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Pension payments insufficient: Crompton

Reform priorities for an ageing society were firmly on the agenda of the Canberra tax forum.

The chairman of the government's advisory panel on the economic potential of senior Australians, Everald Compton said the changing demographic in the nation's population was "not a crisis, but an opportunity".

Compton said currently there were 3700 Australians aged at least 100 years of age, but this was forecast to rise 50,000 by 2050.

Many Australian seniors wanted to stay in the workforce, but there was significant discrimination by employers.

"It takes them five times as long to get a job as a younger person," Compton said, adding that businesses needed incentives to employ older Australians.

"In other words, instead of giving business a tax cut, to say to them every time you employ an older person we are going to give you some sort of tax bonus or benefit for the fact that you do that," he said.

Crompton said incentives were necessary to make sure older people did not have to get back on the pension.

He said the superannuation of most Australians would have run out by age 85, meaning they would have to rely on a government-paid pension.

Crompton said those Australian seniors wishing to work did not want to be a burden on the nation."They are reliable, they are experienced, they turn up, they don't take sick leave," he said.

"They are not looking for a better paid job the following week and taking off.

"They want to contribute something to Australia."

Crompton told the forum work test and age limits on personal superannuation contributions were also in need of reform.

"To maximize the ability of Australians to accumulate superannuation savings over the course of their life, all restrictions on contributions by people over the age of 75 should be phased out from 2013."

From July 1 2013, the government will increase the superannuation guarantee age limit from 70 to 75.

He said it was important that the government reviewed how the retirement income system interacts with incentives for mature age employment to ensure greater consistency. In particular, incentives to retire early should be removed from the system.

Elsewhere at the forum, John Wicks, economic advisor to St Vincent de Paul said alleviating poverty was a basic function of government. He proposed a target of seven per cent on the number of Australians living in poverty be set. He didn't say how to define poverty.

"What I propose is that the government set an interim specific target on the number of Australians living in poverty and disadvantage and that that target be around seven per cent," he said.

"It is quite a fall on what is existing at the moment, depending on your criteria, but it is not the best in the world."

Bishop Pat Power of Catholic Social Services, after challenging delegates to contemplate living on NewStart's $35 a day, put in a big word for the working poor, which he said was an unseen group of mainly migrant women.


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