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 Retirees are taking the biggest hit

22.05.20. Normally, MM skips anything the supercilious Peter van Onselen scribbles as worthless drivel. He is in the failed prognosticators camp with that other dope Flannery. Who will forget Peter’s beauty saying Morrison had no change of being elected, it would be his idol Shorten who was already moving his gear into the Lodge. However, perfect Pete is close to the money in this article and a little more talk with those retirees now living below the poverty line would have carried more weight.
Spare a thought for self-funded retirees in these difficult times. Not only are they in the age bracket most at risk from the virus, but their financial wellbeing in retirement is being put at substantial risk. The collapse in the stock market, including among most blue chip stocks, is just the start of their financial pain. These big businesses, even if they survive, aren’t likely to pay out the dividends they once did for years to come, if ever.

Source: We regret: Peter Van Onselen, News Corp

Retirees facing financial as well as health risks in coronavirus pandemic

The financial plans of self-funded retirees are built around dividend projections which therefore no longer apply, and with interest rates so low its not as though they can simply transfer their saving into cash accounts and do any better.
The RBA cash rate is at a record low.
The difficulties self-funded retirees face in low interest rate environments is the flip side to the benefits those of us with homes loans get from lower rates for borrowing.
Lower interest rates has become a way of life, but the prospects of rates surging north again anytime soon seems unlikely. Even if it does happen, it will only be in conjunction with inflation, which erodes spending power at the same time.
On the policy front, there isn’t much there for self-funded retirees to cushion the blow. While Jobseeker and JobKeeper are doling out tens of billions of taxpayers dollars to keep working age Australians in jobs or at least above the poverty line, self-funded retirees are getting no such support.
Even pensioners have received a boost to their pensions to help them get through these tough times. But the self-funded retirees who voted en-masse against Bill Shorten and his franking credits policy have become the forgotten people among Coalition supporters.
Their loyalty hasn’t translated into being looked after now. And because Labor is still licking its wounds from last year’s May election defeat, it hasn’t exactly been inclined to highlight their plight and put pressure on the government to do something to help this large voting cohort.
Rather, Labor has focused its attention on the plight of many casuals who are missing out on JobKeeper, and the university sector which isn’t eligible for the payments. Or childcare users who would benefit from free childcare continuing for longer. Or workers for foreign companies ineligible for JobKeeper. Or indeed anyone who might benefit from Newstart not returning to the low levels it was pegged at previously.
What about self-funded retirees? They truly are the forgotten people in this crisis. Taken for granted by a government that would not have won the last election had it not been for their support. Forgotten by an opposition that has written them off politically.
While I have long been critical of the unsustainable tax breaks for many older Australians, especially those with very large savings, the self-funded retirees who only just miss out on a part pension and concession card benefits are the ones caught in the middle right now.
As Ian Henschke from National Seniors has pointed out, some self-funded retirees — because of this crisis — are now drawing on an annual payout from their investments lower than the annual pension. To survive they would need to draw down their savings right at a time when their value has been halved. He wants to see discussion about legislating a universal pension in the wake of this crisis to ensure that can’t happen.
Whether that is a long-term solution or not is debatable — indeed whether it is fiscally viable is highly debatable. But there is little doubt this cohort of senior Australians deserves more than the cold shoulder.
Especially from a Coalition government.
Peter van Onselen is a professor of politics and public policy at the University of Western Australia and Griffith University.

{ 6 comments… add one }
  • Botswana O'Hooligan 22/05/2020, 7:59 am

    Tell me all about it, 61 years of working for a crust, being self sufficient all the while and in retirement, investment value down by over 600K, cash to buy a retirement hovel dwindling away and the RBA talking about negative interest rates, and Morrison et al saying “trust us.”

  • Lorraine 22/05/2020, 8:23 am

    There is one person that diddled me , that if this happens to them Karma. but these self funded will end up on the old age pension. That is the safety net in Australia.

    • Albert 22/05/2020, 8:36 am

      Lorraine, since the government stole the aged pension funds and defence forces pension funds years ago and blew the lot on useless endeavours the so-called safety net is on very shaky ground.

  • Botswana O'Hooligan 22/05/2020, 8:48 am

    I can’t figure them out (government) for the very people who worked and saved paid lots and lots of tax and are not eligible for a pension in old age whereas a dole bludger who had idled along all his/her life, is. I know people on the pension who are rorting the system because the system allows them to do that, but life is like that and no one is a saint. The system would be much more fair if everyone got a pension as do the K1W1’s, Poms, French, Germans, Russians etc.

    • Rossini 22/05/2020, 10:25 am

      Agree whole heartedly.
      Trouble is that Australia is broke now!
      Can you imagine the bitching the left wing press would carry on about giving cash to the well off.
      At least there would be less underhand reporting of assets.

  • Big Al 22/05/2020, 11:29 am

    As I’ve said before, all ewes who still have a super account, beware, be very aware, the guvmint’s comin’ after your loot as they can see easy pickings from the trillions (notionally, perhaps) still invested in the rorts run by the big-end of town, and the unions to boot.

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