Financial measures to address ageing promote inequality and weaken the budget

June 27, 2011 • Daily Email Recap

Thanks to Mark O’Conner for this article by Dr Ben Spies Butcher, Lecturer in Economy and Society at Macquarie University in the independent magazine The Conversation, April 26, 2011, which dismisses the myth of an aging ‘crisis’.

Titled “The myth of the ageing ‘crisis'”, Mark points out that it says that despite the constant talking up of a potential ageing crisis, “the evidence of a problem is minimal”.  See http://theconversation.edu.au/articles/the-myth-of-the-ageing-crisis-1113?utm_source=The+Conversation+Daily+updates&utm_campaign=66f056121b-DailyNewsletter&utm_medium=email

Financial Measures to Address Ageing, Promote Inequality and Weaken the Budget

So far there have been three Intergenerational Reports by Treasury examining the challenges of an ageing population which have consistently been used to justify new policies to address a potential ageing ‘crisis’.

Yet, the evidence of a problem is minimal, and often the measures proposed increase inequality and weaken the budget.

In last year’s budget, the Labor Government announced changes to the aged pension to gradually increase the age at which people will be eligible from 65 to 67. Similar moves in Europe caused riots. In Australia, it was barely noticed. The government has also proposed increasing compulsory superannuation contribution rates from 9% to 12%.

Together these measures seek to shift the balance of retirement policy from public pensions to private savings.

For policy theorists this presents a number of contradictions.

There is little evidence that population ageing will hurt the budget, while measures to support private savings tend to exaggerate inequality and penalise those that provide care for free – particularly women.

To read the full article, please click here:  http://theconversation.edu.au/articles/the-myth-of-the-ageing-crisis-1113?utm_source=The+Conversation+Daily+updates&utm_campaign=66f056121b-DailyNewsletter&utm_medium=email


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