GST Funded Super

1 GST is around 8 per cent of GDP.

2 Comparison with other OECD countries indicates that this is a fair average of the costs for the provision of a basic superannuation.

3 The current cost of Universal Superannuation is around 5 per cent of GDP and falling till next year due to the movement of the qualifying age back from 60 to 65.

4 From then until 2030 it gradually increases ( on the previous 65 per cent basis) until it reaches around 10 per cent of GDP.

5 Provided that we start NOW and dedicate GST to superannuation funding then we can build up a fund which will enable us to meet - over the next 80 years - a level of Universal Superannuation in line with current practice. Starting from a payment cost of under 5 percent of GDP and rising to a payment cost of over 10 per cent of GDP - financed by GST running at around 8 per cent of GDP with the balance over the years being funded from the initial surplus and income earned from the investment of that initial surplus.

6 Presently about 70 per cent of current superannuitants have little more than the Universal Superannuation and this ratio is unlikely to change radically.

7 The ongoing income equalisation over 80 years will enable all sections of the community to enjoy some security and some certainty in their lifetime income. It has always been recognised that only Government has the ability to make adequate long term plans for the provision of income in the later years of life. That is why most OECD countries have various plans for pension provisions. The Australian scheme is a horribly expensive scheme to administer. Our universal flat rate benefit is one of the most efficient in terms of administrative cost.

8 Using GST funding means that all are paying in to the fund at around 5 to 6 percent of income but the benefit is more than returned to those on lower incomes since the income replacement ratio is significantly higher for those on lower incomes. Of course for women who receive the same benefit as men - often for the first time in their lives, it has incomparable benefits. This is particularly so since the majority of our over 75 years old citizens are, in fact, women - our mothers and grandmothers and widows, wives and sisters no less.

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