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Letter to the Prime Minister

The Hon
Julia Gillard MP
Prime Minister
Parliament House

30’th July 2012.

Dear Ms.Gillard.
I wrote to you on the 24’th.Jan 2012 in regards to the unfair treatment that part-pensioners
like myself are being subjected to, by the means test of the basic pension.
Since then I wrote to Wayne Swann, Nicola Roxon, Penny Wong, Bill Shorten and others, but neither you, nor the others would answer my correspondence.

I hope that you will answer me this letter.

Here I will give you a little of my life history: I worked from the time I was fifteen until the age of 62, and paid continuous taxes and also for super, at times I paid a 50% tax rate.
In Australia, the age pension has been paid from the general revenue and has been means-tested for all the time, except for a short period in the early 70’s when Whitlam introduced a Universal pension for retirees over 70, and I paid enough taxes in Australia, not to be robbed of a decent standard of living in retirement.

Here is an excerpt from a select committee report, which consisted mainly of Labour MP’s.

As mentioned in the “Select Committee on Superannuation” report of 2003, Australia is the only OECD country which has a means test for the basic pension, and it is mean.
The Report’s recommendation for a review of the employment-superannuation nexus errs on the side of caution. This caution is well justified since it opens up a much broader debate on the structure of Australia’s retirement income system, including proposals for a universal pension than that originally envisaged in the terms-of-reference. The fiscal impact of widening the spread of tax concessions is also unclear.

During the Hawke-Keating government, the compulsory super was introduced, and in 2007 the Howard government introduced the tax free super, if the super came from a so called taxed super.
The tax savings for retirees with large super balances are huge, and many ex politicians will avail themselves of this generous treatment of wealth, and probably many current politicians.
Bill Shorten was even challenged by the ATO for exceeding the contribution limits.
For the recipients of defined benefit super, which comes from untaxed source, like most government super, the Howard government allowed a 10% tax offset on their super, but this only benefits mainly the recipients of large super incomes, while most recipients are on incomes below the tax thresholds, so they do not benefit at all, but the means test of the basic pension affects them to the tune of 50%.

I,am aware that the super industry is very powerful, and it will be politically very difficult to change the super system, because abolishing the means test of the basic age pension will also require to abolish the tax concessions for super, which are now costing the government as much as the total age pension, yet it benefits only the top 30% of the retired citizens and the super industry, which collects huge fees for managing other peoples money, often with very poor results for the compulsory superannuation contributors.
I have previously told my, then MP, Alexander Downer, that I regret the decision to migrate to Australia on a two year contract, and not return back to my country of origin after my contract expired, to which he just replied, he’s sorry to hear that.
Unless the Australian government is prepared to abolish the unfair “means test” of the age pension, all the members of government and opposition are guilty of not acting in a fair and democratic manner for the benefit of all the citizens, and the late AJ Marshall must have been correct in his remark about Australian politicians.

In the book “Unemployment forever or a Support Income System and Work For All”, by Allan McDonald, on page 142 (h) it is stated: Any means tested welfare system requires extensive and complex state control and regulation. Australia is slowly but surely moving towards the ultimate outcome of a means tested social welfare system-state control over finances, the savings, and the labours of the poorest in the community.

Have the politicians of Australia the know-how and will to change the tax and social system to be more egalitarian, or was the late Professor A.J.Marshall right when he wrote, as quoted in the book “Equality and Authority” by S Encel on page212: “Most Australian politicians, he wrote, aspire to parliamentary seats ‘to better their salary, to inflate their egos and feather their nests’.

Yours truly

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