Pension changes labelled “savage” by business columnist

No doubt you’ve read some of the commentary surrounding the government’s changes to age pension. Now a business columnist for
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No doubt you’ve read some of the commentary surrounding the government’s changes to age pension.

Now a business columnist for the Australian has had his say – and he didn’t hold back.

Read more: How the latest age pension reforms could affect you

Robert Gottliebsen, a veteran finance commentator, has described the changes as “savage” and writes that they’re “badly designed”.

He believes the changes will actually substantially increase the long-term pension bill and that the Prime Minister and treasurer should take a holiday and not come back until “well into January”.

“In mid-December, some 313,000 middle class Australian savers will be told that their government pensions are to be savaged and that they will have to adopt a completely new financial plan,” he writes.

“Let’s assume that each one of those Australians has two close family members or friends, so, there will be at least one million Australians white hot with anger.

“But it gets worse because the changes were designed by remote Canberra public servants who have little knowledge of the way retirees think and act (outside those on gold-plated public service pensions).”

Read more: How you can prepare yourself for changes to the age pension

But Gottliebsen isn’t surprised by the “attacks” on the pension.

In fact he’s compared them to the failed proposal to change superannuation laws, and believes they were designed by the same people.

“It’s only recently that the savagery of the pension attack was understood,” he writes.

“Few young journalists are interested so the vast bulk of the 313,000 people to be hit will discover that their lives have been changed just before Christmas when they receive their letter from the Orwellian-titled “Human Services” minister Alan Tudge.”

After breaking the down figures, Gottliebsen argues that the government is basically telling people “they should begin to live on their capital and, as they do, that their income will be protected because they will get a greater pension”.

“The Canberra mandarins are also effectively telling them: “Do not down size your house”. That will release cash into the asset test basket and slash your pension,” he writes.

“Many financial planners will be telling their clients to go off and have some cruises and let the government increase their pension.

“Gifting to your children is very dangerous. Investing in your home and perhaps borrowing on it makes more sense if you don’t like cruising.”

He believes the government is deliberately discouraging savings for “millions of Australians”.

“While the current government will save some money in the short term, over the long term, the pension bill will skyrocket because people are being encouraged to lower their self-reliance,” he writes.

What do you think of Gottliebsen’s column? Do you think he’s on the mark?

  1. Paul Turner  

    These changes are made by public servants and approved by pollies who live in rarified air. They are totally immune from the day to day worries of “will I have enough to live on” as they retire on fully indexed schemes, looked after by someone else. All of their financial cares are removed unlike most of the “ordinary” person.

    • Laura Di Cori  

      I fully agree, the people making these decisions don’t live in the real world. If I had a retirement fund like all the polies I would be one very happy camper.

    • Alexis Viles  

      We again note that no changes to the politicians payments or entitlements including the no longer in office group. Why were these issues not addressed before pensioners were again ripped off.

  2. Max  

    He is spot on. The current asset pension rates should not be changing. We set up our financial affairs around the existing rules at the time, so I believe the rules should not change mid stream. I will not be voting liberal next time.

    • K moore  

      Agree totally we worked out our budget only to find that the rug has been pulled out from under us so now looks like we will be winding up our smsf so we can save on the accountant, ato, and audit fees saves us about $3000 per year maybe the private health fund might have to go

    • Joy Anne Bourke  

      Max, if you voted Liberal that is your fault. I would never vote for them as every time they take from the most vulnerable and pensioners who have saved for their retirement. Turnbull lied all through the election, and I knew that because he had already tried a lot when he first got in and left it, if he got in these were going to go ahead.

    • Sandra Workman  

      Why did you vote for them at all? They will never look after anyone but the elite.

    • Alec McCracken  

      Labor won’t reverse it as they supported the changes, so changing your vote next time won’t make any difference.

  3. Pamela  

    As an ex-Public servant, let me tell you that 90% of Govt pensioners are on $20, 000 or less, especially women who had limited working lives and lower salaries anyway. Some senior public servants have good pensions, but they also had high paying jobs! Don’t forget that public servants contributed to their pension for their first pay packet as well as paying tax. I paid 5% of my salary for the 30 plus years of my working life – the fact that the government of the day spent it rather than laying it aside for future payouts was beyond my control. Gottleibson has his facts wrong about the liability for public servant pensioners, but refuses to correct his errors even when advised of his inaccuracies by reputable sources

    • Pamela  

      Must correct my own inaccuracies – should have said ” that 90% of CSS Govt pensioners are on $20, 000 or less”

      • Chris  

        Sources for that please. CSS depends on when you started work, so how long you were in the scheme,; your salary for the last 12 months before retirement; whether you went out on the 54years and 9 months provision or whether you stayed until a later age – leavng earlier than 60/65 meant you got less pension. You also got a full refund of all of your contributions right back to the beginning of your contributions, with interest, plus the employer contributions with interest that you could rollover into an investment scheme or a self managed super fund – or you could spend it or take a higher pension. And yes, people with less than 20 years in the CSS got lower pensions. Women most certainly were badly off under almost any of the APS schemes when they had to move in and out of employment and they are the most likely to be the ones on low pensions. Not sure that the claim of 90% stands up and APS staff in the CSS were much better off on retirement than almost any other sector of employment other than politicians and CEOs.

    • Ailsa  

      As another ex public servant I have to agree. People also forget that public service pensions are not properly indexed, unlike the politicians’ pensions and we have been told to make up the difference with the old age pension.

  4. Rod Tonkin  

    As usual the Nerds in Canberra did not consider what action the retirees will take; a spending spree and or ditching private health insurance. Both of these will in the long run cost the country more than the perceived savings.

    The government and its adisers are starting to make the Submarine Corporation, a previous defense minister would not trust to build a row boat look effective

  5. Truth 13  

    New regulations are planed, proposed & passed through the parliament by DUDS, who has no knowledge of what is going on in the country. I know over 200 old couples, in their 70s & 80s, who worked hard, saved a bit and about 40 years back, they bought investment properties, a unit around $20,000. (In fact, although I am not old as them, I too bought a 3 BR house, the block of land is 630, in the Inner West of Sydney, in 1985, for $ 110,000, which is now worth about close to $2 million). All those old couples, bought Units in Canterbury, Campsie, Liverpool, Blacktown, which are now worth well over $500,000, and most of them get a rent, around $450 a week. After Agents fees, Insurance, Council rates, most of the couples end up with less than $350 a week. Due to the value of the Unit they own & the very small rent they get, they end up getting NOTHING from the government. Most of them have no other income. What the government will do is to get them to live like beggars or force them to sell their only other asset. The DUDS in the parliament should check, whether they too get a pension, if they have more than $800,000 assets. There shouldn’t be one rule for the masters of the politicians, and another rule for the servants of the people. What have they done to the country, in the last 50 years ?. Only thing do very well is Tax, Tax, Tax, & Tax. Why should there be a “Stamp Duty”. For what ?. If the government charge a student to study in a university, which will help them to get a better paid job, why aren’t they are allowed to claim it as “Work related expense”. If they don’t study, probably they will end up paying much less tax, or government will be paying them when they are unemployed. It looks, a bunch of idiots are running the country.

    • Joy Rhodes  

      This government is a shambles. If any of them were employed in private enterprise they would not make the grade. Trouble is, if you can hire them you should be able to fire them. And it takes too long before that happens, and we have successively been run into the ground by well paid buffoons. And nothing is about to change. There’s more of them just waiting in the wings!! I will never ever vote again for either of the top 2 parties, I will firmly vote for independents. These fools are so out of touch with the community they have no understanding of what the consequences of their bad decisions are making all over the country. We are in real trouble.

      • Sandra smith  

        Agree entirely with you Joy Rhodes I will never vote for the top 2 parties either,they should be sacked

    • Joy Anne Bourke  

      Truth 13, I agree totally. There should be no retirement pensions or perks for pollies, if they have more then the scale that they are using for normal people then they should have their perks and pensions stopped.

  6. Bruce Taylor  

    Can anyone explain why politicians get a pension from the time they leave parliament regardless of their age?
    Can the politicians explain why their pension and other benefits are so much more than a person who has worked his whole life?
    Let’s face it if we were to pay politicians according to their performance there are very few who would receive the basic wage.
    Our country is wasting millions each year rewarding mediocre performance and paying pensions to people who have not yet reached the age that they require the rest of the population to attain before becoming eligible for a pension.
    It is criminal the way they keep on increasing their salary and perks when if they were required to prove the worth of the claim they would have to settle for a decrease.

    • Pamela Wintour  

      Very well said Bruce.
      For many years, I have suspected that 90% of Australia’s adults agree with you.

      • I would sack these incompetant ones, especially those that are under the influence of the hard right, who are quickly (not slowly) destroying our way of life. High unemployment, very high levels of poverty, a medical system in shambles, call centres for vital services based overseas with personnel who can barely speak understandable English. This government can barely fight themselves out of a wet paper bag, let alone run a government and an economy with commen sense. They just blindly stick to economic jargon and ideas that have been disproved decades ago. income cuts to the poor, tax relief for the rich. How stupid can they get.

    • Joy Anne Bourke  

      Bruce I totally agree. They will not look at that as Politian’s are out to help themselves and their mates now not for the people. Turnbull is not listening to the people.

    • Jennifer Griffiths  

      We agree, and why do the polies not have to pass an assets test as well, cant be one law for them and one for us we have contributed tax all our working life and still are paying tax, we should be entitled to a pension. Politicians should be made to live on the same pension as everyone else. The country cannot afford to keep them.

  7. Phil Craig  

    I am a retired CSS pensioner and it always peeves me that to get any pay rise, a public servant had to give something up, but the politicians do not have to give up anything for their pay rises.
    I also believe that politicians should not receive any greater pay rise than those they force onto the APS, and if they have not had a successful negotiation for an APS pay rise then that minister should also miss out until such time as the pay rise has been successfully passed.

    • Pamela  

      Good thinking … or dreaming ….

  8. Jan Bradley  

    There is now no rewards for working hard and planning for you retirement, we are just penalised ,because we own a car , caravan and have some money aside we are deemed wealthy, somy advice is have nothing,you’ll get supported by the government and what enrages me more is all the people on the dole, refugees and anyone else get the handouts, but 6th generation Australians get the boot.

    • Jennifer Griffiths  

      So true Jan, we also worked hard, saved, and are now being penalized, yes stay on the unemployment, or come in as a refugee and never work, and get handouts after handouts and these people will still get a pension.

  9. Kym Crossman  

    Only got ourselves to blame. We sit on our buts complain with self pity. Previously people would role up in tne 1000′ s and protest and distrupt parliament Centerlink and local politicians offices.
    But now our butts rremainin our seats.
    Keep in mind it was our generation that rasied these out of touch people we voted in.
    I am further amazed why the goverment keep resistng laws to allow us to end our lives given they seem to want us to die of lack of food and medicines. Maybe they look at it as payback to the oldies who raised them.

    • Elaine Elodie  

      Kim, you are right – we older Australians should be outraged (I know that I am) and act accordingly. Although not rich, I won’t get a government pension and feel sorry for those will be financially hit and hurt. However, my transition to retirement financial arrangement will suffer and with such low interest rates our retirement will not go as smoothly as we had planned.

      Has anyone any ideas what we can do as a group? Who can we harass? Suggestions very welcome because I am truly VERY FED UP.

    • Anthony John Symes  

      I agree we have ourselves to blame. A small suggestion might be that ALL of us affected by these changes write a stern letter to our Federal MP, demanding a public explanation on the differences ( i.e. amounts paid, asset/income tests, entitlements etc ) between politician pensions and ours. And if this doesn’t happen – why? Perhaps another letter asking such.

  10. Stephen  

    If you voted for this Coalition government, then you are entirely to blame. Don’t tell me Gillard/Rudd, that’s long gone. Don’t tell me Shorten is no different, he is. And certainly don’t tell me you always vote Liberal /National, that is a crime of pure apathy. You personally are directly to blame for the most inadequate self seeking bunch of ideological morons we have ever had to endure. They have almost quadrupled the deficit, and put levels of hardship on the ordinary people of the most financially secure nation on the planet through totally hopeless mismanagement, and it is only getting worse.

    • Nellie  

      Totally agree… Howard wasted billions on wars which had nothing to do with us….and the wars are ongoing….so still costing us billions plus dead and injured soldiers….He and his mob wasted our mining boom…. Norway had a resource tax and now have over 900 BILLION in their sovereign fund….We have empty holes and gross pollution which eventually the Australian taxpayer will have to fund to repair…Our children can’t get jobs.they are saddled with huge HECS debt and then can find no work in the discipline in which they have studied… Casualisation of the workforce continues…Full time job numbers fall… In a country/ continent with a small population we have ever increasing poverty and homelessness.. The Liberal/ Coalition is now a party where the religious right rules….Ordinary Australians are falling by the wayside….Our real estate is being bought up by foreigners and investors with bottomless pockets… Anything of value is being privatized and sold off….People are losing heart….The Coalition ALMOST lost the last election….Turnbull is a major disappointment….He seems to have no political nous at all….A fellow like Ben Chipley would now not even win preselection…just a train driver…..The old politicians were a different breed to the types we get now… No commonsense….no love of our nation….no empathy with ordinary, honest Australians…

    • Jennifer Griffiths  

      So true Jan, we also worked hard, saved, and are now being penalized, yes stay on the unemployment, or come in as a refugee and never work, and get handouts after handouts and these people will still get a pension.


      Stephen, we voted for the Coalition for one good reason, ie: to keep the loathsome, union controlled, Labor scumbags from subjecting this country to another period of economic devastation and abject corruption as they have displayed since the time of the despicable Whitlam.

  11. yvonne Jackson  

    The Greens supported this change, which allowed it to be passed. One of the reasons why they lost votes in the election.

    • kenneth morgan  

      labour liberal and the greens will be wiped out next elections we will see Pauline in

  12. Judy Whelan  

    I have written about this issue before. I will lose $5000 per year from my single part pension. I am not wealthy by any stretch of the imagination. I have assets of around $400k. My meagre superannuation was accumulated in the days when women had no equal pay. ( I know, I know… that is still the case ) but this was published different pay scales and in some companies women were not even offered superannuation.. The amount of my income after 1 Jan will equate with a full pension If I don’t draw down more of my super. Little wonder why this will encourage people not to save and I ask myself why did I bother. Another thing that riles me is they publish it as only 365,000 people are affected like it is the rich and at the same time bump up the pension itself by a few dollars so people don’t challenge them. GRRR

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