Retirement Living Council Executive Director Daniel Gannon has told the Federal Economic Reform Roundtable that Australia’s retirement system is failing to keep pace with demographic and economic realities.
The Roundtable, tasked with building consensus on measures to boost productivity, resilience and budget sustainability, comes as government gross debt hits $940 billion in 2024-25 and is forecast to climb to $1.02 trillion in 2025-26.
Daniel Gannon said "three big problems are flying under the radar", namely:
- The way the Age Pension treats people’s assets is unfair and, frankly, wrong.
- Rent assistance is lagging so far behind surges in cost of living and housing.
- Thousands of older Australians are stuck waiting too long for basic care at home.
"The pension is meant to support people who need help in retirement. But the current system punishes those who save a little and rewards those who have their money tied up in large family homes," he said.
"New research shows this stops people from ‘rightsizing’ into more suitable homes because they can’t afford to lose their pension. In today’s market, it also means young families looking for their first home can kiss that dream goodbye."
Second: Commonwealth Rent Assistance (CRA) hasn’t kept up with soaring prices and older Australians in the rental market are living with stress, health risks, and too often, poverty.
"CRA must be reformed to reflect what people are paying and who is eligible, including those who choose to live in retirement villages. Right now, fewer than 4% of homes in villages are eligible because of a policy setting nobody can explain," Daniel said.
"In 1997, the CRA cap covered 55% of the median house price, but today it’s just 26%. If it kept pace, it would be $550,000 – not $252,000."
Third: aged care "and this is a doozy," he said.
"Fact: people want to stay in their own homes as they age. Yet nearly 90,000 vulnerable people languish in limbo, denied the vital Home Care Packages they so desperately need.
"There are too many horrible case studies of 90-year-olds waiting more than a year to receive a package. The sad truth? Some of these people will pass away before care even gets close."
Daniel warned that without reform, hospitals will face more pressure, carers will burn out, and taxpayers will foot an even larger bill for problems that could have been prevented.
“These aren’t just social problems – they’re economic ones, too. Fixing them will make our retirement system fairer and ease pressure on the federal budget.”
