THE Review Panel final report on Retirement Income has been welcomed by self-funded retirees "as it provides a much-needed fact-based assessment of the three pillars of the Age Pension, compulsory superannuation and private savings that are the foundation of Australia’s retirement income system,” according to Wayne Strandquist, president of the Association of Independent Retirees (AIR).

“Retirement income derived by self-funded retirees can be drawn from one or any combination of the three pillars of Australia’s retirement income system and self-funded retirees have a direct interest in any changes that may be contemplated by the Government as a result of the Review Panel report,” Mr Strandquist said.

“The Association of Independent Retirees is pleased to note that the key observation of the Review Panel was that ‘the Australian retirement income is effective, sound and its costs are sustainable’,” he said.  “This observation provides a sound basis for consideration of any changes that may arise from the report to address issues of inequity and ensuring the system delivers a retirement income that achieves a reasonable balance in relation to working life earnings and retirement income.

“When compulsory superannuation was introduced in 1992, the government of the day and subsequent governments have supported tax concessions to encourage greater independence of the working population in funding their retirement. The Superannuation Guarantee has not as yet reached full maturity and there is still a requirement to encourage more Australians to be less dependent on the Age Pension.
 
“Self-funded retirees need to be sure that they have adequate savings to fund their retirement for a multitude of reasons apart from funding a reasonable standard of living," Mr Strandquist said. "

These reasons being having sufficient funds invested to ride out economic instability in instances such as the GFC and COVID-19, cover inflation affecting the cost of living, providing for higher health care costs in old age, providing for residential aged care if required, and providing for times of low-interest rates.
 
“AIR is looking forward to working with the Government to draft legislation that will address issues raised in the fact-based report on retirement income,” Mr Strandquist said.

 www.independentretirees.com.au

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THE Queensland Resources Council (QRC) and its members look forward to continuing its close partnership with the Queensland Government’s Department of Resources following the appointment of new Director-General Mike Kaiser, QRC chief executive Ian Macfarlane said today.

Mr Macfarlane said the Department of Resources - and its predecessor the Department of Natural Resources, Mines and Energy - had worked closely with the QRC over many years to promote the sustainable and successful exploration and development of the state’s coal, metal and gas reserves.

“The QRC secured a commitment to work with the re-elected Palaszczuk Government to prepare and implement a Queensland Resources Industry Development Plan to ensure the contribution of mining and gas industries to Queensland’s COVID-19 recovery and its economic growth beyond the pandemic that is maximised,” Mr Macfarlane said.

“The QRC looks forward to working with the new Director-General and his department to ensure this plan becomes a blueprint for the sector’s growth and Queensland’s recovery.

“The plan should be a blueprint for how Queensland strengthens its role in the global energy mix and contributes to the development of advanced manufacturing.” 

Mr Macfarlane also paid tribute to the department’s outgoing Director-General, James Purtill.

“The QRC has worked closely with James and his team on a range of issues impacting the resources sector,” he said. 

“At no time has the strength of this partnership been closer and stronger than in the response to COVID-19, when the resources sector and the department worked tirelessly together to keep the men and women in our industry safe, and their families and communities safe. 

“We did that while ensuring operations could continue to keep Queenslanders working and earning for Queensland.”

www.qrc.org.au

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THE Retirement Income Review panel’s report clearly shows the need to address the significant gender-blind spot at the heart of Australia’s superannuation system, according to HESTA CEO Debby Blakey.

Ms Blakey welcomed the release of the review and its findings that Australia's super system is ‘effective, sound and sustainable’ and is making a significant contribution to lowering future Age Pension costs.

Ms Blakey said the review is the latest in a long line of reports that have shone a spotlight on the persisting gender inequalities in Australia’s superannuation system.

“Urgent reform to make our super system fairer for women is long overdue,” Ms Blakey said.

“Australia’s working women would be dismayed if the government did not now take substantial steps to address these long-standing issues, given they now have this latest evidence at their fingertips.”

Ms Blakey said she welcomed the findings of the Retirement Income Review that noted pension systems around the world recognised the different working patterns of women and sought to appropriately value the unpaid caring roles they uniquely perform.

“Australia is out of step with this global trend, leaving women more vulnerable to poverty later in life. The failure to address long-standing gender inequities in super risks consigning the next generation of Australia’s mothers and their daughters to greater financial vulnerability as they age.”

Ms Blakey said it was hard to understand the panel’s view that lifting the Superannuation Guarantee to 12 percent would ‘deliver an intolerable equity gap between men and women’.

“The super equity gap women experience has long been intolerable," Ms Blakey said. "Telling working women that they should have less to retire on because men would have relatively more super simply highlights how much the thinking needs to change if we’re to improve women’s financial outcomes.”

In its submission to the review, HESTA recommended eight key equity measures that would have a long-term positive impact on the retirement outcomes of women and those earning lower wages.

These included appropriately valuing unpaid caring roles and Ms Blakey said it was encouraging that the review found a form of ‘caring credits’ could be implemented but with Australian characteristics.

Ms Blakey said the review revealed it was also women who were doing the heavy lifting to close the gender super gap, making comparatively more voluntary after-tax contributions than men.

“Women shouldn’t have to make up for the shortcomings of the system – and it’s typically only higher-income earners that are able to do this,” Ms Blakey said.

Single women over the age of 55 are the fastest-growing cohort experiencing homelessness. The review highlighted the challenges single women face to achieve financial security in retirement, with the increased divorce rate later in life highlighting the need to reform super splitting arrangements.

Significant numbers of working Australians also struggle to afford rent let alone use home ownership to support retirement income.

“Reform to our system needs to build on the founding principles of super - of universality, fairness and dignity in retirement for all.”

About HESTA

HESTA is the largest superannuation fund dedicated to Australia’s health and community services sector. More than half of those working in the sector nationally invest their retirement savings with HESTA. An industry fund that’s run to benefit members, HESTA now has over 870,000 members (more than 80 percent are women) and manages more than $54 billion in assets invested around the world. HESTA is the acronym for Health Employees Superannuation Trust Australia.

www.hesta.com.au

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THE Retirement Income Review released today provides a valuable baseline of data against which to measure the performance of Australian retirement income and superannuation systems.

The Financial Services Council (FSC) has welcomed the considered contribution to the policy debate from the panel of independent experts and notes their conclusion that Australia’s retirement income system is ‘effective sound and its costs are broadly sustainable.

The review made the important conclusion that government expenditure on the Age Pension as a proportion of GDP is projected to fall over the next 40 years to around 2.3 percent and that higher superannuation balances reduce Age Pension costs. In effect, the superannuation system is delivering on its objectives.

FSC CEO Sally Loane said, “The FSC acknowledges the review’s emphasis on using retirement savings more efficiently, and we support implementing the Retirement Income Covenant for trustees. In the context of our successful system, however, we urge the government to also consider carefully whether any changes to the schedule increase in the superannuation guarantee to 12 percent would be in Australians’ best interests.

“The independent review, and the Productivity Commission inquiry that proceeded it, both emphasised that consumers have a right to expect our retirement and superannuation systems are efficient,” Ms Loane said.

She said the FSC recognised there was more work to be done to make the retirement system more efficient, including finalising the government’s recently announced ‘Your Future, Your Super’ reforms, which if implemented carefully will help ensure our mandatory superannuation system is efficient and competitive.

A copy of the Retirement Income Review can be found at: https://treasury.gov.au/publication/p2020-100554

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