Ageing, Superannuation, Tax, Fertility, Petrol – Interview with George Moore, 2UE

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Ageing, Superannuation, Tax, Fertility, Petrol – Interview with George Moore, 2UE


Interview with George Moore


Thursday, 14 April 2005
9.20 am

SUBJECTS: Ageing, Superannuation, Tax, Fertility, Petrol


Good morning.


Good morning, good to be with you George.


My pleasure, sorry Lawsy isn’t here, he is not feeling so well today

but he bounces back pretty quickly.


We will send him a cheerio, I am sure he is listening.


Well I hope he is listening because you are on the show. My first response

to this and I applaud the move to try and get older people to stay in the workforce

but I think it is a bit like the cart before the horse. I think it is, there

would be a lot of people would imagine over 45 would be sitting back hearing

that thinking for god’s sake if somebody would just give me a job.


Well unemployment is the lowest it has been in 28 years so there has never

been a better chance to get a job in the last 28 years, that doesn’t mean

that everybody has got a job. You are quite right, there are a lot of middle

aged workers who maybe lose their jobs in restructuring and find it hard to

get back into the workforce and a big part of this has got to be re-educating

employers and saying to employers, here is a group of people who have got a

lot of skills, who are very reliable and they are good employment prospects.

And that is one the reasons I talk about this so much, I am actually talking

to employers as much as anybody else…


We have just come out of about 20 years with the post-war baby boomers sort

of growing through their 20s and 30s and so on, and it has been a young person’s

world (inaudible). I remember some time back I did visits to about half a dozen

advertising agencies around Sydney to promote you know, the radio station, and

I couldn’t spot anybody over about 23 or 24 and it is quite an eye-opener.


Well I think that is the advertising industry in particular. But look, it is

going to be increasingly an older persons world. This is what the ageing of

the population tells us that the number of people over 65 is going to double,

the number of people of working age under 65 is going to remain the same. So

the whole playing field is now tilting towards the older people. What that means

is with the same number of workers we are going to have to support double the

number in retirement. And this is where we have got to start adjusting our policies

so we can cope with these changes in the years which lie ahead. Now I am not

talking about tomorrow, I am not talking about next year, what I am talking

about is what is going to gradually happen over 10, 20 and 30 years.


I would also imagine there would be a lot of people in their, say around 50

maybe mid-fifties right now who are looking ahead towards their retirement and

looking at their superannuation, the amount of money they are going to need

for retirement, and they are going to realise if they haven’t already

that there is not going to be enough there for them.


Well this is the other point.


So, I think it is going to be a natural evolving thing that people will stay

at work longer because they will simply have to.


Well, at the moment you can get your superannuation at 55 and people can draw

down the sum which has been designed to keep them for the rest of their lives.

Now if life expectancy is to 85, that superannuation if you took it out at 55

would have to last you 30 years.


That is right, I was going to say that, slightly tongue in cheek, you would

have to like living on baked beans. I went to a lecture by some people in the

investment superannuation business, this is about a year or so ago, and they

put a slide up on the screen and they asked people before they put the slide

up to guess what the annual income was for people who had retired. And it is

frighteningly low across the whole population. Sure there are people who have

retired early and they have made a killing and have done really well for themselves,

but for the general population it is a very low amount of money.


Absolutely and this is because life expectancy is increasing so much. When

the aged pension was introduced for people at age 65, life expectancy was only

about 67 or 68, so it was introduced on the assumption that people would live

on the aged pension for two or three years. Now it is up around 80, mid-eighties,

people can be living on the pension for 20 years and of course as we said earlier,

if you take your superannuation at 55 you can be living off that for 30 years.

Now, my only point is that if you can keep in the workforce after 55 to retirement

age of 65, I want to be very clear about this, I am saying to people you are

perfectly entitled to retire at 55, but will your superannuation last? What

about thinking of working through to 65, that is the retirement age in Australia.

What if you don’t want to work full-time, is there a possibility of working

part-time. And the most recent change which I have introduced is to say, what

about actually working part-time and drawing on a bit of your super to supplement

that part-time work. This will be preserving your super for the years ahead

in your 70s and possibly in your 80s. People will hope that they are going to

live into their 80s, many of course live into their 90s and if you can keep

going in the workforce just a few extra years, that will help the superannuation



Alright, there is talk about a concessional tax rate as well.


Yes, one of the things that we are going to introduce is what is called the

mature age workers tax offset which is for mature age workers which we define

as people above 55 and it will give them an actual tax break if they remain

in the workforce after 55. And that will be a tax break of $500.


Do you have any figures on the percentage of people who retire at 55 as opposed

to the regular old age of 65?


Well what I can tell you is that Australia has one of the highest rates compared

to the rest of the advanced countries of retirement between 55 and 65 years.




We are abnormally high.


I would have thought and I have got no evidence to support this, just my gut

instinct was that it is moving back towards 65.


Yes I think part of what we are talking about now is changing people’s

attitudes. If you bear this in mind, if children are going to finish school,

most of them are going to go onto tertiary education. They don’t get into

the workforce, the full-time workforce these days until their early twenties…


Right, and if couples are having their children later in life which has been

the trend which means they have got to work longer to support them and put them



…support their kids. So, suppose you entered the workforce in your early

twenties and you worked through to 55, that is about 30 years in the workforce

and your life expectancy is 85, 30 years in the workforce has got to support

30 years in retirement.


Yes, you have got to save a lot more than you are doing now.


You would have to save a lot more than you are doing now and so what I’d

say is the good thing about improving health standards is we are healthier,

we are living longer so I am trying to say to people, you know, try and stay

on until retirement age and retirement age is 65.


Alright, and what about the other end, the baby bonus, is it too late to expect

some sort of baby boom? I did see that photo of you with about half a dozen

babies in your arms, that really won’t have a great impact on this particular

issue, will it?


Not really because during the fifties in Australia the fertility rate was up

around three, three children per woman. At the moment it is down at about 1.7.

Just to replace the population you need it to be about 2.1…




…you know, that is two kids, one for mum, one for dad…


And a bit over, yes.


…and then the 0.1 is for those that don’t have children. You will

remember the phrase I coined, ‘one for mum, one for dad and one for the



Or was it Prince Charles, an heir, and a spare?


Anyway, the baby bonus, it looks like it has stopped the fertility rate falling

so that is good news and it may have turned it up, but it will never go back

to three or four like we saw in the fifties…


It is a different world isn’t it?


…well it is a different world, you know, contraception is much more available

and living standards are much higher. It is a funny thing George and this happens

all around the world, as living standards improve, people have fewer children

rather than more children. In poorer countries people have much higher birth

rates than they do in richer countries, it is the same as…


Yes, it is human nature. The childcare issue, we have got the Budget coming

up next month, are there going to be some improvements there for childcare places?

This is part of trying to get mothers back into the workforce.


Well it is part of again encouraging people to participate where they can.

I have said that if the kids, when the kids go to school, it is an opportunity

for mothers to look for work, to at least look for it, part-time work, and if

there are mothers that want to do that we should encourage them to do so and

make such work available for them. One day their kids are going to leave home

and they might want to return to the work-force full-time but you have got to

have these options available for parents I think.


Alright, now on another issue and this is a very hot issue with people all

around the country about the cost of petrol. As I understand it the GST goes

on top of the price of petrol which already has taxes, I remember seeing a graph

of this some years ago and it is like the bloke in the service station gets

about 2 cents and about 60 to 70 per cent of the price of a litre of petrol

is actually one tax or excise or another, and then on top of that goes the GST,

is there any room there for a bit of a break on this. We have oil at record

prices and it doesn’t look like coming down.


Yes, well there are two taxes that apply to petrol. There is what is called

an excise and that is 38 cents a litre, that is the Commonwealth tax, and then

there is GST which is 10 per cent…


On the top. That means that you have got a tax on a tax.


…well it is 10 per cent of the total price which includes the excise.


Yes so it is a tax on a tax.


Now as the price goes up, the GST goes up. The excise doesn’t change,

that is 38 cents, the GST goes up. The Commonwealth tax, the Australian Government

tax is 38 cents a litre, it doesn’t increase, the money that goes to the

States, the GST does increase as the price goes up because that is 10 per cent

on the value so…


Well isn’t there room there for a start to take the GST off the 38 cent



Well what we did, what the Commonwealth did when the GST came in is we cut

the excise so that when the GST went on it, it came back to the same price.

It was 44 cents, we cut it to 38.


It just seems, there seems to be something so unjust about the idea of taxing

somebody on a tax that is already levied on them.


Well what happened is it was 44 cents a litre right, and when you are bringing

in a 10 per cent, 10 per cent on 44 cents was another 4.4, so what we did was

we cut it by over 4.4.


Yes, I can see the logic in the maths there but there is still the basic concept

of charging a tax on top of another tax just doesn’t sit right.


Well what some states do, Queensland does this, is because it is getting this

huge GST windfall it reimburses, it reimburses 8 cents a litre, that is what

the state of Queensland does. So it is up to the States…


Can you imagine Bob Carr doing that?


…well it is up to the States, he is sitting on the GST windfall, it is

up to him what approach he takes to petrol, but I want to say to you that the

Commonwealth anticipated this problem when the GST was introduced and we cut

the excise to make sure that you wouldn’t get that doubling up of taxation.


Alright, so is there anything that the Federal Government can do to bring some

relief here because the longer the petrol prices stay at high levels that means

that there is money going into the petrol tank which we have to spend which

means less money to spend on other things and you know how that filters right

through the economy.


Oh absolutely and you know, I think that the petrol prices are causing a great

deal of hardship for people and it is no good for the economy, I can assure

you of that, it is no good for the economy. But as we all know, why are the

prices where they are at the moment? The oil price, petrol is made from oil,

is at an all time record. And that is what governs the petrol price. Until such

time as you see those oil prices come down and fortunately it appears in the

last couple of days they have come down, it will take a while to flow through

to the bowser, until you see those oil prices come down, petrol prices will

remain high. Petrol is made from oil and if the oil price goes up, the petrol

price goes up, it is as simple as that.


Alright, good to talk to you, thanks for your time.


Good to be with you, thanks.