INDEPENDENT AGE PENSION TRIBUNAL
OUTLINE OF ENABLING LEGISLATION
Currently, the annual cost to government for the provision of an Age Pension in Australia is in the vicinity of fifty billion dollars.
This figure will double by 2030 even if a decision is made today to peg the fortnightly amount paid to pensioners at its present level for a long period of time.
It will occur because a rapidly increasing number of Australians, currently 4.6 million of us, are reaching pension entitlement age. This rise will continue until the ageing of the population reaches its peak around the year 2050.
Therefore, the AMOUNT paid to genuine pensioners is not the basic cause of Budget blowouts for which pensioners are constantly blamed.
It must be kept above the poverty line as a basic minimum requirement.
This huge financial challenge to government is created by the sheer scale of longevity and It is a financial commitment that no government can eliminate or avoid.
It is destined to cause the greatest economic and social revolution in the history of Australia if common sense planning for the long term does not occur now.
The key issue in facing this reality relates to ELIGIBILITY.
Who should receive the pension and what criteria should be used to determine eligibility?
On this matter alone, the successful management of the impact of the Age Pension on future Federal Budgets entirely rests.
Given that a number of studies have proved that the current level of the age pension is clearly inadequate and must be dealt with urgently, the immediate establishment of an Independent Age Pension Tribunal is a practical and pragmatic step forward in obtaining the best possible outcomes for pensioners and for Australia.
It will be evidence of sound responsible Government.
As a step towards facilitating this, key elements of legislation to establish and manage such a Tribunal are set out herewith.
Age Pension Tribunal of Australia.
PURPOSE OF ESTABLISHMENT
At the time that every Budget is presented to the Australian Parliament, and throughout all election campaigns, Age Pensioners are humiliated by public debate about the adequacy of their Pension and its supposed drain on the national economy. This constantly fosters a growing divide between them and younger taxpayers who feel certain that they will be bearing an increasing tax burden throughout their lives.
Pensioners have earned the right to live without this constant source of humiliation.
It is, therefore, vital to take politics out of the pension debate.
This will be achieved by having the Age Pension calculated by an Independent Tribunal whose determination of the amount of the pension cannot be amended by Parliament.
The indisputable facts supporting this necessity are-
*The Age Pension is an unavoidable charge against the Budget.
*It has been so for a century and will be for centuries to come.
*Its primary place as a fundamental element of unavoidable government expenditure must be accepted without the annual drama that currently surrounds it in politics and the media.
*It must cease to be a cause of social division the community.
*It is a core responsibility of government to accept responsibility for providing it without constantly embarrassment for its recipients.
POWERS OF TRIBUNAL
The Tribunal will determine every year what the AMOUNT of the Age Pension will be for single and married age pensioners and what is the financial value of supplements they may qualify to receive.
The amounts determined by the Tribunal will be accepted by both Houses of Parliament without debate.
POWERS OF PARLIAMENT
Parliament will retain power to determine ELIGIBILITY.
It will legislate as to who can receive the Age Pension and how an income and assets tests and other criteria will be applied to those who claim eligibility.
As eligibility is the sole element which can control the cost to the nation of the Age Pension, it is on this factor that governments must concentrate policy development and make the crucial decisions necessary in the years ahead if Australia is to handle the huge costs created by Longevity.
The Tribunal will have the right to make recommendations relating to eligibility, but Parliament will have the sole power to accept or reject or amend them.
SIZE OF TRIBUNAL
The Tribunal will have three members, all of whom will serve part time.
The Chair will serve for five years.
The other two members will serve shorter terms – one for four years and the other for three years.
Each gender will be represented on the Tribunal.
Their remuneration will be determined by the Department of Prime Minister and Cabinet.
QUALIFICATIONS OF TRIBUNAL MEMBERS
The Chair will be an eminent citizen with a known record of service to the community and a high level of professional achievement.
One member will be an economist with experience of the management of the economy.
The third member will have acknowledged skills in the broad scope of the social impact of Longevity.
Disqualified from membership will be any person who is or has been a member of a political party or a Member of any Parliament or Senate or Upper House or Local Government anywhere in Australia.
None can be in receipt of a government pension or welfare payment.
All members will be appointed by resolution of the Cabinet.
Tribunal members will refrain from political comment, but can comment publicly on questions relating to the work of the Tribunal and give explanations as to how it makes its annual determination of the Age Pension.
Federal Cabinet will appoint an Executive Director of the Tribunal who will be subject to the same disqualifications as members of the Tribunal.
Staff will be appointed by the Executive Director with the approval of the Tribunal and will not exceed five persons.
Funding of the Tribunal will be within the Budget of the Department of Prime Minister and Cabinet.
The Tribunal will work under the general supervision of the Secretary of that Department, but will present its Annual Report directly to the Prime Minister.
Every year, the Tribunal will hand down its determination of the Age Pension not later than six months prior to the presentation of the Budget to the Parliament.
It will be mandatory for the Tribunal to hold these consultations annually.
*At least two Focus Groups with Pensioners in each and every State and Territory. One will be in the Capital City and the other in a Rural or Regional community. The purpose of the Focus Groups will be to determine actual expenditure by pensioners on the necessities of life and which of those necessities they deny themselves because of the limitations created by the pension.
*A meeting with each of the Department of Prime Minister and Cabinet, the Treasury and the Reserve Bank.
*Separate Meetings with the Treasurer and Shadow Treasurer.
*A meeting at Parliament with Representatives and Senators from all political parties and independents. An attendance of 25 is envisaged.
*A meeting in Canberra with leaders of major not for profit organisations involved in significant aspects of Longevity.
*A consultation with a panel of at least three eminent economists drawn from the private sector.
Those who attend any of the above consultations will do so at their own expense and without remuneration.
OTHER RETIREMENT INCOMES
In making its annual determination, the Tribunal will take into account the relationship of the Age Pension to other Retirement Incomes such as,
MATURE AGE EMPLOYMENT
ELEMENTS OF LONGEVITY SPECIFICALLY REQUESTED BY THE TREASURER
In doing so, the Tribunal will consider the impact of TAXATION on all of the above and the capacity of pensioners to utilise EQUITY IN THEIR OWN HOMES.
The Tribunal will have the right to make recommendations to Parliament in relation to the impact of the size of the pension on any or all of the above and vice versa, but Parliament will be under no obligation to accept them.
It is can be anticipated that the annual determination of the Age Pension will become a benchmark by which Governments can determine the size of other pensions and welfare payments.
The Tribunal will be required to take into account the potential impact of its decisions on those other pensions and payments.
The Tribunal will continue as an institution of the Australian Parliament until another Act of Parliament replaces it.
At some future date, an enlarged Tribunal may be appointed by Parliament to replace it so that its work can include also a determination of other retirement incomes, pensions and welfare payments.
At the same time as legislation is passed by the Parliament to establishment the Tribunal, it is envisaged that legislation will also be passed which outlines the criteria to be used in determining ELIGIBILITY to receive the Age Pension. The legislation will replace all other legislation relating to the Age Pension. It will be specifically drafted to embrace the future impact of Longevity on the economy.
An additional piece of legislation will be needed to outline incentives that the Parliament will also implement in order to encourage SAVINGS by the people of Australia towards their own Longevity, without being penalised for their frugality. This will cover greater personal investment in Superannuation and alternative recommended Savings, as well as extending working life beyond the current age of eligibility to receive the Age Pension.
PROPONENTS OF TRIBUNAL
This proposal for an Age Pension Tribunal is the work of the LONGEVITY INNOVATION HUB and the BENEVOLENT SOCIETY following on from their recent study of the ADEQUACY OF THE AGE PENSION which was presented at the National Press Club in Canberra on Wednesday, 14 September, 2016.
For further details of advocacy of the establishment of the Tribunal, you are invited to contact
THIS PROPOSAL IS A SIGNIFICANT FIRST STEP IN PLANNING TO MEET THE HUGE ECONOMIC AND SOCIAL IMPACT OF LONGEVITY.
IT IS UNAVOIDABLE.