It surely comes with a large warning sign for the Government if the Greens are onside. Allying with the delusional, bypassing principle, and losing votes for what amounts to no more than a hill of beans is a bad deal however it is cut. In the scheme of things, the anticipated savings from the new pension arrangements of $2.4 billion over the budget forward estimates (three years) is small beer and comes with a big price tag.
A foundational principle, on which those of good will and common sense should be able to agree, is that taxation and welfare provisions should not conspire to make a higher income earner worse off than a lower income earner, when both are otherwise similarly positioned. Equally, pension provisions should not make a retiree with more assets poorer than one with less, when both are otherwise similarly positioned. But the unholy and unconscionable alliance between the Government and the Greens will do just that.
To bring it home, for those who might be confused by the support of most commentators for the new pension tapering arrangement, an example is salutary.
One couple has earned throughout their forty years of marriage exactly the same income as another who live across the street in an equally-valued house. However, the first-mentioned couple took less expensive annual holidays, drove cheaper cars, generally watched their expenditure and ended up with $823,000 in financial assets, on which they earn 4%. For their frugal ways they will soon get no pension.
The other couple spent big, relatively speaking, on lavish holidays and fancy cars and ended up with only $375,000, on which they also earn 4%. For their spendthrift ways they will get a full pension and end up materially better off than their frugal neighbours. In fact, they will get around $49,000 per year compared with the $33,000 (plus any Salvation Army hot dinners) on which their frugal neighbours will have to scrimp by.
My advice to the frugal couple would be to start spending extravagantly now. It is a unique opportunity when spending will bring forth increased income. It is Magic Pudding time: the more you eats the more you gets.
And, purely as a by-the-way, I would think that a solid majority of the 327,000 older people who will lose out are Liberal voters. Only complete dimwits — with no sense of principle — could ever have conceived this policy. And, as for its supporters in the media and elsewhere, I will be kind. Maybe they haven’t thought it through.