Corporate tax can aid the aged

April 04, 2018

Social security and welfare take the biggest slice of the Federal Government expenditure.

Is that another grey hair?

I hate getting old but, unfortunately, I have not found the cure for it as yet.

Notwithstanding I shall keep looking for some Dorian Gray substitute or perhaps I shall resort to the modern equivalent of Bex, a cup of tea and a lie down.

At this juncture, I may need to. You see, I have reached a point in life where I am old enough to apply for a pension but by virtue of the points of eligibility I don’t qualify and the Federal Government wants to make it even harder for the likes of me ever getting it, I own two houses albeit, one of them is overseas and waiting for a buyer.

Sometime last year Senator David Leyonhjelm, the crossbench Senator from South Australia, was callous enough to call for a restriction on the pension on the basis that pensioners should feel a sense of shame in taking a pension since it showed a lack of life planning by the recipients.

But the simple fact of the matter is about 2.4million people across Australia — about 10 per cent of the population — now receive the aged pension. According to Centrelink data, Shepparton district swings the pendulum higher with about 20000 grey hairs, which is nearer to 20 per cent of the population.

We are an aging community.

The original concept of the pension, established almost 110 years ago, is interesting.

It was to provide every person over 65 with a sustainable income, at that time about 25 per cent of the basic salary or $52 a year.

It has moved on since then but it still is less than 10 per cent of what Senator Leyonhjelm is receiving as a point-of-entry politician.

During the last war, then prime minister Ben Chifley did a sleigh of hand with taxation and finding a means of paying for the war effort without raising taxes by creating a National Pension Fund that was subsequently brought into consolidated revenue by Robert Menzies sometime early in his leadership.

While the pension fund accumulated more than it was paying out, it was too good to simple leave there when they had other debts.

The aged pension is without doubt the largest component of the social welfare bill.

Projections for this year are that it will cost an estimated $69billion, and along with all other disability and support pensions make up 42 per cent of government spending, not including GST distributions.

Australia, like many other OECD countries, is an aging population. We are no longer having nine kids, now couples are lucky to have one, the average family size being 2.4 people.

Now, there is no going back on our aging population. We need more people, of course, which is the premise behind increasing our migration numbers rather than decreasing them.

We also need to look at the means of paying for it all.

Getting a better deal with corporate taxes would be a good start.

There are not many of them. However, some of our largest and most major companies, through various international tax arrangements, are currently paying no tax here in Australia in preference to paying lesser amounts in places like the Cayman Islands or Singapore. If they were paying the tax here, it would cover a large chunk of the social security bill.

It is somewhat ironic the government wants to further decrease the corporate tax bill. This begs the question: Who are they working for?

When you work for 50years or more and contribute to the national income, it is possibly reasonable that you might expect to live at a level something more substantially than a Third World income.

- Steve Hutcheson is a retired engineer and former UN aid worker who lives near Rushworth.

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