The reality is much more complex than what Palmer, Abbott and this Fact Sheet present. People older than 65 comprise only 13.5 percent of population. The death rate at age 65 is “currently” 10 percent but increases very sharply to 20% at age 70 and almost 50% at age 75 and “around” 100% at age 85. Palmer might be wrong today but his estimation is going to be proved optimistic in next one or two decades. I tell you why:
(1) Remember this should not be about age 65 but rather 70. The bipartisan push for increasing it to 67 by 2023 and 70 by 2035 make Palmer look optimistic in near future.
This fact check might be right about the current status, but it won’t be true in next one or two decades when many of us (aged 25-50) will become pensioners. If the pension/retirement age is lifted to 70 (most likely due the bipartisan commitment and the lack public commitments to resist it) then we should recalculate our figures.
(2) It is true that the current life span (which is only an average number) is around 82 (in this age the death rate is actually around 90%). But considering the accelerating Americanization of our economy and especially the decaying, deserted social services, particularly health services (caused by these constant budget cuts and privatization processes), plus longer working hours and years (under the corrupt-tax-evading-resource-dependent capitalistic regime brought by the Australian elite – Coalition, Labour, Palmer, mining and media corporations, etc) the life span in Australia is expected to decline to 75-78 in next decade (78 is the current life span of Americans and will be our near future life span too). In this case, those who survive will have only 8 years to enjoy their retirement while many of them will be in poor health conditions with lower amounts of pension paid to them (if the whole pension is not gone). The death rate at age 65 will be around 20-30 percent and the death rate at age 70 (future pension age) will be around 50-60 percent (with the shrinking life span, the current death rate will be shifted 5 years earlier). Besides, the cost of living beyond 65/70 will also increase significantly.
This means that 50-60 percent of us (those who are in ages between 30-50) will be dead by the time we become eligible to receive pension. The government recommends that people must have a saving that would cover 60 percent of their last salary after they retire. Assuming that these people will have paid off their mortgages by that time and own their houses (and raised their children to become independent) they still need to have 1.2 million dollars in saving and/or assets to bring them 60 percent of their last income (the inflation rate in next 25 years is included in my calculations). But the superannuation companies are telling us that if no more crises happen in next 25 years (!), people can accumulate in average 350k in their funds which is only one third of what they need to secure a decent retirement. For the remaining two third of their living costs they will be dependent on pension which will be given to them after they turn 67 or 70.
So good luck young Australia if you foolishly think you will enjoy retirement life as much as your parents and grand parents enjoyed. Or Australians must wake up now before it’s too late.
ABC here by this dodgy fact check is helping the Australia capitalist elite to justify their draconian pension reform.
In terms of solutions, instead of making people work from cradle to grave, better to open up our labour market to skilled and manual immigrant workers (who based on history bring jobs rather than take jobs) and fortify our manufacturing sector (by shifting it towards green alternatives). This will increase the labour mobility internationally which reinforces their power in their home countries (China, India, etc.) to negotiate for better conditions. Thereby, Capital will have less incentives to fly abroad, and therefore you will make the economy more productive, the population younger, and the prospective retiring life more decent.
S A Hamed Hosseini
Fareed Zakaria has recently published a piece in Washington Post claiming that:
Historically, when the U.S. government, World Bank or International Monetary Fund have advised troubled countries, they have stressed that achieving fiscal stability is only part of the solution. The key to reviving growth is structural reforms to make an economy more competitive, as well as investments in human and physical capital to ensure the next generation for growth. Yet we have been unable to follow our own prescriptions.
The United States could become more competitive in many areas. Our gargantuan and corrupt tax code clocks in at 73,000 pages, including regulations. Vast aspects of the economy, such as agriculture, receive massive and distorting subsidizes for no larger national purpose. Regulations in industries such as finance are highly complex, and sometimes worse, with banks being supervised by multiple federal agencies and 50 sets of state agencies, all with overlapping authority.