Retirement should be about more than just ‘getting by’

The Age

2 February 2020

Eva Scheerlinck

More than 100 years ago, female factory workers in Chicago campaigned for the right to vote and wondered how it could deliver them not only a “living wage” but life’s roses.

Their catchphrase,‘Bread for all and roses too’ – with bread representing home, shelter and security and the roses representing music, education, nature and books – went on to inspire generations of American women, particularly those involved in industrial action during the 1930s.

The notion that the humblest workers have a right to live, not just exist, is just as relevant today. Australia is one of the wealthiest nations on Earth and we all deserve a share of the enormous economic gains of the past century.

This includes retirees, many of whom struggle to make ends meet. And it should be a central discussion point for the Federal Government’s Retirement Income Review, currently under way.

There is no stated objective for our retirement income system in our law. However, the community has strong views on what the objective and features of our retirement income system should be.

Research commissioned by Australian Institute of Superannuation Trustees (AIST) found that more than eight in 10 Australians believe the government should make sure super and the age pension are set high enough so that all Australians have a decent life, free of financial stress, in retirement. This finding is consistent across education levels, geographic location, and voting preference.

Our polling suggests that what most people want in retirement is no different to what the Chicago suffragettes wanted – to enjoy life, not just “get by”. For most ordinary older Australians this means being able to enjoy a weekly coffee and cake with friends, to afford home maintenance, the internet, a car or a footy club membership. They’re not asking for gilded luxury.

In the lead-up to the Retirement Income Review, it’s been suggested that the government’s legislated timeline to increase the compulsory super rate to 12 per cent by 2025 should be halted because the current super rate is enough.

But the modelling done by some researchers who reached this conclusion was based on a full-time male earning above median wages working continuously for 40 years. This is not the lived experience of a great many Australians – potentially more than half the working population. This includes women taking time out of paid work to care for children and family, low-income earners, those priced out of home ownership, many Indigenous Australians, single people and a large cohort who retire involuntarily due to ill health or the inability to find a job in later years.

It has also been argued by some – including a group of Coalition MPs (who, incidentally, receive more than 14 per cent super from their employer) that low-income earners should be excluded from compulsory super and left to fend on the age pension. Meanwhile, the Save our Super lobby group – which also argues that a super rate of 12 per cent is too high for people on low incomes – has called for the $1.6 million tax-free cap on pension accounts to be abolished or raised to boost retirement income for Australians with more than this amount in their super.

There is no shortage of opinions on how super and the age pension should work together. Despite the age pension having been around since the early 1900s and compulsory super for three decades, we still lack consensus on whether super is there to supplement or substitute the age pension. But surely one thing we should all agree on is that in egalitarian Australia, the land of the fabled fair go, all Australians, regardless of income or address, have contributed to our nation’s success and deserve a decent life when they finally lay down their tools.

Eva Scheerlinck is CEO of the Australian Institute of Superannuation Trustees.