply of Australian students interested in those subjects is not meeting demand.

“One of the key findings of the report is we need to focus on entrepreneurism, innovation, giving our kids the ability to go and create their own jobs in the future, rather than having the expectation that big business will be there when you leave university or leave school,” Mr Johnson said.

Gen Z encouraged to be creative, entrepreneurial

The report predicted more people would work in shared “co-working” spaces.

It also said there would also be even more casualisation of the workforce.

In the US, a third of people are independent or freelance workers, and the report suggested that trend would be mirrored in Australia.

Andrew Maynard, the director at the Risk Innovation lab Arizona State University, said the report’s findings were nothing new.

“It’s important, but we’ve seen both this trend in an emphasis on innovation and especially an emphasis on digital technologies for some time now,” Mr Maynard said.

“So in the States there’s been a very heavy emphasis there.

Most 15 year olds are going to have up to 17 different jobs in five different industries … and in order to be prepared for that kind of working life … they’re going to need to … have a very broad based, what we describe as enterprising skill set.

Foundation for Young Australians CEO Jan Owens

 

“The World Economic Forum recently focused on what they’re calling the fourth industrial revolution, which captures this, but they’ve been looking at trends in job markets in particular as a result of this changing technology landscape.”

With the growth in the ageing population,

careers in the service industry are expected to grow.

There will be a bigger demand for health care and social assistance jobs, as well as in the education, training and the creative sectors.

Nearly two thirds of Australia will become dependent on the labour force by 2046.

Neer Korn, a social trends researcher, said employers needed to be more open to taking on older workers.

“The older employees that are coming forward, about one in five employees, workers, will be over the age of 65,” he said.

“And the older employees recognise this and they want to remain useful and talented and work, however we’ve got a problem in terms of convincing employers to give them a go.”

As for the kids in Generation Z, those born between 1995 and 2009, the report said they were going to need to be creative and entrepreneurial.

The non-profit group Foundation for Young Australians recently found that 60 per cent of Australian students were training for jobs that would not exist in the future.

Chief executive Jan Owens said there was a disconnect between the skills young people are training for and what the market wants.

“Most 15 year olds are going to have up to 17 different jobs in five different industries,” he said.

“And in order to be prepared for that kind of working life, which is very, very different to their parents or their grandparents, they’re going to need to … have a very broad-based, what we describe as enterprising skill set.”

Age discrimination in the workforce is rampant, says a Gold Coast lawyer.

MATURE age workers are being exploited by unscrupulous Gold Coast business owners in record numbers.

 

According to leading legal figures the number of mature age workers seeking advice over illegal and demeaning treatment at the hands of employers has reached record numbers.

Litigation director with Gold Coast firm Parker Simmonds Solicitors and Lawyers, Bruce Simmonds, said he had at least 20 mature age workers suing their former employers for unfair dismissal.

He said age discrimination in the workforce was as rampant and cruel as ever and he believed the year ahead held no relief for mature age workers who felt they were treated like slaves.

“They are all late 50s or in their 60s, made redundant from previous jobs and needing to stay in the workforce,” he said. “There are agencies that score thousands of dollars in government incentives to place these people in new jobs but too often the new jobs are a nightmare for the worker.”

Mr Simmonds said there were ostensibly respectable Gold Coast companies hiring older workers but privately paying bare minimum wages and imposing unfair working conditions.

“If the worker complains, they are sacked or threatened with the sack, knowing it can be hard for older workers to find a new job,” he said.

“Intimidation is used to silence them. Older workers are the people with the least rights in the workforce and generally the unions can’t or won’t do anything to help them.

“Part of the problem is the mindset of younger bosses who can’t relate to older workers or have no respect for them.”

Many younger bosses can’t relate to older workers.
Mature age workers can be a golden asset for an employer.

Mr Simmonds said distressed clients stated they were often treated with disrespect by younger bosses, treated like idiots or given menial tasks either to persuade them to resign or because the boss did not trust them with more responsibility.

“It’s tragic because mature age workers can be a golden asset for an employer. They have a long-term work ethic, tremendous workplace experience and a professional attitude to their job. They could teach their bosses a thing or two about personnel management.”

Mr Simmonds expects the problem to get worse as an ageing population is forced to work longer before pension age.

Manny Palma, of the Gold Coast Community Legal Centre, said his organisation was seeing the same issue.

“We identified it to be such an issue we put our hands up for extra funding for a specialist employment position,” he said.

“It is a burgeoning area and, while we missed out on funding for a fulltime position, we still have one lawyer who basically does 80 per cent employment law.”

Mr Palma said the centre had easily a 30-40 per cent increase in the numbers of mature age workers seeking advice: “We have a lot of mature age workers being turfed out of jobs with their positions ostensibly being made redundant but then the position is readvertised with a different title but the same duties.”

Source:  Gold Coast Sun

Our TV production company, based in Melbourne, is currently researching the area of baby boomers / seniors employment to assist us in a TV series we are looking at producing.

 

I am looking for personal stories to help demonstrate the success and also personal struggles when it comes to +50s gaining employment.

  • Have you re-trained in a new industry?
  • Are you a fish out of water, where you have been employed by a youthful company or brand specifically because of your expertise/experience?
  • Have found a new lease on life because of your new found employment?
  • Are you simply ‘bored’ in retirement and seeking work for something to do?
  • Or is going back to work after retirement an economic/personal choice?

 

I’m looking for a diverse range of interesting stories and takes. If you would like to get in touch to share your experiences or simply find out more, I would like to hear from you:

Email Pennie: pennie.brown@matchboxpictures.com.au

 

 

 

From: ABC Open

Hi,

I work at ABC Open, the part of the ABC where people can share their own stories.

I thought you might be connected with people who would be interested in sharing their stories about retirement (and not retiring)

We are running a project about retirement where people write 300-700 words on their experience. It runs until Feb 22. Here is the info:

Retirement: how is it looking for you?
Many Australians feel the goalposts for retirement are moving. Are you enjoying the retirement lifestyle you’d hoped for? Or do you think you will never be able to stop working? Tell us about your experience.

The website is: https://open.abc.net.au/explore?projectId=108&sortBy=publishedDate&isFeatured=0

Could you share this information onto your networks?

One-third of Australian pensioners live in poverty, according to a report by the OECD, Photo: Greg Newington

More than one-third of Australian pensioners are living below the poverty line, making the country among the worst performers in the world for the financial security of older people.

The findings of the OECD report, Pensions at a Glance 2015, compared Australia to 33 other countries.

Australia was ranked second lowest on social equity, with 36 per cent of pensioners living below the poverty line, which the report defined as half the relevant country’s median household income.

Australian pensioners fared better than their counterparts in South Korea, where 50 per cent live below the poverty line but performed poorly against the OECD average of 12.6 per cent.

The report, released last month, found the Australian government contributes less to old-age benefits than other OECD countries. The Australian government spends 3.5 per cent of GDP on the pension, below the OECD average of 7.9 per cent.

The findings are backed up by the Global Age Watch Index 2015 report card which rates countries by how well their older populations are faring.

It ranked Australia lowest in its region on income security, due to the high rate of old age poverty and pension coverage which is below the regional average.

Paul Versteege​, senior research and advocacy adviser with the Combined Pensioner and Superannuants Association, said the base Australian pension rate was low compared to median household incomes.

“There are huge discrepancies among retirees in various countries,” he said.

“In Australia there is quite a large group that has to subsist on the age pension as its only source of income. In spite of pension reform and recent increases to the pension, the base pension is still quite low for singles.”

The annual payment for a single person is about $22,000 and $34,000 for a couple, with 2.25 million Australians claiming the pension.

Council on the Ageing chief executive Ian Yates said the report challenged perceptions that the entitlement was too high.

“Claims that the age pension is somehow too extravagant and unsustainable do not bear out,” he said.

“We have always argued for progressive improvements to the pension but at the moment an increase to the pension is highly unlikely and more focus ought to go towards building superannuation contributions.”

Chief executive of Vision Super Stephen Rowe said he was “staggered” by the findings of the OECD report, saying it painted a bleak picture for many older Australians.

“Are we generous enough with the pension? I don’t think so.”

He said that Australians retiring now have not received the full benefit of compulsory superannuation contributions, introduced in 1992, but were grappling with rising living costs.

“The basic cost of living in Australia is quite high, compared with  some other OECD countries,” Mr Rowe said.

Chief executive of National Seniors Michael O’Neill said the pension had gone backwards in real terms and many older people had not accumulated enough superannuation to supplement the benefit.

“In terms of sustainability, the report confirms that Australia spends substantially less than the OECD average on pensions,” he said.

“In fact, our pension spend has dropped and plateaued since 2000. Against other countries, our proportion of pensioners living below the poverty line is startling.”

Source: TheAge

MRAEL Group is one of the three Australian Apprenticeship Support Network Providers chosen to offer the Skills Checkpoint for Older Workers Program.

The Australian Government initiative is a free career advisory service offered to employed individuals aged 45 to 54 years. The service will assess where individuals are in their careers and offer guidance if a change in career direction is needed or desired.

MRAEL Chief Operating Officer, Christine Zechowski said the service will operate for six months.

“MRAEL is very excited to be one of only three Providers in Australia to be able to deliver Skills Checkpoint Pilot services.

“We will be delivering the free service across Queensland, including in metropolitan, regional and remote areas of the State,” Ms. Zechowski said.

The Skills Checkpoint for Older Workers Pilot is designed to provide eligible individuals with an understanding of their existing skills and experience, determine suitable training and employment pathways and provide advice and assistance in planning the next phases of their career.

“The objective of the program is that eligible participants can access detailed skills analysis and career advice which will assist them to identify suitable new career pathways that are matched to their developed skills and experience,” said Ms Zechowski.

Skills Checkpoint services will also provide participants with advice about employment growth sectors, information about where jobs are located in local regions and the specific skills and credentials required to secure those positions.

“Queensland has a positive employment growth forecast for the five years through to November 2019, with an additional 244,000 jobs expected to be created. With such positive growth in the employment market expected, now is the time to support individuals to plan the next stage of their career to ensure that they are prepared to meet the needs of the evolving labour market across the State,” said Ms Zechowski.

Employed individuals aged between 45-54 years old interested in finding out more about the Skills Checkpoint Pilot Program, including whether or not they are eligible to participate, can contact MRAEL on 1300 4 MRAEL (1300 467 235) or visithere.

Source:  Gladstone Observer

The closer we get to taxing superannuation properly the more we are going to hear about how important it is and how much we are going need to live on in retirement. Don’t believe it. It’s almost all propaganda, almost all paid for with money taken out of our superannuation accounts.

The latest scary figure, produced by the Association of Superannuation Funds, is $58,784 per year. That’s how much it says a 65-year-old couple needs to live on in order to enjoy a “comfortable” retirement.

At the risk of stating the obvious, after tax and rent or mortgage payments most working Australians couldn’t afford such comfort.

It’s absurdly high. The fine print shows such a couple would spend $40 a week on alcohol, $80 a week on dining out, almost $200 a week on food and groceries, $136 a month on the phone and internet, $4000 a year on holidays within Australia, and $14,000 every five years on a holiday abroad.

The Association of Superannuation Funds estimate of how much a 65-year-old couple need to live is absurdly high. Illustration: John ShakespeareThe Association of Superannuation Funds estimate of how much a 65-year-old couple need to live is absurdly high. Illustration: John Shakespeare Photo: Illo:Shakespeare

Plus this: the best part of $250 a month on new clothes and shoes, $80 a month on hairdressing, $54 a month on pest control and/or an alarm service, and $350 a month on private health insurance.

At the risk of stating the obvious, after tax and rent or mortgage payments most working Australians couldn’t afford such comfort. How did such a figure come to be defined as the gold standard used to justify steady increases in compulsory super contributions and to attack plans to tax them properly?

Part of the answer is that the super industry really doesn’t care about the living standards of Australians who are working or about the extra tax they have to pay because super funds aren’t. Its chief concern is the $2 trillion in funds it has amassed to date, and the tens of billions of dollars of it that stick to its fingers each year in management fees.

Its so-called “comfortable” retirement standard was originally called “comfortably affluent but sustainable”. That’s right, the word “affluent” got edited out along the way. The University of NSW team that built it never intended it to apply to the bulk of retirees. For them they created a second standard, “one which affords full opportunity to participate in contemporary Australian society and the basic options it offers”. They labelled it “modest but adequate“.

The word “adequate” has also disappeared along the way, leaving the false impression that what’s affluent is normal and that anything else isn’t adequate.

It’s needlessly scaring us. A new survey by State Street Global Advisors finds that before retirement most Australians believe they won’t have enough to live on, but that after retirement most are happy: two-thirds say their standard of living is no worse and a significant minority say it is better.

The truth is that living costs plummet on retirement. Most retirees no longer face a mortgage, a saving of 30 per cent. Most no longer pay tax, no longer have children living at home, and no longer habitually save up to 10 per cent of each pay packet. They also no longer incur the substantial costs of heading out of home and going to work: petrol, parking, work clothes and the temptations of the office cafeteria. And they have more time to shop and cook, meaning they get better value and pay less for food. So comfortable are retirees spending far less than the industry says they need to, that most actually save.

In his earlier incarnation as social services minister Scott Morrison revealed that in their first five years in retirement 57 per cent of pensioners either build up their savings or keep them steady.

In their last five years 67 per cent do so. A Productivity Commission survey released last week finds that only 5 per cent of retirees stop saving when their income drops on retirement. But outrageously inflating the cost of living for retirees is only the first of the industry’s tricks. The second is to imply that all of it has to come from super.

The astonishing truth, outlined by Morrison in a speech as Treasurer last month, is that super accounts for only 15 per cent of the assets of Australians over the age of 65, and only 20 per cent of their income.

As the Grattan Institute put it in a recent report: superannuation is the least important part of the retirement incomes system. Retirees have much more invested in real estate than super, and “at all ages, incomes and wealth” more invested in other financial instruments than in superannuation.

“It is unreasonable to expect superannuation savings alone to fund a comfortable living standard in retirement,” the institute says. It follows that it is unreasonable to believe that the super system needs to grow or stay as it is in order to provide decent retirements. Labor is blind to evidence when it comes to superannuation.

In thrall to the legend of Paul Keating and the myths propagated by the industry he helped create, it wants to lift compulsory contributions from 9.5 per cent of salaries to 12 per cent. Morrison is more clear-eyed.

Some retirees are genuinely poor. They are the ones paying rent. The Productivity Commission says they typically have to dole out $240 a week and are vulnerable to eviction. Shamefully, when Kevin Rudd lifted the age pension in 2009 he all but ignored the finding from his pension review that rent assistance was far too low. It remains unindexed at $120 a fortnight.

There may well be other Australians for whom retirement is uncomfortable, notwithstanding the pension of $20,498 for singles and $30,903 for couples. But for most it’s OK, no worse than working. There’s no need to hand a $2 trillion industry tax concessions in order to help them.

Peter Martin is economics editor of The Age.

Source: Theage.com.au

Association of Superannuation Funds boss Pauline Vamos wants at least a three-year lead time for major changes to super or pension policies.

Association of Superannuation Funds boss Pauline Vamos wants at least a three-year lead time for major changes to super or pension policies. Photo: Jeremy Veitch

Treasurer Scott Morrison has put ordinary Australian workers on notice that they should no longer expect to receive an age pension from the government when they retire.

Meanwhile, the very wealthy have been warned generous superannuation tax breaks are set to be reined in.

In a wide-ranging speech on Friday, Mr Morrison outlined the government’s vision for an overhaul of the country’s retirement income system designed to ease pressure on future federal budgets: by both reducing expenditure on welfare payments, and limiting the amount of revenue forgone through tax concessions.

The government plans to consult more widely on possible changes next year.The government plans to consult more widely on possible changes next year. Photo: Virginia Star

The Treasurer said government would act next year to alter the Superannuation Act to clarify that the purpose of the country’s compulsory savings system was to enable most Australians to enjoy the “worthy prize” of an “independent retirement”.

“Becoming a self-funded retiree, I think, is one of the most important objectives of any Australian … it means you have choices and control over your life and your care,” Mr Morrison said.

Currently most people can expect to receive at least a part age pension payment from the government when they retire, with their super savings providing a top-up.

Treasurer Scott Morrison outlined the government's vision for an overhaul of the country's retirement income system.Treasurer Scott Morrison outlined the government’s vision for an overhaul of the country’s retirement income system. Photo: Alex Ellinghausen

But the age pension should not be regarded as an entitlement for all, but rather a “welfare payment for those who do not have the ability to save enough to fund their own retirement”, Mr Morrison said.

More than twenty years since compulsory superannuation was introduced the system is not yet efficient enough at meeting its objective to “supplement or replace” the age pension, he said.

Mr Morrison said the age pension should remain “as a safety net”, and that people who take time out of the workforce to raise children or perform carers duties should not be left behind.

Opposition spokesman for financial services and superannuation Jim Chalmers wants a low income superannuation contribution retained.Opposition spokesman for financial services and superannuation Jim Chalmers wants a low income superannuation contribution retained. Photo: Glenn Hunt

Enshrining a definition of the purpose of superannuation in law, to better focus future policy changes,was a key recommendation of last year’s financial system inquiry led by former Commonwealth Bank boss David Murray.

The inquiry found that 10 per cent of Australians receive 38 per cent of super tax concessions, more than the combined benefit to the bottom 70 per cent of Australians.

Crackdown on super tax cuts for richest

Mr Morrison also said on Friday that the richest Australians will have to help pay for a better superannuation system as he flagged the government will limit tax breaks on very high balances.

“Super was never designed to be an open-ended vehicle for wealth creation.”

He floated the idea of placing a limit on how much money people can put into super at the discounted tax rate of 15 per cent.

Mr Morrison also pointed to Mercer research that suggests the super tax concessions should designed to enable an income in retirement of 70 per cent of pre-retirement earnings. Opening the door to limiting tax concessions on super has drawn criticism from lobby groups for self-funded retirees.

The move represents a major u-turn, under Prime Minister Malcolm Turnbull, on a core policy promise made by his predecessor Tony Abbott and his cabinet.

Mr Abbott, his former treasurer Joe Hockey, and former assistant treasurer Josh Frydenberg all repeatedly pledged earlier this year “no unexpected or adverse changes to super taxes”.

Mr Morrison downplayed the backflip.

Perception of fairness politically important

“A number of the changes [to super laws] that occurred under the last [Labor] government were egregious, and undermined stability and certainty in the system, and that is why we, in this term of government, have been so hesitant about making any changes in this term,” he said.

Mr Morrison said retirees, and older workers approaching retirement, deserved stability and certainty.

“And yet we must also balance that right with the goal of shaping the superannuation system so it provides opportunity for more Australians, because until tax concessions in the super system are perceived to strike the right balance of fairness there will continue to be calls for more tinkering and changes”.

The Treasurer made the comments during a speech to the Association of Superannuation Funds of Australia (ASFA) conference in Brisbane on Friday.

ASFA chief executive Pauline Vamos said she supported the idea of restraining access to super tax concessions for the most wealthy and developing policies to encourage more people to save towards a self-funded retirement.

“At the one end of the spectrum super should not be treated as a wealth creation and estate planning vehicle, while at the other we must have a social safety net for the most vulnerable”.

Ms Vamos said the government should provide at least three years notice of any future changes to the rules to allow people time to plan, and that special allowances may need to be made for those already in or closely approaching retirement.

ASFA has called for a lifetime cap of $2.5 million on the amount of money people can accumulate through super.

“While limiting the tax concessions on those very high super balances would only affect about 70,000 people today and not ring in a huge amount of revenue for the government in the short term it would set us up for a fairer and more sustainable system over the next 20 to 40 years,” Ms Vamos said.

Criticism from Labor

Other groups have called for much lower caps.

The Grattan Institute this week proposed limiting pre-tax annual contributions to superannuation accounts at $11,000 per person and taxing investment earnings in retirement, drawing the ire of the self-managed super industry.

Earlier this month Deloitte called for the government to scrap annual limits on how much money workers can tip into their super at the reduced tax rate of 15 per cent in favour of a lifetime concessional contributions cap of $580,000.

On Friday Mr Morrison said there “needs to be more flexibility” in the rules to allow people, especially women, with broken work patterns to catch up – indicating the government is open to scrapping annual caps on contributions.

The government plans to consult more widely on possible changes next year.

Opposition spokesman for Financial Services and Superannuation Jim Chalmers accused the government of peddling a rhetoric of wanting to improve retirement outcomes for ordinary workers, while simultaneously pushing ahead with previously-announced policies that would make leave them worse off.

“While it was good to hear Mr Morrison talking about improving the adequacy of superannuation system, all he offered were thought bubbles,” Mr Chalmers said.

“Meanwhile the government is pushing ahead with plans to abolish the low income contribution scheme by 2017, it is stalling on raising the super guarantee, and has laws before the parliament to weaken penalties for employers who do not comply with their obligations to pay workers’ super.”

Labor’s plan is to introduce a 15 per cent tax on earnings from super in retirement, which are currently tax-exempt, once a person has drawn more than $75,000 a year.

Source: The Sydney Morning Herald