Warren Truss
Warren Truss

Seniors blowing money on luxury cruises, says Truss

WIDE Bay MP and Deputy Prime Minister Warren Truss has sparked a national storm by suggesting too many seniors are blowing their money on luxury cruises and then going on the pension.

Mr Truss told a conservative club breakfast in Brisbane that 1100 people a week, in their mid-60s were moving on to the age pension, with many accessing their super from age 60 and squandering it.

"Increasingly, the lifestyle and the savings for superannuation are being seen as an opportunity to enjoy a few cruises and the luxuries of life for a few years until it runs out and then people wish to fall back on the age pension," the Nationals leader said.

Mr Truss said the government had been forced to act because the aged pension would become unaffordable as the population aged.

"People quite rightly work their entire lives with the expectation the age pension is there at the end of their working lives as a safety net," he said.

"We have to make sure that safety net is secure, and capable in the future of catching the people who need it."

HIS COMMENTS IN FULL BELOW

Mr Truss' comments are unlikely to go down well in his electorate which includes many retirees and pensioners doing it tough.

Wide Bay includes the council areas of Gympie and part of the Sunshine Coast, Fraser Coast and South Burnett.

His comments were condemned by representatives of Aussie seniors who have also attacked the budget.

The Combined Pensioners and Superannuants Association on Thursday released modelling showing the impact of the budget changes.

"Modelling shows that within five years pensioner couples will be more than $100 a fortnight worse off and singles $75 a fortnight worse off in real terms if pension indexation measures announced on Budget night are introduced", said CPSA's Manager Research & Advocacy, Amelia Christie.

The new pension indexation regime is scheduled to start on 20 September 2017 after the next federal election.

"The Abbott Government appears to be counting on the complexity of pension indexation to confuse pensioners and lull them into a false sense of security", Ms Christie said.

"Currently pensions are indexed twice a year based on the higher increase of the wage index, the pensioner-cost-of-living index and the consumer price index.

"The Abbott Government is poised to start using the consumer price index as the only basis of pension indexation, junking indexation on the basis of average wage developments.

"Indexation on the basis of the average wage has progressively produced improvements in pensioner standard of living. These pensioner standard of living improvements will gradually be wiped out.''

THE FULL CONTEXT OF WHAT WARREN TRUSS SAID

Our ageing population locks in an expenditure profile which increases government liabilities without any new initiatives.

We live longer but aspire to retire earlier.

We spend longer at school and university so have less time in the workforce to save for retirement.

By 2050 there will only be three people in the workforce for every person over 65.

The cost of aged care to the federal Budget is scheduled to more than double over the next decade from $13 billion to more than $26 billion.

Hospital costs will increase from $14 billion to $38 billion.

Income support for carers and Medicare benefits will both double.

PBS costs will increase by around 70 per cent over the decade.

There has been a lot of talk about the Age Pension.

Spending on the Age Pension already takes up 10 per cent of all Commonwealth spending - $40 billion this year, but it will rise to $72 billion in a decade on current trends - and it will keep rising.

Demand for the age pension will continue to increase as the population ages.

Despite all of the incentives for people to accumulate superannuation to fund their own retirement, each week 1,100 more Australians become eligible for the age pension.

Many people choose to enjoy their retirement with cruise and world travel in the knowledge that the age pension will be there to support them when their superannuation is exhausted.

Unless we act soon the pension will become unaffordable.

In Australia, between 2010 and 2050 the number of people aged 65 to 84 is expected to double and the number of people 85 and older is expected to quadruple.

One in three people born in Australia today can expect to live until they are 100.

People quite rightly work their entire lives with the expectation that the age pension is there at the end of their working lives as a safety net.

We have to make sure that safety net is secure, and capable in the future of catching the people who need it.


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