The Gratton Institute, an independent organisation which publishes on economic factors in Australia, has supported the Productivity Commissions view that pension changes are necessary. But they go much further.
They identify that there is a structural budget problem that will get worse. Namely the financial commitments of the government in the future to pay pensions and benefits far outweighs the revenue they will receive in years of normal economic activity with the current tax regime. The result will be a persistent budget deficit.
The Australian tax system is a mess. Nobody really understands it and it is full of concessions to vested interests which are politically difficult to change.
None of this is new. The Henry Commission pointed this out in 2008. What the Gratton institute want is a higher pension age, restrictions on accessing superannuation funds, an extension of the GST to things like food and education and a cutting back on tax concessions.
The 'demographic time bomb' is a very real threat to the budget. The debate on how to deal with it is now getting into gear and may dominate the next Federal election.
No comments:
Post a Comment