There is something terribly wrong, when older Australians living on the Age Pension are forced to live in poverty. According to a recently released by the Organisation for Economic Cooperation and Development (OECD), Australia ranked second worst of its members in 2014, just behind Korea (south).
More than one-third of Australia’s age pensioners are doing worse than the other 31 member countries.
It gets even worse. Australia ranks the worst in terms of equity, defined as the gap between those in poverty and the country’s median household income. This accounts for 36 percent of age pensioners, which is worse than in Korea and dismal next to the OECD average of 12.6 percent.
According to the report, the cause is that the Australian government contributes only 3.5 percent of Gross Domestic Product (GDP), when on average, while the governments of the other countries contribute 7.9 percent on average.
The findings of the OECD 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 the region on income security, due to the high rate of old age poverty and pension coverage which is below the regional average.
Council on the Ageing chief executive Ian Yates said the report challenged perceptions that the pension was too high and Australia could not afford to do any better.
“Claims that the age pension is somehow too extravagant and unsustainable do not bear out,” he said.
The argument of an aging population is already imposing a burden on those still at work does not wash, since in this respect, Australia is no different than other countries. Besides, the fact that a lower proportion of GDP is being devoted to look after retirees, counters this justification for the way things are.
The cost of living is particularly high in Australia and a major factor is housing affordability. Older Australians are affected. The real value of the age Pension has gone backwards, along with all other Centrelink payments, with the annual payment being around about $22,000 for singles and $34,000 for couples.
Stringent means testing and a low ceiling on other income before deducting, means that a significant group is left without or with a reduced pension.
When the Age pension was introduced in Australia on 10 June in 1908. Australia was a world leader and it was accepted that a person had a right to live out their old age free from poverty because of their contribution to the community through a lifetime’s hard work. It was also believed that older Australians should be free from the stigma of charity.
A lifetime of paying taxes means that retirees have already made their own contribution.
Then came the age of superannuation in the 1980’s, serving as a push to make wage earners subsidise their own retirement twice. It was used to justify the sliding back of the Age Pension and served as a major plank for the introduction of neoliberalism into Australia by the Hawke-Keating governments. Its ideological premise was, the withdrawal of government responsibility and introduction of the concepts of privatisation and allowing the rule of the market mechanism.
This remains the way Australian governments see the world and there will be no change until this comes to an end.