Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I do understand that, Senator Ronaldson. Access to the retirement income, as I have said, could conceivably have been achieved by these people at the age of 40 and they could have then gone on to have another career. Another really important thing that happens in this particular set of pension arrangements is that 99.5 per cent of people have commuted to a lump sum. I am not foolish enough to believe that that is not a win-win for both the provider of the pension and the recipient, though it is probably a job for an actuary to work out whether giving a lump sum or paying someone over the whole of their life is the cheaper benefit. But 99.5 per cent have chosen to take a lump sum, up-front, and therein lies the figure which has been put out here today of $24,000-odd for the pension. It is not subject to market fluctuations, is to be paid for all their life and to pass on to their next of kin.

So if people are going to come in here and get high and mighty and righteous about it, we really have to talk about the correct situation, as it exists. To put it quite simply: the proposition that a military superannuant who has retired at age 55, having received a lump sum payment of $200,000 or $300,000 or $400,000 or higher, and has an annual non-means-tested superannuation payment of $40,000 or $50,000 or $60,000, should have that annual superannuation payment indexed in the same way as an age pension is not something that I am supporting. Clearly, we need to treat an apple as an apple.

If we were able to digest all of the information that we get in this place on any given day, one of the really important pieces of information that has come across all of our desks this week was from the Actuaries Institute. It was entitled 'Australia's longevity tsunami'. Its opening paragraph in the executive summary sets up some of the problems that any government is going to face in this area. It said:

Australia is experiencing a major demographic and societal transformation. By 2050, almost a quarter of the population will be aged over 65 compared to 14 per cent now. Australians are already one of the longest lived populations on the planet, and our longevity is steadily improving.

Australian life expectancies are rising much faster than commonly understood and this has serious social policy implications—especially in economic, retirement incomes, health and welfare policy.

Anything that is done in this area will be tested against the ability of another group in our community to run and win the argument.

All governments should recognise that we may face an electoral tsunami if we put the wrong foot forward in this space. The baby boomers will vote and they will probably get a result that they enjoy, but the fiscal responsibility argument will not go away.