THE PRESS MONDAY, AUGUST 25, 1986. The cost of superannuation

Press, 25 August 1986, Page 20

THE PRESS MONDAY, AUGUST 25, 1986. The cost of superannuation

The debate about National Superannuation goes on; the Government is retrieving as much as it can of the benefit; the Opposition sees the need to renovate the scheme it introduced a decade ago; economists observe that it is too expensive and rate its introduction as a vote-grabbing device. The qualifying age is questioned, and the need experienced by beneficiaries is disputed.

Without doubt the scheme will be changed, in its scale, in the breadth of its application, in its funding, and in its being subject to taxation. At root, the complaint is that it is too expensive, that the country cannot afford a generous benefit for its older members.

The complaint may not represent the crucial question. This is more likely to be whether the community can afford not to be mean or discriminatory.

In times past, the care of the elderly was very much a family matter. The older members of a family commonly depended on the economic support of the younger members. Houses were shared; family groups were bigger. The resources of all were put to a common end. Of course, there were plenty of exceptions; and, today, the old pattern survives in many homes. The great differences lie in longer life expectancies; in the establishment of separate households, separating generations; in the mobility of families; and in the greater ability of older people, still fit and in good health, to continue earning from work.

Much of the opposition to National Superannuation rests on the fact that many older people can manage without the extra support of a State benefit, and that these are people who would not have depended on the support of their own families. Some have provided for retirement through other superannuation schemes, and the scheme for State employees is the biggest and almost certainly the most generous of these. Between this and having no savings or retirement fund at all lie the great majority of citizens, some with assets, such as their own house, some without. People who have gone through a working career in similar circumstances and with similar incomes can end their working lives with vastly different resources for their old age. Some will have savings; some will have little. Some will have support from families; some will have no family at all.

These variations, often the results of individual choices made throughout life, or

the result of good and ill luck, do not drive neatly towards a conclusion that a State benefit should be universal and equal, any more than they drive towards a policy that the State should pay out only to meet obvious need. Almost any policy on a welfare benefit for retirement will be a compromise between these two extremes. The great, basic decision is on who will pay: the current taxpayers, or the beneficiaries through their lifetimes of earning. Those who can afford to, or choose to, or happen to be in the right kind of employment, can provide much towards their own future welfare. It seems reasonable that they should be encouraged to do so, if only to minimise their dependence on others later. A substantial proportion of State revenue is being used to pay for National Superannuation. Many say it is too much and that it is a burden on younger people who are still earning. This concern overlooks the fact that the earners generally do not have to support their elders any longer. A proportion of family income always went towards housing and care of the elderly when the means were there to do so. The standard of living and the cost of housing the older generation, often at their own cost, have certainly increased. As a proportion of the wealth of the whole national family that has taken over final responsibility from individual families, the cost of National Superannuation is not really the monster it has been made out to be. The cost, a few decades ago, was private and inconspicuous, but real; it was also illdistributed and often unfairly borne. Far too much fuss is being made now solely because the cost is out in the open, and widely shared.

If current earners have to pay for superannuation for the old, as they pay for education of the young, nothing has really changed morally, politically, or in practice. The concern today should be that forces are gathering to make a change in where the responsibility rests. Instead, the prime concern should be to ensure that it stays where it is and, for all practical purposes, has always been. If the burden is greater than it once was, and this is questionable, it is only because the standards of expectation in old age are greater, too; and this will probably continue to be so. Accordingly, the standard of living of younger people has to be moderated. No new principle is uncovered here.