05/06/2014 - 06:47

Ageing Australians deserve choice

05/06/2014 - 06:47

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Politicians from both sides have failed to offer real choice when it comes to our retirement from the workforce.

Ageing Australians deserve choice

Clearly the 150 years between 1651 – when the great English philosopher Thomas Hobbes (1588-1679) released his famous book, Leviathan – and the early 1800s was a period of momentous change across England.

Although that book is now rarely read, many will have heard Hobbes' snappy description of the human condition at the time: "And the life of man, solitary, poor, nasty, brutish, and short."

Life expectancy across England throughout the 1600s was about 35 years.

English historical demographer Sir Tony Wrigley's researches show life expectancy from the time of Hobbes' death, until the early 1800s, jumped by a decade.

That truly impressive achievement, incredibly, would be bettered over the next two centuries.

According to a July 24 2013 Daily Express report, headlined 'Britons' life expectancy increases': "Life expectancy for men and women in England and Wales has increased by more than a year in less than a decade.

"Women are now living to an average age of 82.8 years and men 78.8 years, according to the Office for National Statistics.

"The results, gleaned from data for the period 2009-2011, is up from 81.7 years for women and 77.5 years for men in the period 2005-2007."

There's no doubt Hobbes could never have imagined how wrong his description of life's brutishly short nature would be when applied to modern Britain, with both men and women now living more than twice as long as in the late 1600s.

And this phenomenon is now taken for granted across the entire developed world – Europe, North America, Australasia, Japan – and various modern parts on other continents.

Sunny Australia's situation, according to Sally Patten of the Council of the Ageing, is even better.

"Between 1908 and 1970, the life expectancy of a 65 year old Australian male rose from 76 to 77 years," she says.

"Today, a 65-year-old male can expect to live until they are 84."

Even in less-developed societies the post-Hobbesian pattern has been emerging, although longevity is still lower.

All this is due to progress in Western medical and agricultural science, public hygiene administration, and expansion of globalised commerce.

In other words, the blessing of long lives has been shared with humanity worldwide due to Western colonialism, work of religious and secular missionaries, developments by pioneering Western pharmaceutical companies, and policies of Western-initiated agencies such as the World Health Organisation.

Who, therefore, could have imagined that, only a handful of lifetimes ago, longevity would become viewed as a challenge or even a problem?

As it turns out, many have been predicting for years that welfare-oriented states like those across Europe, North America, and Australasia would be called upon to confront what's now referred to as the problem of ageing populations.

I vividly recall now retired University of Western Australia economic historian and demographer, Professor Reg Appleyard, referring to this during tutorials I attended in the early 1970s.

He pointed out that the baby boom of the post-war years would eventually need to be confronted due to an emerging range of challenges – from pension eligibility, aged care, and perhaps even labour shortages.

So the Hawke-Keating governments took early steps in the 1980s to confront the ageing issue with introduction of compulsory superannuation.

And in 2009, Labor treasurer Wayne Swan announced the lifting of the retirement age from 65 to 67 years by 2023.

Furthermore, Mr Keating is now promoting the idea of adding a compulsory universal aged insurance scheme to help fund retirement care for the over 80s.

He's claiming the Hawke-Keating compulsory superannuation is only capable of funding seniors until their 80th year, not beyond.

That's three Labor compulsions, one each by Messrs Hawke and Keating, and Mr Swan, and another now being promoted by Mr Keating.

So the following words in Treasurer Joe Hockey budget speech were hardly surprising.

"Building on the move by the former government to increase the pension age eligibility to 67 by 2023, this government will gradually increase the age of eligibility to 70 by 2035," he said.

But the Hockey follow-on, like the three previous Labor-initiated ones, unfortunately also rests firmly on compulsion.

Nowhere has voluntary choice been presented as an option.

Why, therefore, not leave the Swan rise to 67 years in place and allow anyone opting to work beyond that age to be progressively compensated by having their taxable income lowered for each year they're in the workforce, and to nil after year four?

So, during the 68th year, one's taxable income would be slashed by 25 per cent; in the 69th year it would drop 50 per cent, and so on until the 71st year, when one be tax free on the first $100,000 (indexed) for as many years as someone chooses to work.

Imagine, progressively removing one's tax burden after turning 67 with no taxes up to $100,000 after one's 70th birthday.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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