Government facing a pensioner revolt 

Opinion: Arrogant politicians should be ready for a pensioners’ revolt

“THE stigma of charity should be removed from the age pension. It should be an entitlement earned by the person’s personal contribution to the fund,” said a very famous Australian long ago.

Who? Former Prime Minister Sir Robert Menzies. When? At the time the current pension scheme was introduced. Fund? What fund and what personal contribution?

You wouldn’t know about it listening to the major parties’ politicians or Senate crossbencher David Leyonhjelm who, echoing former Treasurer Joe Hockey, told the ABC he wants Australians to drop their sense of entitlement to the aged pension, which should only be paid to poor people, and receiving it should be “nothing to be proud of”.


Menzies (above in a 1951 file shot) insisted that the Compulsory Contribution (levy) should be kept completely separate; that it should be paid straight into a trust account and not mixed with the general revenue.

Well, no David, most pensioners worked and spent a lifetime paying for their pensions. It’s not welfare and, when it was introduced, it was actually meant to be an entitlement. A 7.5 per cent tithe was taken from wages to put into a fund to pay their pensions. Just as workers now have superannuation collected.

What a good idea! Unfortunately (for pensioners) the Labor Party insisted the contributions shouldn’t be kept in individual accounts as in the UK and the US where retirees get the entitlement earned by their contributions. Instead, it all went into one big pot, the National Welfare Fund. And when the pot got really big, the politicians took it.

They won’t talk about the historical facts because these days politicians have developed a new “ending the age of entitlement” narrative while pushing the disingenuous line that younger workers are paying tax to support pensioners.

Menzies was opposition leader when then prime minister Ben Chifley announced a National Welfare Fund to pay for pensions, unemployment relief, child endowments, even health care with a 7.5 per cent tax increase.

Menzies insisted that the Compulsory Contribution (levy) should be kept completely separate; that it should be paid straight into a trust account and not mixed with the general revenue.

The levy and the National Welfare Fund began on January 1, 1946, and contributions were shown separately on workers’ personal tax assessments for 1946, 1947, 1948, 1949 and 1950, with the money paid straight into the special fund from which claims were paid out.

In 1950 the balance in the fund was almost £100 million or $200 million – in today’s money the equivalent of several trillion dollars.


Well, no David, most pensioners worked and spent a lifetime paying for their pensions. It’s not welfare and, when it was introduced, it was actually meant to be an entitlement. Picture: Lukas Coch

But the pot was too big for the politicians to leave alone. Menzies, supported by the Australian Labor Party, amended the Acts governing the fund so the compulsory contributions levy was lumped in with people’s income tax and the whole lot paid straight into consolidated revenue.

But the compulsory 7.5 per cent “levy” was still collected and spent.

In 1977 Liberal PM Malcolm Fraser transferred the balance left in the welfare fund account (by then almost $500 million, or several trillion in today’s terms) to consolidated revenue. But still the 7.5 per cent was taken out of everyone’s pay packet every week.

Then in 1985 the Labor Government repealed Acts No. 39, 40 and 41 of 1945 (The National Welfare Fund Acts) and introduced income and asset testing, thus excluding millions of levy and taxpaying Australians from receiving the pension for which they had paid.

But still the 7.5 per cent levy continued to be collected (while hidden in general income tax revenue.) And to this day it still is collected.

There have been estimates that the trillions of dollars stolen from the fund and the money paid and similarly stolen (sorry, transferred) since 1985 would be enough to pay a non-means-tested pension to every retiree of far more than $500 a week.
If it had been invested, like the Future Fund, the pension might be $1000 a week. Small beer compared with the politicians’ pension deals but a huge leap for older Aussies, 420,000 of whom had their age pensions cancelled or reduced from January 1.

Ironically, they are the very pensioners who would have the highest pensions if their personal contribution to the “fund” was the yardstick as in the UK and the US.

They probably generally have been Coalition voters. But no more.

Spend time in the RSLs, bowling clubs, voluntary organisations and the like, where these people gather and it is clear they are Liberal-National voters no more.

In lieu of an Australian Trump, they see no alternative but One Nation.

The Coalition, supported by Labor and the Greens, has turned 180 degrees from Menzies’ view the age pension is “an entitlement earned by the person’s personal contribution to the fund” and portrays it as charity.

For many Australians this alone shows how far the parties they once supported have strayed from principle.

The arrogant politicians think they can hypocritically and sanctimoniously speak condescendingly of older Australians.

They are in for a shock.

Brian Hale is a former business editor of The Courier-Mail and The Australian
Source: http://www.couriermail.com.au/news/opinion/opinion-arrogant-politicians-should-be-ready-for-a-pensioners-revolt/news-story/4d1511dbf579d8e58261d1fa4d328be5

One Comment Add yours

  1. Veronica James says:

    Politicians, let me state my personal situation. Due to an untenable situation, my mother and father divorced when I was young. Due to this fact, I was placed in a position of having to leave school at 15 years old. I have worked and paid taxes since then apart from a short period on Social Security at age 17/18. I had 2 children without any government financial assistance in mid 1980’s. When my children started primary school I got employment in the state government sector, and have worked and paid taxes ever since. At age 52 my partner went overseas to work to provide for our future. Unfortunately he left me for someone else and I found myself on my own, with minimal superannuation due to our financial separation. It was not my decision, it is difficult enough to deal with this situation and now you are trying to tell me the age pension is an ‘ENTITLEMENT’. I think not, I didn’t ask to be in this situation, I didn’t plan a life of an undecided future based on limited finances. and I’m damned sure I am not the only one in this position. I have managed to put a roof over my head so the government isn’t going to need to support me in that manner, but you will not take away from me the one means of financial support I need to rely on to survive into the future. If you decide that is fair, then come to my house and hand me a euthanasia solution now, as that is nothing less than I expect from the government I have paid taxes to all my life and who have decided that I am not worth being supported in my final years. It was not my choice!!!!

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