Former prime minister Paul Keating has called for a “longevity levy” to support the superannuation income of people over the age of 80.
Keating told ABC’s Lateline the current superannuation scheme, which he helped create, is not enough to sustain a population which is living longer than originally anticipated.
“We can’t try and pretend that like a piece of Indian rubber, we can stretch the [superannuation] accumulation from 65 to 95,” he said. “There’s not enough of it now and it can’t go for 30 years.”
Keating is proposing a superannuation levy of 2-3% in order to help pay for the pension and healthcare costs of Australians between the ages of 80 and 100. He also wants the rate of superannuation to increase from nine to 12%.
The news follows Tony Abbott’s announcement that there will be no changes to the eligibility or indexation of the age pension during this term of government.
RBA lowers inflation forecast
The Reserve Bank of Australia expects inflation to hit 3% by June, while the central bank is forecasting a 2.75% inflation rate for the 2014 calendar year.
In its quarterly statement of monetary policy, the RBA said the exchange rate is noticeably lower than a year ago.
“Accordingly, higher import prices are still expected to exert an upward influence on inflation for several years, albeit by a bit less than had been anticipated a few months ago,” the report reads.
“Working in the other direction, domestic inflationary pressures are expected to remain subdued. As growth in output is expected to be below trend for a while yet, there is likely to be a degree of spare capacity in labour and product markets for several years.”
Shares down on open
The S&P/ASX benchmark was down 36.8 points to 5440.0 at 11:16 AEST. Last night the Dow Jones closed up 0.2%, rising 32.43 points to 16,550.97.