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Grattan Institute ‘out of touch’ says ASFA

The Association of Superannuation Funds of Australia (ASFA) has directly confronted the Grattan Institute over claims that the Age Pension and rent assistance are more efficient than superannuation in providing for an adequate retirement.

Responding to a report in Money Management, ASFA chief executive, Dr Martin Fahy said the Grattan Institute's claims, especially those surrounding ASFA's comfortable retirement standard, suggested it was out of touch with the reality of living costs in Australia.

He said the Grattan Institute's willingness to condemn hard working Australians to a life of near poverty in retirement was patronising and represented poor public policy.

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"The submission from Grattan, to the Senate Standing Economics Committee Inquiry into the Superannuation (Objective) Bill 2016, is attacking a super system internationally acknowledged as first class and one that is delivering a higher standard of living for retirees," Fahy said.

He said Grattan's claim that annual expenditure of $43,372 for a single person and $59,619 for a couple at age 65 would deliver a luxurious lifestyle suggests the think tank is out of touch with the reality of living costs in Australia.

"The ASFA comfortable standard is based on a detailed analysis of the level of spending needed to meet the realities of retirement, including: health and aged care with the associated out-of-pocket medical expenses; running a modest car; basic home maintenance; and being able to run air conditioning in summer and heating in winter," Fahy said.

He said ASFA believed Australians were justifiably worried about longevity and aged and heath care costs in retirement and superannuation represented a big part of the solution.

Fahy said Australians did not aspire to retire on the Age Pension and the Grattan Institute's aspirations flew in the face of a long tradition of a progressive improvement in living standards for successive generations.

The Grattan Institute's submission to the Senate Economics committee inquiry into the Government's legislation around the objective of superannuation urged Parliamentarians to reject the view that superannuation's objective is to provide an adequate, or ‘comfortable' retirement income for all Australians, claiming the Age Pension and rent assistance represented better tools than superannuation to provide an adequate retirement for those on low incomes.




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The Aged Pension is not an entitlement. It is and always has been designed as a welfare payment to stave off poverty. Why the govt sees it necessary to get advice from a socialist think tank is beyond me.

That's not correct. The aged pension was contributed to via a tax from the time of Menzies, who had these funds quarantined as per the current Future Fund. After about 15 years the government of the time pilfered $200-$300M and took it all into consolidated revenue. Then after that, years later, they then applied a set of means tests to it, to remove the entitlement for many, who had already contributed to it. A recent paper on this explained the history and was very enlightening. Basically the governments turned it from a legitimate entitlement to welfare -and all the shame and guilt that goes with it, and causes older Australians much stress. Many of these older Australians made contributions as they were employed throughout the 50's, 60's and 70's.

The Grattan Institute's assessment leaves pensioner private-renters far behind. The Rent Assistance amount might allow one to rent the kitchen and half a toilet on a median rent.

Living in tassie aircon is not critical but heating costs are . Have just installed wood heating which along with solar hot water reduces the amount required to be spent on power costs in retiral. Various rebates ( council rates, electrical costs, water rates, health and pharmaceutical costs , motor vehicle registration fees ) mean that many fixed costs are reduced . Looking ahead I can see that the aged pension will provide enough income to get by on ( I suspect malnourishment due to lack of income will be the least of my concerns) . Superannuation will never , in my case , provide sufficient returns to replace the age pension but will give me a small buffer to allow for replacement of things like white goods and vehicles .As far as leaving money in the superannuation system goes after retiral I see no point . There will be no tax advantage , there will be the infamous superannuation fees and probably the most compelling reason for avoiding superannuation is the fact that unlike bank term deposits there is no government backed capital guarantee .

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