“I do not like it when one pits one generation against another, one class against another, one race against another, it is unbecoming and that is what the Labor Party plans to do,” she said. This triggered an outcry after Labor’s Matt Thistlethwaite denied the characterisation.
‘Not just the mega wealthy’
Andrew Lee, 73, says he’s only on $44,000 a year and will lose $9,000 a year under Labor’s plan.
“It is not just the mega wealthy who will be affected,” said Mr Lee, a former public servant and advisor for various agricultural industry groups, told the hearing.
“I already drive an old car… I do all the maintenance around the house and do all my own gardening,” he said.
“Can you explain how it is fair to allow charities, trade unions and employer bodies to still claim cash refunds and not self funded retirees?” he asked.
David Dolan was another typical example of those who spoke, warning he and his wife would lose $20,000 to $25,000 a year.
He pointed to analysis which indicated retirees would need a balance of about $1.1 million or more to match the income of the aged pension.
“We saved consistently through our working lives so we could be self sufficient and not have to rely on the aged pension,” Dolan said.
‘Spend up big and go on the pension’
“We did not spend up and buy a bigger home or expensive cars. We brought up our three children in our modest home,” he said.
“This is a ludicrous situation,” Dolan said, echoing others who as asked “why anyone would save for their own retirement when Labor’s plan puts you in a superior financial position”.
“Why save? Spend up big and go on the pension,” another said.
A number of the retirees said they would look to invest into foreign companies or move their money into property if Labor went ahead with the plan.
“It’s wrong,” John Banks said. “We should be encouraging Australian companies who are employing Australian people,” he said.
TAG Financial adviser Brenda Hutchinson told the inquiry a lot of her clients want to leave the Australian sharemarket.
Their analysis shows it is self-funded retirees at the lower economic end of the economic pool who will suffer the worst – those with a balance under $1.6 million and particularly in the $700,000 to $800,000 range who are expected to lose any cash refund.
“For those who are under the $1.6 million transfer balance cap which is the majority of the self-funded retirees, they will actually just lose that [income],” Ms Hutchinson said.