Last week’s budget was introduced with the statement that Australia faces
major challenges in the next decade, specifically the ageing of the population,
health care, aged care, the emergence of climate change, the instability of our region and the global shocks which can threaten (the) economy.

No surprises or disagreement with that snapshot. But when the detail of how and where the Federal Government would spend the surplus was revealed, we saw a budget long on rhetoric and short on delivery for older Australians.

In particular, the use of the surplus to offer tax cuts as a pre-election sweetener is an appalling waste of an opportunity to offer incentives, instead, to those struggling to live within their means AND save for a modest retirement. Let’s look at the numbers again – some 75% of Australians aged 50-plus are staring down the barrel at living on at least a part Centrelink benefit. These workers form part of that group described as asset rich baby boomers – but often the only asset of major significance for these workers is the family home – something most are loathe to part with to fund future living expenses.

And why should they? It is hardly the fault of many older Australians that they have spent most of their working lives outside the superannuation environment – either by fractured working histories, time out to raise a family, or simply being in the wrong industry sector. The 14 years since compulsory superannuation was introduced by the Keating government have simply not been enough for many to pay their weekly bills and contribute a significant amount towards a retirement savings nest egg. After all, not all of us are fortunate enough to work for the Macquarie bank – particularly the 57 per cent of women who are facing retirement on superannuation savings of less than $5000*.

So what did older Australians receive in the budget? One off cash payments of about $500 which are easily spent on consumer products – but worth so much more as part of superannuation compounding on an annual basis. Retrospective co-contributions – fabulous for those who could afford to make these contributions back in 2005–06. But why not offer this as an incentive to encourage more investment in super next year when we can all do something about it? And a reminder of additional aged care funding which was already costed and announced in February this year. Is this good enough?
I think not.

* Quoted in Financial Planning, ‘Men are from Mars: women and retirement’, July 2005.