Major budget adjustments are needed to address Australia’s aging population, according to a recent AFR article.

A significant demographic shift since the 1950s, driven by lower birth rates and rising life expectancies, means the balance between working Australians and those over 65 has tilted. We currently have about four working-age Australians for every person over 65, a sharp decline from a figure of seven about half a century ago. Workers will increasingly be required to fund a larger cohort of those on the pension, as well as Medicare, the NDIS, the PBS and aged care.

Current government budgets, and spending, are failing to address this, with major changes needed across taxation, government benefits, Medicare, the NDIS and pension asset tests. Tax reform is required to encourage investment, Medicare should include modest co-payments offset by higher pensions for those who cannot afford them, and we need more NDIS cuts to manage entitlement without restraint, it argues. It further suggests that the family home should be included in the pension assets test, given it is unsustainable that retirees in multimillion-dollar homes have access to pensions, aged care and other taxpayer subsidised benefits. Any budget savings could then be directed towards debt repayment and tax cuts.

While there’s no guarantee what government spending will look like in years to come, what can help you plan for the future is a tailored retirement strategy. To get started, please contact us.

General Advice Warning:

The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
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