Academics and policy experts have condemned the Liberal/Green pension cuts in submissions to the Senate inquiry into the legislation.
Professor Miranda Stewart, the Director of the ANU’s Tax and Transfer Policy Institute, has labelled the proposal poor policy, because it penalises savers:
“The proposed asset test tapers effectively doubles the rate of the wealth tax on pensioners while simultaneously narrowing the tax base, contrary to generally accepted good principles of tax and transfer design.”
As Labor has been saying all week, this measure is an attack on pensioner households and a tax on middle income Australians who are planning to retire in the next 10-15 years. The submission goes on:
Assuming a return to savings of 5 per cent, a consequence of the asset test is that income from savings is heavily taxed at an effective marginal rate around 160 per cent.
The Committee for Sustainable Retirement Incomes - an independent, non-partisan, non-profit organization committed to improving the adequacy and sustainability of retirement incomes of older Australians - has also criticised the cut. Its submission says the proposal:
“pays little attention to the possible adverse impact of the very high withdrawal rates on incentives to save and invest”
As a consequence of this change, there is now a:
“serious danger of the proposed test encouraging unwise investment behaviour.”
These new submissions add to the growing criticism of the policy for the impact it will have on middle Australia.
National Seniors Australia – a leading peak body for senior Australians – has already condemned the change:
“The changes as announced in the budget were poorly thought through, and, subsequently, unfair,”
Appearing on ABC’s 7.30 on Wednesday, NSA CEO Michael O’Neil went on:
“The outcome is unfair for middle Australia”
MICHAEL O’NEIL – 7.30 – 17 JUNE 2015
Unfortunately, further submissions will now not be received, with the Greens and the Liberals uniting to shut down the Senate inquiry nearly two months before it was due to report.
Clearly, neither the Government nor the Greens want a proper discussion about these changes.
The Greens and the Government have done a deal to sell out pensioners.
Only Labor will stand up for pensioners. Only Labor will fight for the pension.
FRIDAY, 19 JUNE 2015