Tax discussion welcomed – retirement incomes discussion needed

A discussion about the taxation system which feeds into a retirement incomes review to ensure equitable, sustainable and stable tax and income security system for all retirees is needed.

 

Ian Yates, Chief Executive of leading seniors advocate COTA Australia, said the Tax White Paper process launched by the Treasurer today is very welcome, but looking at tax in isolation from the rest of the retirement space would be a missed opportunity.

 

The advent of an ageing population requires thoughtful and coordinated planning and we have a great opportunity now to get it right for current and future generations,” Mr Yates said.

 

Starting the taxation review process with a Discussion Paper and then the formulation of Green and White Papers is a welcome process which allows both experts and the broader community to contribute to making any final reform the very best it can be.

 

It’s a shame such a process has not been employed for retirement incomes. Instead the government chose to announce harsh and unfair changes to the pension in the 2014 budget without consultation.

 

The Treasurer needs to put a break on the proposed pension changes now and ensure this considered approach to tax reform is run alongside a considered and coordinated retirement incomes review, so we don't end up with another piecemeal system which favours some groups of retirees over others.

 

This would avoid the situation we have now where pensioners, those who can least afford it, are being hit with cuts while wealthy retirees enjoy lucrative tax concessions.

 

Looking at just tax concessions without broader consideration of such things as pensions, aged care funding, and mature age employment issues makes no sense.

 

There is still time to run an independent retirement incomes review in parallel with Tax White Paper process and we encourage the Treasurer to take this option,” Mr Yates concluded.

 

30 March 2015.