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The Government’s decision to delay increases in the superannuation guarantee might be just the first salvo against workers, warns Bill Watson.

Clive Palmer

Superannuation remains the plaything of politicians.

Superannuation remains the plaything of politicians and there’s no sign that this will change in future.

The latest evidence is the deal between the Federal Government and the Palmer United Party to delay the 12 per cent target for superannuation contributions for seven years to 2025.

• Keating lashes Abbott over super
• Tax axed ‘for the nation’

It reminds Australian workers and retirees that, even three decades after the introduction of occupational superannuation, they have no certainty or security over their retirement savings.

Worryingly, there are more signs that it will become even harder for workers to get their hands on their super.

Money superannuation

The recently announced increase of retirement age to 70 for workers born after 1965 gives Australia the world’s highest official retirement age.

It is hard to envisage Canberra, in future, not increasing the age at which workers can access their super. Currently, workers can retire once they’ve reached preservation age, receiving their super tax free in an allocated pension or for most workers a tax free, lump sum.

You can almost hear the Treasurer saying, “we’ve got a mismatch here – the retirement age is 70 but the preservation age for super is 60 – so today to protect the Budget, I’m announcing an increase in preservation age to 70.”

For many workers in physically demanding occupations, being able to work to 70 is just not possible and many unemployed people over 50 know that the jobs just aren’t there.

Increasing the preservation age is just not fair. All it will do, is force workers onto social security until they reach retirement age.

Even more worrying is the kite-flying by the Financial Services Council. The FSC represents banks and the profit superannuation sector and is encouraging a debate about denying workers from taking their lump sums upon retirement and instead forcing them to take a pension.

This debate provides Canberra with an opportunity to force workers to take a pension rather than a lump sum, again with the rationale of protecting the Budget and delivering a win to Australia’s banking sector.

Denying retirees the option of a lump sum and forcing them into pension or annuity products better serves banks than the interests of working people, as banks would be guaranteed an annuity-like income from people’s retirement savings.

Banks – through their distribution networks, conflicted remuneration arrangements and sale of products disguised as financial advice – have been very successful in attracting a disproportionate share of people’s retirement savings.

You have to ask, why should retirees have their income managed by those who have failed to demonstrate that they are able act in their clients’ and customers’ best interests?

There are currently very real tax incentives to encourage people to keep their retirement savings within the system.

Many superannuation fund members did not have the privilege of a university education, or the ability to amass significant retirement savings.

Proposals to force workers to take lump sums is tantamount to income management. It does not consider the implications for retirees – particularly those on lower than average incomes prior to retirement.

What we know is that many of our members don’t have the spare cash to prepare for retirement by paying down debts, repairing their houses and acquiring replacement white goods and cars. Accessing their super on retirement to do these things allows for a comfortable retirement.

The myth that working people waste their super on luxuries such as trips and boats is just that. There is no evidence to support this claim.

If Canberra wants to protect the Budget then meaningful reforms to the retirement system to sustain the tax base would include:

• Eliminating concessional treatment of superannuation contributions for people who have more than seven times the annual non-concessional contribution amount (presently $180,000) in their superannuation

• Taxing earnings on retirement accounts for any earnings on superannuation balances above this seven times amount

What Canberra should not do is force workers to wait until they are 70 to get their super and then only get it in the form of a pension.

Bill Watson is Chief Executive Officer of First Super, which is a shareholder in The New Daily

 The Drum, 2 Septembert 2014

Emily Millane, Research Fellow
The Drum Unleashed, 2 September 2014

Our retirement income system is now skewed so heavily towards the wealthy in our society that we’re not just at risk of going nowhere, we risk going backwards, writes Emily Millane.It’s always slightly unnerving when the airline you’re flying with says it needs to take some time to redistribute the weight on the aircraft before you take off. Visions of a plane dragging one wing along the runway with sparks flying everywhere tend to ensue.

The fact is, the distribution of an aircraft’s weight needs to be calibrated in such a way that the thing can get off the ground, and back onto it, safely. And so it is with our tax and transfer system.

Distribute it right and you’re off; get the distribution wrong and society is on a fast track to nowhere.

Per Capita’s recent report, The Entitlement of Age, argues that, together, increasing longevity and rising inequality are making Australia’s retirement income system unsustainable. The structure of the system, combined with the distribution of benefits, is skewed so heavily towards the wealthy in our society that we’re not just at risk of going nowhere, we risk going backwards.

Notwithstanding differences as a result of race, education and socio-economic status, on average Australians have very high life expectancies. Indigenous Australians are the notable exception to this average

Per Capita’s findings show that we are living longer than previously estimated, largely as a result of declining mortality rates. We need to plan for longer lives, and we need incomes to pay for them.

The current system will not deliver retirement security, even if Australians work until they are 70. Some Australians will move into older age well funded but women, the low-paid and those in insecure work will not.

Per Capita’s research, using four different scenarios, shows that a woman retiring in 2049 who has children and works a mix of full-time and part-time hours will have only 60 per cent of the superannuation balance of a man the same age as her, a deficit of $358,000.

The way in which superannuation is taxed compounds the income insecurity faced by vulnerable groups. The concessional rate of tax on superannuation income relative to ordinary income, known as “superannuation tax concessions”, favours those with higher incomes.

If the Government is successful in removing the Low Income Superannuation Contribution, people on low incomes will pay more on their superannuation contributions than they do on ordinary income.

More than 50 per cent of the superannuation tax concessions go to the wealthiest 20 per cent Australians. At the same time, Per Capita’s annual tax survey showed that 42 per cent of people on incomes of $200,000 and above consider that the best way to pay for longer lives is through further superannuation tax concessions.

As detailed by the ACTU recently, the IMF has found that Australia foregoes more through tax expenditures than all other advanced economies it analysed. The largest areas of expenditure are housing and superannuation tax concessions.

What does all of this tell us? It tells us that people on the highest incomes have come to see the beneficial tax treatment of their superannuation as an entitlement. It tells us that any effort to change the shape of tax on superannuation to make it fairer will require political courage. It also tells us that change is necessary.

The Government’s proposed alterations to the age pension, particularly in respect of indexation, will mean that it does not provide a safety net from poverty. It is those same groups that are disadvantaged by the superannuation system that will face further financial precariousness as a result of these changes – the women, the low-paid and those engaged in insecure work.

Australia’s spending on the age pension is going up; no one is arguing with that. However, as the Treasurer found out with his comments in respect of the fuel excise, it’s the proportion of income that matters. Australia spends about 3.5 per cent of its GDP on the age pension compared with an average spend by other wealthy counties of 7.8 per cent of GDP.

So what of it? What does it matter that some people will have overseas holidays and theatre shows to look forward to in later life, while others will sit at home watching daytime TV? Or that some people will see medical specialists while others will put off seeing the GP?

It matters because these questions go to the issue of human dignity. Australians are entitled to incomes sufficient for a dignified life.

More broadly, these questions go to the issue of what sort of society we understand Australia to be. Whether we are all on this journey together, or whether it is OK that there is an increasing distance between people in economy, and the class of people who haven’t seen the back of a plane in years.

Date :   September 2, 2014 
Phillip Thomson

Public Service Reporter at The Canberra Times.

The main union representing public servants says the Department of Human Services has removed a clause enshrining the employment of people from diverse backgrounds from its draft bargaining agreement.

The major department employing about 30,000 staff is being closely watched during negotiations because haggling over its future agreement, which was much further ahead than at many other Commonwealth employers, was expected to set at least part of the agenda across the federal bureaucracy.

The clause was one mechanism in the existing agreement to ensure the department enforced a separate plan, titled the Workplace Diversity and Inclusion Strategy.

The strategy has committed the department to employing more people with disabilities, mature age workers and staff from culturally and linguistically diverse background.

Its clearest goal was to make sure 5 per cent of its staff were Aboriginal or Torres Strait Islanders by 2015, which would mean the department would have more than 1500 indigenous workers out of its 34,700-strong workforce in a little more than a year.

The department said it was on track to exceed the 5 per cent target

“As at July 2014, the percentage of Aboriginal and Torres Strait Islander employees in the department was 4 per cent, well above the Australian Public Service average of 2.3 per cent as at June 2013,” a department spokeswoman said. “We are also a major employer of people with disability.

“As at July 2014, 4.9 per cent employees of the department identified as having a disability.

“We are a leader in workplace diversity in the Australian Public Service, and so we should be as a large department providing vital services to the community.

“Any suggestion that this is not the case is absolutely without substance.”

The Community and Public Sector Union’s log of claims for all its negotiations affecting 160,000 federal public servants said the union wanted to include a paragraph committing to diversity as well as recruitment and retention strategies.

The department spokeswoman said the public service bargaining framework, handed down by the Abbott government to set the boundaries for the bureaucracy’s managerial representatives during negotiations, clearly stated enterprise agreements should not include terms dealing with matters more properly dealt with by legislation.

“The department’s workplace diversity and inclusion strategy is in line with the legislative requirements set out in the Public Service Act 1999,” the spokeswoman said.

“This strategy is available on the department’s website and intranet.

“It is ingrained in our mandatory training schedule.

“This strategy is our formal commitment to a workplace culture that builds respects, fosters inclusiveness, promotes diversity and embraces the unique skills and qualities of all our employees.”

Source:  Canberra Times


Man carrying surfboard

Many retirees are living active, healthy lives and they want to take part in our economy in all sorts of ways.
They are keen travellers. They look for slimmed down, accessible housing that suits their needs as they age.  They want products and services that meet their requirements and interests, but too often can’t find them. This is a failure of business strategy.
Deloitte Access Economics predicts that by 2030, more than 5 million Australians will be aged 55-70 and as we know, many are living well beyond that.
” I’d like to challenge Australian businesses to work on strategies that deliver to  both the bottom line and to older customers. If you look at the facts of demographic change, you will see including the mature dollar in your planning makes business sense,” said Age Discrimination Commissioner Susan Ryan.
Australian businesses are missing out on billions of dollars by not adjusting their business models to take account of older consumers with disposable income, according to the Australian Human Rights Commission.
In a speech delivered in Melbourne to the CPA Masters Series  Commissioner Ryan reported that the over 50’s have about $218 million in discretionary spending power.
“A staggering 40 per cent of Australia’s net wealth is held by mature Australians but all too often marketers, advertisers and businesses direct their attention only to the younger market. Not only do older consumers miss out on the services and products they are interested in,  but businesses lose potential markets ,” said Commissioner Ryan.
“Australians are living longer and are healthy for many more years than previous generations. Retirement is longer and far more diverse than the out-dated stereotypes depict.

Source: Australian Human Rights commission


Belinda Merhab

Forget knitting and pie-baking – Aussie grandmas are going into business.

Australian women aged over 65 have been starting their own businesses at a rate higher than any other age group, with nantrepreneurs setting up 18,500 businesses in the past 10 years, according to the annual Bankwest Business Trends Report.

Over the past year, the number of over-65 female business owners jumped by 15.1 per cent, compared to one per cent growth by men in the same age bracket.

Bankwest business banking general manager Sinead Taylor said the figures showed older Australian women were looking for ways to boost their retirement incomes.

Over-65 women were primarily starting businesses in the `other services’ category, such as hairdressing, photography and gardening, she said.

“This trend can be attributed to a variety of factors like lifetime personal goals and people pursuing new interests,” Ms Taylor said.

“There’s also the impact of the global financial crisis on retirement nest eggs, forcing some retirees to supplement their superannuation by starting their own businesses.

“Age is certainly no barrier to entrepreneurialism.”

Overall, the number of Australians running their own business declined by four per cent in the year to May.

The only other age group to see an increase in business self-starters in the past year were the under-25s, with 2.5 per cent of workers in that age bracket owning their own business.

Ms Taylor said challenging economic conditions were driving entrepreneurs to seek the security of being an employee rather than an employer.

Source:  SMH


Published 20 August 2014 12:05, Updated 21 August 2014 07:32

What Gen Y, Gen X and Baby Boomers want at work - and just wait for Gen Z

Tamara Erickson says managers should encourage Gen Y workers to innovate.

If you think managing Generation Y workers is tricky, just wait until the next generation walks through the door.

Generational expert Tamara Erickson says children aged four to 17 have been heavily influenced by the global financial crisis, the environmental movement, mobile technology and easy access to information on the internet. That is translating into a generation of savers who feel empowered to take action and aren’t very keen to work for big companies.

“They will make very interesting consumers and employees,” Erickson, who was listed as one of the World’s Top 50 Business Thinkers in 2013, says. “We have a generation of kids coming on who would like to be entrepreneurs if they could.”

The United States-based consultant has written three books on the different generations in our workplaces and is working on a fourth book on the next generation of workers, which she calls the “ReGeneration”.

Speaking to The Australian Financial Review before her keynote speech at the Australian Human Resources Institute national convention on Wednesday, she argues that each generation’s attitude to work makes perfect sense given childhood influences – but we rarely cut other generations any slack.

Erickson acknowledges there are plenty of things that influence our preferences at work, from life stage to gender and personality. But she argues our generation has a big impact on our “knee-jerk reaction” to things. “There’s really good evidence that show some of our generational biases follow us throughout our lives.”

Erickson is a follower of Swiss developmental psychologist Jean Piaget who argued that children’s experiences from age 11 to 15 have a lasting impact on the way their perceive and interact with the world. This helps explain the differences between generations, from traditionalists (in their 70s) who created many of our hierarchical organisations to those about to join the workforce.

Keeping Gen Y interested

Older executives tend to think that Gen Y workers don’t want to “pay their dues”, Erickson says. “Frankly, [Gen Y] don’t want to do some grubby job for five years in the hope it pays off.” She argues it is not that the generation is lazy and entitled, but it is influenced by the September 11 terror attacks and the wars that followed, as well as other acts of violence like the Port Arthur massacre. All this taught the generation that random things can happen and it is best to live life to the fullest now.

Managers should accept that is a ­reasonable way to think and start catering to it and encouraging them to innovate, she says. “One way to make even menial tasks more challenging is to let them [Gen Ys] figure out how to do them,” she says.

Options appeal to Gen X

Erickson urges companies to change traditional career paths to attract and retain Gen Xs. These workers in their 30s and 40s saw climbing divorce rates, corporate collapses and job lossess in their formative years and they are focused on being self-reliant, having options and having back-up plans, she says. Offering lateral moves around a company appeals to Gen X as it broadens their skill set and options, she says.

Boomers want cyclical work

With an ageing population, companies need to be able to keep the best of their workers aged in their 50s and 60s, Erickson argues. The key is offering flexible work. Her surveys have revealed that the most popular form of work for this generation is cyclical fulltime work (such as working on a project for a few months a year) rather than the usual part-time option. This gives boomer workers the freedom to travel. This type of work is slowly growing more popular in the US. For example Mitre, a US consultancy, has “reserves at the ready” – former full-time highly trained staff who can be called back in for big projects, Erickson says.

Source:  BRW

The Human Rights Commission has launched a new video awareness campaign aimed at highlighting the value of older workers.

The Power of Oldness, launched by Age Discrimination Commissioner, Susan Ryan and Minister for Employment, Senator Eric Abetz exposes the stark difference between the skills and strengths mature workers offer employers and organisations, with the discrimination they face when trying to gain or maintain jobs.

It is a web campaign aimed at raising awareness about the value of workers over the age of 50, with the video as its centrepiece.

Ms Ryan said Australians were living through a massive demographic change, but community attitudes, employer practices and business strategies seemed to ignore this.

“The Power of Oldness campaign will, we hope, prod everyone to recognise and act to stop age discrimination,” Ms Ryan said.

Rights Commission launches video

“Research undertaken by the Australian Human Rights Commission has found that one in 10 employers won’t recruit people over the age of 50.”

She said it was important that the experience and talent of older workers was highlighted as they already contributed to business and the community and had much more to offer.

Senator Abetz said the campaign was a way of getting the message about the value of older workers, to people of all ages around Australia.

“The video juxtaposes reality and perceptions in what I consider to be an active, pacey and poignant presentation,” Senator Abetz said.

More information on the Power of Oldness can be found at this PS News link.

Posted by Susan Ryan on 19 August 2014

Susan Ryan, Age Discrimination Commissioner at the Australian Human Rights Commission, calls on employers to take the age blinkers off and give experienced workers a fair go as part of a new positive ageing campaign titled The Power of Oldness.

Of all the complaints that the Australian Human Rights Commission receives about age discrimination, almost 60 per cent relate to employment. And these figures are an underrepresentation of overall cases. I also receive letters from older people and their families who do not wish to make a complaint, but want their stories to be heard. Their stories of repeated effort and repeated knockbacks are heartbreaking.

At a time when we are living longer and healthier lives, and when the Australian economy is crying out for skilled works, this should not be happening.

As Age Discrimination Commissioner my constant message is – give experienced workers a fair go. Take the age blinkers off and assess job applicants for what they can bring to the task.

When we waste the talents of mature workers, we not only harm them as individuals, we harm the economy, to the tune of billions of dollars lost each year.

I am encouraged that the challenge has been recognised by the Federal Government. An initiative announced in the budget shows leadership in the matter of recruiting and keeping mature workers.

On 1 July the Restart Programme commenced. This programme offers an incentive of $10,000 over two years to employers who hire a previously unemployed person over 50.

There are thousands of experienced capable older workers ready to work. All employers should look at the widest talent pool available, and appoint the best person for the job. Often, the best person will be the one with extensive, relevant work experience.

I am confident that when employers avail themselves of this incentive and take on an older person, the negative stereotypes about experience will disappear.

My message to employers is to give a 50-plus worker a go. Help restart their career – you won’t know what you’ve been missing out on until you try it.

For more information about the Restart Wage Subsidy, visit the Department of Employment’s website.

Source:  Living Well Navigator

Susan Ryan is a regular contributor to Living Well Navigator. Read more of Susan’s opinions on positive ageing:

Helpful links

Australian Human Rights Commission
Restart Programme

Henry Brodaty

Professor Henry Brodaty at Tuesday’s RightsTalk.

Photo: Australian Human Rights Commission

A leading researcher on ageing and dementia has called for better recognition of the contribution that older Australians make to society and more opportunities for intergenerational collaboration to help combat ageism.

In a talk to the Australian Human Rights Commission on Tuesday, Professor Henry Brodaty, co-director of the Centre for Healthy Brain Ageing at the University of New South Wales, said the positive contribution of older people to society often remained invisible.

The internationally recognised researcher also called for a rethink on Gross Domestic Product (GDP) as a measure of Australia’s economic health because it failed to capture the positive impact of population ageing on the national economy. He said as a metric, GDP was ageist because it excluded the value of volunteering and household-provided care and services, of which older Australians were big contributors.

“The common stereotype is that older people are decrepit, they are not functional, they are a drain on our society and they go into nursing homes but the facts are actually quite different,” he told the Sydney audience.

He said the overwhelming majority of older people lived in private dwellings in the community and a significant number of people over 65 were still in paid employment.

“Older Australians are active contributors. Almost half of 65-74-year-olds provide unpaid assistance to someone outside the house. One third are volunteering through organisations, two-thirds are in social or support groups, and one quarter, despite having relatively low incomes, are financially supporting somebody outside their house either a child or a younger relative.”

Older people were contributing “big time to our society,” he said.

Intergenerational connections

Professor Brodaty said Australia also needed to replace the idea of an intergenerational competition for resources with “cross-generational” resource allocation and greater opportunities for collaboration. He pointed to intergenerational education and community programs that supported a more integrated society as key examples.

Professor Brodaty has visited one of the world’s first intergenerational schools in Cleveland, Ohio, which has purposefully included older adults into the design of the school’s teaching and learning model to promote the sharing of skills and knowledge between generations. Other innovative programs have connected aged care residents with local preschools for mutual benefit.

Intergenerational competition for resources such as healthcare and jobs was also a false dichotomy and investments were required at both ends of the life spectrum, he said. “We need cross-generation resources to advance the welfare of all of us.”

Turning to the attitudes of the medical profession, Professor Brodaty said ageist views in the health system also should be stamped out, especially in the area of mental health where depression can be seen as a natural part of ageing.

He said older people were not a burden on health resources but “core business for health” and the health system could become more efficient by eliminating waste such as unnecessary treatments.

Many at the forum also expressed deep concern over recent media reports that the ABC was looking to cut back on TV and radio programs aimed at older viewers and called for lobbying efforts to begin to prevent a change to programming.

Older workers

Elsewhere this week the Australian Human Rights Commission launched a new video awareness campaign aimed at highlighting the value of older workers. ‘The power of oldness” campaign was launched by Age Discrimination Commissioner Susan Ryan and Minister for Employment Senator Eric Abetz on Monday to address age discrimination in the workplace

Source: Australian Human Rights Commission