Merc boss calls for review
Mercantile Mutual’s new funds management boss has urged federal government to consider ty-ing health and aged care funding to superannuation.
Mercantile Mutual’s new funds management boss has urged federal government to consider ty-ing health and aged care funding to superannuation.
Ross Bowden, who recently took over from the ING Canada-bound Paul Bedbrook, says health and aged care will be a greater social cost in the future than pension payments.
"Everyone talked about the long-term cost to taxpayers of superannuation, and how it's going to rise to a certain percentage of GDP. The superannuation guarantee levy was designed to address that," Bowden says.
"But the greater cost to the future will be health and aged care. The current projections indicate that the aged pension costs will rise to somewhere like 5 per cent of GDP in 50 years time.
"But the cost of health and aged care is predicted to rise to anywhere from 12 to 15 per cent of GDP."
Bowden says the government should consider the model used in Singapore where superannua-tion and healthcare payments are linked.
"You'd have part of your salary going into a health account to pay a health premium or some other contribution to health costs. Any extra could be tipped into retirement savings."
Bowden also called for a review of superannuation in Australia, with a view to gradually lifting the maximum superannuation guarantee contribution from the present 9 per cent to 15 per cent.
"We believe there needs to be an emphasis put on long-term saving. If you want to give people in this country a decent retirement income at a time when they're living increasingly longer, then you're going to have to increase it to 15 per cent," he said.
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