Sent:	Saturday, 27 January 2001 9:05 PM
To:	super.sen@aph.gov.au
Subject:	Letter to Senate re pension

Julie Lindner

PO Box 15
Farrer
Canberra
ACT  2607
 
Home Phone 02 6286 4730
Email juliel@smartchat.net.au

22 January 2001

The Secretary
Senate Select Committee on Superannuation and financial Services
Parliament House
CANBERRA ACT 2600

The benefit design of commonwealth public sector and defence force unfunded superannuation funds and schemes.      

 
My name is Julie Lindner and I retired from Public Service in April 2000 at age 55.  I contributed to the CSS scheme for close to 40 years.   Naturally, at this early stage I am unable to accurately predict how the annual CPI increases will keep pace with maintaining my current living standard.  I can see that a more just measure would be to link the CSS pension with the pay increases of Public Servants (including one off bonus payments which seem to be part of PS bargaining lately). I understand that all politician’s pensions are linked to politician’s pay increases should not public servants be treated similarly? 
 
If you are not prepared to link pensions to Public Service pay increases, offering tax concessions such as those that are available if one buys an allocated pension should be considered. Public Servants in the CSS pension scheme automatically receive a fully taxed indexed pension; they do not have an opportunity to choose a lump sum invested with a tax effective allocated pension. 
 
The CPI is not an effective measure of the cost of living for a retiree. It’s designed to capture living expenses for the whole community.  Approximately 20 per cent of the population are pensioners and the spending patterns and priorities are diametrically opposite to that of the majority population. 
 
Until recently when the CPI basket was updated, mortgage rates decreased over a number of years and this decrease offset large increases in the cost of living. As most retirees did not have mortgages they received no extra purchasing power as mortgagees did, in fact retirees’ purchasing power decreased markedly over that period. 
 
Similarly, now computers are included in the basket of goods (possibly not an essential item for a retiree) the ever reducing cost of computers over the last 18 months especially since introduction of GST is offsetting the general increase in the cost of living. Again the pensioner does not enjoy the advantage of cheaper electronic goods but must pay more for everyday items.

 
State Governments/Territories are notorious for increasing essential costs and municipal charges, taxes and levies by amounts far above the CPI/Inflation rate and retirees are forced to wait a year for compensation through the CPI adjustment.  
 
The aspiration of many retirees is to travel, again they are disadvantaged through the introduction of the GST, because of their relatively low income stream a holiday overseas with the extra 10 per cent GST virtually wipes out the tax cuts they received for the whole year!                 
 
These are my thoughts on the matter and I’m sure some statistician working to control Government outlays could totally destroy my argument. It must be kept in mind that statistics can be very misleading and often do not reflect the true situation. 
 
I do hope you reach a satisfactory conclusion that will assist retirees to keep pace with the real cost of living.        

Julie Lindner