Australia must take swift action to avoid a pensioner-induced budget crash. That’s the dire warning from Chartered Accountants Australia and New Zealand (CAANZ), which has claimed Australia’s ageing population and growing budget deficit present the country with pressing challenges, and that the Federal Budget should be a key vehicle towards fixing it.
CAANZ represents more than 117,000 financial professionals, and argued that the nation needs brave budget decision-making and long-term planning that thinks beyond election cycles and four-year forward estimates.
The body is calling on government to comprehensively review retirement income policies, looking specifically at tax policy, superannuation, the Age Pension, healthcare and aged care, and the way they all intersect, including elder financial abuse.
“The time to act is now to ensure we are best prepared to meet the challenges and ensure Australians can live comfortably, with dignity, in their retirement,” said Tony Negline, CAANZ’s head of Superannuation.
“The Government needs to ensure retirement policies are not only sustainable and stable, but that they also give investor’s trust and confidence in the system.
“By focusing on long-term planning and decision-making, and avoiding constant tinkering with retirement income policy, the Government will provide much-needed certainty and clarity to all Australians.”
CAANZ said that superannuation rules and policies must be simplified to make a more efficient and cost-effective system, adding that the overall goal must be to create a national culture of savings and self-sufficiency in retirement.
As well as a comprehensive review of retirement income policies, one of CAANZ’s key recommendations ahead of the 2017-18 Federal Budget is for the Government to adopt a long-term view in budget planning and forecast the implications of key policy decisions over ten years.
“With our ageing population and large budget deficit, our pressing concern must be avoiding a pensioner-induced budget crash that will either blow up living standards, blow up the budget or blow up both,” added Negline.
“Superannuation can’t just be about providing an income in retirement to substitute or supplement the Age Pension. We must encourage and incentivise saving and self-sufficiency, to overcome the challenges of an ageing population.
“A long-term view will ensure we make the best possible use of our limited revenues and will increase community confidence in the process.”