Hockey supports post-retirement self-sufficiency

While the Federal Treasurer, Joe Hockey, has used his latest speech to reinforce the likelihood of a further tightening of the age pension rules, he has also signaled the Government’s recognition of the desirability of post-retirement self-sufficiency.  

Hockey’s speech, which has been widely interpreted as signaling high levels of means testing and the greater use of co-payments with respect to the delivery of Government-subsidised services, also referenced the fact post-retirement self-sufficiency could help reduce the burden on age pension.  

His comments suggest that while Budget strictures will limit the degree to which the Government can adjust the tax arrangements around superannuation, it will not be moving to discourage Australians increasing their level of post-retirement savings.  

The Treasurer said that in Australia between 2010 and 2050 the number of people aged 65 to 84 was expected to double, and that the number of people aged 85 and older was expected to quadruple, before adding that living longer was a good if people “have the health to enjoy it and the wealth to support it”.  

“And it would not be an issue if those entering their post-work years had the resources to support themselves,” he said.  

The comments in the Treasurer’s speech appear to run counter to claims by some economic commentators that superannuation tax concessions represent as big a burden on the Commonwealth purse as the age pension.