I have an idea to help Australia.
I daresay it would work in other first world countries also but it would definitely work here, and the idea is a very simple one.
All people over 60 should be encouraged to retire.
Strongly encouraged – with major tax and social security incentives.
This will benefit everyone – especially the young.
* * *
I’m now at the age where friends and colleagues are starting to retire (or are at least talking about it).
Those who aren’t ready to retire are mainly concerned that they won’t have enough money. After all, how much is enough? Especially when you can no longer easily get another job if your circumstances change (or live a lot longer than you expected to).
The current situation, of course, is massively complicated by the COVID19 problem. The future is so uncertain that people who were contemplating retirement are putting it off – not least as they have suddenly realised that rental and other investment income is no longer as safe as they thought.
That may seem fair enough, but the hardest impact of older people staying in the workforce is the loss of opportunities for the following generations.
That really needs to change.
An entire generation is in danger of missing out on the sort of careers my generation took for granted. In my day you got a free education and moved seamlessly into a well paid professional job.
No longer. These days, after years of study and ratcheting student debt, graduates face a Darwinian Struggle just to land an unpaid internship. Graduate placements are like hen’s teeth and it’s mainly because people are no longer retiring at 65 as they routinely did in the past. They’re staying on, having accrued massive salaries and other benefits which, quite understandably, they are loath to relinquish.
This keeps the younger people below them marking time in mid-career when they ought to be moving to the senior ranks, and the youngest of all don’t get the early career opportunities that my generation expected as a matter of course.
This has all sorts of implications beyond just the personal. Our entire work/social infrastructure is delayed because people aren’t getting the skills and experience they need when they are best equipped to benefit and grow. That means our entire economy is stunted and less equipped to compete on the world stage.
And it will get worse. If we are not producing the people we need to power our future economy and run our infrastructure, who else will do it?
Are we to become tenants in our own country, having sold out to overseas interests rather than develop our own?
And what becomes of the unused generation?
Increasingly resentful of the baby boomers who stole their careers, they will not be earning enough to pay the tax needed to fund our declining years and will be disinclined to provide the basic services we will need.
We have a powerful incentive to make sure this never happens – the carrot of retirement plus the stick of a dysfunctional community in which a happy retirement will be unlikely except for the super-wealthy. (And how could even they be happy amid so much communal unhappiness?)
So, how do we encourage the over-60s into retirement so that everyone else can move up a rung and the youngest can finally get a foot onto the ladder?
We dispel the fear of retirement by guaranteeing (or at least maximising) retirement income opportunities. The government needs to restore the full value of the superannuation system established by Paul Keating to enable more people to fund their own retirement.
That will certainly help but other tax incentives (not to work beyond 60) should also be on the table.
There should also be a pension for all retired Australians over 60 which is means tested to cut out at about the $60k mark (retirement income).
These measures will be expensive but nowhere near as expensive as wasting a generation which receives more in welfare than it pays in tax. Providing opportunities for the young is a double winner because it increases tax revenue at the same time as decreasing welfare payments.
A triple winner, in fact, because it reduces mental health problems and other dysfunction to create a happier community in which people like me can enjoy retirement…one day. (Ahem)
My comments are most relevant for the corporate/professional world. There will be other sectors of work which will need older people to stay longer (especially in the VET sector) but perhaps there could be other incentives (eg teaching supplements for people happy to train those needed skills).
There are any number of details to work out but the basic principle is nothing less than a treaty between the generations. Instead of hogging the opportunities for ourselves, we should be stepping aside to let the young ones step up.
And in return they will maintain a community in which we can comfortably retire…or transition into full time writing.
Ahem.
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