Policies have yet to be put in place that will adequately tackle the challenges resulting from the enormous demographic shift of a growing ageing population who are living longer, the departing Shadow Assistant Treasurer Bernie Ripoll has warned.
Failure to tackle retirement savings, and how long they last, will led to a fall in living standards in Australia, Ripoll said.
He urged policy makers to have courage, adding it was not good enough, for any government, to ignore the upcoming issues because they were too hard or unpopular.
“We have and are used to a really high standard of living in Australia – something people may not quite understand – but if it was to reduce we would really feel it,” Ripoll said, who over saw superannuation in his role as Shadow Assistant Treasurer.
“There will be many, many more people in retirement in the next 20 to 30 years that will be 85 years and over, and 100 years and over. That’s a long time to be out of the workforce and I’m not sure our system is ready for that yet.”
He added the biggest upcoming area which needed to be addressed, as part of the process of establishing appropriate policies, was the interplay between the tax system, superannuation and earnings. Another priority area, given the number of single women in retirement is expected to rise, was resolving the large disparity in savings between men and women,
“These aren’t easy issues to solve or resolve, but they are certainly the ones which are on the horizon,” he said. “These are really significant matters for the government to deal with, as well as the community.”
In an interview with Investment Magazine, Ripoll generally complemented the effectiveness of the superannuation industry, pointing to a report from the Institute of Actuaries which predicted 30 year-olds, by the time they reached retirement, would be less dependent on the Age Pension because they will have benefited from working for a lifetime under the superannuation guarantee system.
Ripoll’s successor is due to be selected in the next two weeks.