Friday, 16 April 2010

Australian pension idea for Gordon Brown?

With a Labour Government in Australia, the question is will Gordon Brown go looking for ideas from the land of Kevin Rudd?
Suggestions have been made in the interim response from the Henry Review that there could be compulsory government annuities. Will Gordon Brown follow with his version? The answer is probably “No” if he listens to the recommendation of Australia’s Investment and Financial Services Association (IFSA). They are concerned that such innovations could be damaging as Australia, like the UK, has an ageing population.
Would such a programme cause lower paid workers to subsidise wealthier Australians? It looks like a compulsory government annuities scheme would need Australians to dispatch all or part of their superannuation savings to the Government when they retire. And then the government would determine a permissible annual draw down.
But we all know that manual labourers do not live as long as white collar workers. So if the UK ever adopted Government-run annuities scheme, then it would be a winner for those who live longer, subsidising those who have a shorter life.
The Henry review, to which Montfort International was an overseas contributor, is ongoing review of Australia’s tax system launched in May, 2009 with results expected before December 2010.

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