Age of Entitlement – Unsustainably Extended

It’s clear from actuarial forecasts that the Government is on an unsustainable course with ‘welfare’.

Circa 1910, the Federal Government introduced a welfare payment scheme to essentially help feed Australians who were; 1/ living below the ‘poverty line’, 2/ living well beyond their life expectancy and 3/ were too old to work.  This scheme still exists today and is known as the Aged Pension.

The Australian Aged Pension in 1910 was subject to a residence qualification of 25 years and was available to men from age 65 and women at age 60. Life expectancy in Australia for the period 1901–1910 was 55.2 years for males and 58.8 for females.

Today, 106 years later, life expectancy has improved by about 30 years, to approximately 85 years (or 75 if you are an Indigenous Australian) yet surprisingly the Aged Pension still remains available at age 65. So based on these statistics, it is understandable why the Government is starting to progressively move the Aged Pension qualifying age up to 67 years as well as undertake a number of other welfare reforms.

We are starting to see more onerous qualifying rules in many areas following the Review of Australia’s Welfare System (McClure Review); the purpose of which was to “identify how to make Australia’s welfare system fairer, more effective, coherent and sustainable and encourage people to work”. We are being told to be more responsible for our own financial well-being and to aim for a higher standard of living, well above the poverty line where the Aged Pension sits.

Crucial to framing an incentive to achieve financial independence in retirement was the Keating Labor Government’s 1992 introduction of a compulsory superannuation guarantee system as part of a major reform package addressing Australia’s retirement income policies.

The new reality is that we need to be accountable for funding our lifestyle when we cease working (or retire), unless of course you are content with living on the poverty threshold by relying on Government welfare to survive i.e. approx. $35,000 per annum per couple (Aged Pension).

Australia’s median gross household income in 2013-14 was $80,704, some 130% above the Aged Pension entitlement. So what does ‘financial independence in retirement’ actually mean in dollar terms and how much ‘capital’ do we need? Clearly we all have different circumstances but the point is that in reality, we need extremely large amounts of ‘capital’ for a below average retirement ‘income’.

For example, the levels of capital ‘self-funded’ retirees need to enjoy a joint sustainable indexed pension of $50,000 p.a. is a tidy ‘nest egg’ of approx. $1,000,000.00 (30 year annuity assumes 4.75% return, 2.00% inflation).

Given the magnitude of these numbers, you would think that the Government would introduce policies that complement their welfare objectives, but not so. If you read the 2016 Federal Budget glossary it states “In the 2016-17 Budget, the Government announced a package of reforms designed to improve the sustainability, flexibility and integrity of the superannuation system. It set out a clear objective for superannuation: ‘to provide income in retirement to substitute or supplement the Age Pension’ which guided the superannuation changes”.

So what was the Government’s significant reform to superannuation? They reduced the amount you can invest in superannuation by approx. 42% per annum yes, totally illogical and contrary to the policy objective.

This naive, theoretical, bureaucratic nonsense that apparently asserts ‘less is more’ reflects very poorly on the judgement of our Governors, particularly if we are to believe the notion that ‘simplicity and clarity lead to good design’. So what is going on?

NB: None of the above applies if you are a retired Politician, Government Bureaucrat or Public Servant, with taxpayer-guaranteed defined retirement benefits.

1st November 2016

Human Rights, 8 Commissioners & 18C’s

There seems to be a lot of noise and discussion about repealing or overhauling Section 18C because of claims that it restricts freedom of speech and also diminishes the right to a fair trial.

Section 18C of the Racial Discrimination Act makes it unlawful for someone to do an act that is reasonably likely to offend, insult, humiliate or intimidate someone because of their race or ethnicity.

It seems to me that perhaps the problem isn’t so much with the law but rather the bureaucrats at the Australian Human Rights Commission (AHRC) who allow the ‘intent of the law’ to be abused by entertaining vexatious complaints. The AHRC misguidedly believe they are instigating audacious actions against Australia’s vilest bigots and racists, who are in their opinion a couple of young honest university students in Queensland and a  respected Cartoonist/Artist. The AHRC clearly don’t get outback much!

The AHRC mustn’t have much to do if these cases are the absolute worst racial discrimination injustices in Australia needing prosecution. Their actions actually diminish the integrity of 18C, and I question how they justify their existence: whether taxpayers are getting value for money; whether the AHRC is contributing to the betterment of our society and whether these bureaucrats are meeting the public’s expectations?

So what is really going on out there? The head of the Prime Minister’s Indigenous Advisory Council, Nyunggai Warren Mundine’s recent article in The Australian details the crimes being committed against indigenous women and children, violent physical assault, death and abuse perpetrated against people who cannot protect themselves. Yet we continue to tolerate inept bureaucratic ‘Government Agencies’, like the stewards at the AHRC, who fail in their responsibilities to protect the human rights of truly vulnerable Australians.

That is why the spurious actions of the AHRC have the effect of diluting the efficacy of 18C; suppressing debate on the real injustices occurring in remote indigenous communities and empowering the predators and abusers who perpetrate despicable assaults/crimes against indigenous women and children.

The contemptible indignity of it is that while indigenous women are being brutally beaten to death, the Australian Human Rights Commission is preoccupied with people who have had their ‘feelings hurt’…shameful!

To add insult to bereavement, taxpayers fund the AHRC to the extent of approx. $23,000,000.00 p.a. The average remuneration of an AHRC employees is approx. $140,000.00 p.a. so you can see that the ‘fat cats’ certainly look after themselves and you can also understand why there is no money left for the victims of the real injustices perpetrated against indigenous communities.

Why does the AHRC muzzle the truth by suppressing debate and shutting down free speech, which has the effect of continuing to deny traditional Australians their basic Human Rights?

1st November 2016.

Unroyal Abuse Commissioned – Good for $ome, Your Honour

There are some things that are so wrong that it’s just easier to ignore; dare we risk feeling that deep nausea stemming from our moral conscience. A bit dramatic, but our Government and the bureaucrats that they appoint represent us and we cannot abrogate our responsibility with silence.

Example:

The Government recently appointed the Royal Commission into Institutional Responses to Child Sexual Abuse. While the ‘terms of reference’ start out by saying that ‘all children deserve a safe and happy childhood’, it’s basically a historical investigation into sexual abuse in Australian Institutions over the last 50 years where the perpetrators are now either dead or in jail.

So why has the Government spent $502,800,000.00 on a Royal Commission that does not even address the horrendous crimes being inflicted on children right now? Why are we excluding the most vulnerable people in society just because they weren’t abused in an institution?

Some would say that the most vulnerable are those Aboriginal children in remote communities, conveniently outside the terms of reference of the Royal Commission.

The Australian Institute of Family Studies publication (October 2016) estimates that less than 30% of all sexual assaults on children are reported and that the reporting rate is even lower for Aboriginal and Torres Strait Islander children. In some states, it was concluded that the sexual abuse of Indigenous children was widespread and grossly under–reported, with an estimated 88% of all sexual assaults in Aboriginal and Torres Strait Islander communities going unreported.

So, not being able to accurately define the extent of the problem is apparently a good enough reason to exclude the most vulnerable from the Royal Commission’s terms of reference even though they advocate that ‘all children deserve a safe and happy childhood’.

So do taxpayers think they are getting value for money ($502,800,000.00)? Like most things involving Government, all the budget goes towards administration costs (the bureaucrats) and very little gets to the pointy end of the problem.

Perhaps another Royal Commission in 50 years’ time will adequately explain to victims why we did nothing while they were being raped, only this time we can’t pretend that we didn’t know about it.

31st October 2016

Cereal Charity & the Corporate Box

Does anyone here think they are paying too much tax? If so, are you looking for a solution to minimise your taxation using the same method that has been mastered by the Squires at the top end of town?

Well, you won’t be the first, but at least have a think about establishing a tax-exempt charity or possibly a religious institution as a solution. After all, there are only about 60,000 in Australia, largely unregulated, highly duplicated, with a value of about $60 billion p.a. and most seem to be dedicated to curing cancer or promoting causes in the name of religion.

So what is actually going on here with approximately 2,000 new tax-exempt charities each year? Is there an epidemic of philanthropy contaminating the wealthy or has this something to do with minimising tax?

Well, one thing is for sure: it’s certainly not about cash going to charity, its about Tax minimisation where you claim all your socialising costs (attendance at a major high-profile gala, sporting events, theatrical openings, fundraising balls and general entertainment), as deductible expenses, all written off to your charity.

Then, of course, you employ all your family and friends to work and administer the charity on generous remunerations, all at the expense of your charity. Ever wondered why like-minded charities with the same ‘cause and purpose’ never amalgamate to ‘gain synergies’ and reduce administrative costs? It would be counterproductive for these individuals even if the charities beneficiaries stood to gain! It doesn’t seem to matter to the Australian Tax Office that in many cases, very little money actually goes to charity.

So, the next time you are eating your tax-exempt Weetbix, have a think about why a company with revenue of $300 million p.a. is exempt from tax!

30th October 2016

Why Are Government Regulators Not Working?

Why is it that the ‘bureaucracy’ in this country is failing us all so miserably?

For example, I keep hearing from the press and politicians that we need a ‘Royal Commission’ into the Banks. If this is true, is it because the bureaucrats have failed to do their job to enforce standards in the financial services industry?

We are all burdened with and pay for multiple layers of heavily duplicated, bloated, inefficient and costly bureaucracies that are responsible for monitoring the behaviour of financial institutions.

So why is it that the bureaucracy has failed to proactively protect consumers? Is it because they continually align themselves with Government as they blame ‘industry’ for their incompetence, even though ‘enforcement’ is the purpose of their existence?

If these reactive governmental ‘corporation police’ are responsible for the governance, compliance, licencing, protection, implementation and enforcement of legislation, then apparently their political masters don’t think they are doing a very good job.

I don’t know what the likes of the Australian Competition and Consumer Commission (ACCC), Australian Prudential Regulation Authority (APRA), Australian Taxation Office (ATO) and Australian Securities and Investments Commission (ASIC) have been doing. Are these agencies so incompetent that a Royal Commission is warranted?

Perhaps a Royal Commission into the Banks might expose the bureaucrats for what they ‘are not’, although I doubt that would happen as it appears that the public sector’s inefficient and incompetent structure is by design, as governments choose to maintain the unsustainable practice of over-staffing and charitable employment policies, to reduce the official unemployment statistics, rather than be serious about proactively protecting consumers.

So a Royal Commission will achieve what? History has shown that recommendations from Government Inquiries or Royal Commissions are rarely adopted and mostly ignored by the politicians who appoint them in the first place.

In the final analysis, a Royal Commission is just another expensive exercise that allows politicians to be seen to be doing something without changing or achieving anything, other than further increasing the size of the bureaucracy.

Perhaps the real rort isn’t what banks do with shareholders’ money, but what the bureaucracy does with taxpayers’ funds! I don’t know anyone who thinks we are getting value for money.

Perhaps politicians should appoint a Royal Commissioner to have a look into the misappropriation and squandering of millions of dollars in public funds by the likes of APRA, ACCC, ATO and ASIC?

29th October 2016