Welcome Tax Discussion Needs A Tandem Review Of Retirement Incomes

Older Australians will welcome a discussion about Australia’s taxation system which feeds into an independent retirement incomes review to ensure an equitable, sustainable and stable tax and income security system for all retirees.

Ian Yates, Chief Executive of leading seniors advocate COTA Australia, said the Tax White Paper process launched by the Treasurer today is very welcome, but looking at tax in isolation from the rest of the retirement space would be a missed opportunity.

“The advent of an ageing population requires thoughtful and coordinated planning and we have a great opportunity now to get it right for current and future generations,” Mr Yates said.

“Consideration of the Intergenerational Report and now this tax discussion paper are great first steps in taking a more holistic view of the challenges and opportunities as our demographics change.

“Starting the taxation review process with a Discussion Paper and then the formulation of Green and White Papers is a welcome process which allows both experts and the broader community to contribute to making any final reform the very best it can be.

“It’s a shame such a process has not been employed for retirement incomes. Instead the government chose to announce harsh and unfair changes to the pension in the 2014 budget without consultation.

“The Treasurer needs to put a break on the proposed pension changes now and ensure this considered approach to tax reform is run alongside a considered and coordinated retirement incomes review, so we don’t end up with another piecemeal system which favours some groups of retirees over others.

“This would avoid the situation we have now where pensioners, those who can least afford it, are being hit with cuts while wealthy retirees enjoy lucrative tax concessions.

“Looking at just tax concessions without broader consideration of such things as pensions, aged care funding, and mature age employment issues makes no sense.

“There is still time to run an independent retirement incomes review in parallel with Tax White Paper process and we encourage the Treasurer to take this option.”

Mr Yates said he would also like to see more emphasis on the benefits of taxation.

“The fact is that tax is the way that we as a community pay for infrastructure, services and assistance that we agree should be delivered by government and are better done by government than other means.

“Taxation needs to be sufficient to ensure that it meets the expectations of government by the community so we minimise the need to choose one essential service or vital piece of infrastructure at the expense of another. ”

Media contact: Ian Yates 0418 835 439, Olivia Greentree 0439 411 774.

COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.