POWERED BY MOMENTUM MEDIA
(December-2004) Superannuation fireworks – past, present and future
2004 will be remembered as a landmark year for superannuation in Australia — perhaps the most significant year since the Hawke/Keating Government introduced the superannuation guarantee back in 1992.
Over the past 12 months we have been witness to:
n The Federal Treasurer, Peter Costello outlining the Government’s retirement incomes policy.
n The implementation of the superannuation co-contribution.
n Senate approval for the implementation of a new choice of superannuation fund regime from the middle of next year.
Any one of these three measures would have been significant in their own right but, taken together, they represent precursors to a fundamental change in the Australian superannuation and retirement incomes landscape.
But for me, as editor of Super Review and a long-time watcher of federal politics and government policy development, it was February’s announcement by the Treasurer of a new approach to retirement incomes in this nation which carries with it the most far-reaching implications.
Why? Because Costello’s policy statement has already had a seminal impact on the way Australians think about their working lives and their approach to retirement.
Gone is the notion that our superannuation will be sufficient to afford a comfortable retirement. Gone is the notion that we can live satisfactorily on the pension.
These notions have been replaced by a realisation that most baby boomers are under-superannuated and that a retirement reliant on the pension will not grant us the sort of lifestyles we desire.
The reality is, of course, that these were messages that organisations such as the Association of Superannuation Funds of Australia (ASFA) had been floating for years. Indeed, ASFA had produced significant research over a number of years which made abundantly clear that many Australians were living in a fool’s paradise when it came to the adequacy of their retirement savings.
Then, too, financial planners have been making clear to clients over a number of years that they need to take care of their retirement savings and that the options for doing so included contributing more to superannuation or just plain working longer.
It is significant that over the closing months of the year at least three surveys have been published making clear that increasing numbers of Australians now acknowledge that they are under-superannuated. It is also significant that these people believe that working well past normal retirement age represents the best answer to that problem.
There is nothing uniquely Australian about this. Recent survey data provided by Mercer Human Resources has indicated that exactly the same sorts of things are happening in the US.
The challenge for Government, therefore, is creating an environment in which people can continue to work beyond retirement age in circumstances where it is becoming something of an achievement for Australians to remain in employment past their mid-50s.
Despite the rhetoric of Governments and employer organisations, age discrimination continues to be a reality in many Australian workplaces.
Anyone who doubts that age discrimination remains a harsh reality in Australian employment need only examine the demographics of some recent ‘corporate restructures’ within the financial services sector. All the anecdotal evidence points to the majority of those asked or persuaded to leave being aged over 50.
So the challenge for Treasurer Peter Costello is to ensure that the Government uses its new, largely unfettered term of Government, to underpin the retirement incomes policy he announced in February this year with workplace legislation which genuinely discourages age-based discrimination.
The majority the Government holds in both Houses of Parliament affords it a unique opportunity to address the long-term challenges confronting the Australian economy not least being the long-term consequences of an ageing population burdened by inadequate retirement savings.
AUTHOR
Mike Taylor
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