Launch of the Centre for Applied Policy in Positive Ageing with Paul Keating
Thank you to those who joined us at the launch of the Centre for Applied Policy in Positive Ageing (CAPPA) on Thursday 21 May 2015 in Sydney. CAPPA is our â€œdo tankâ€ within a think tank, a place for us to roll up our sleeves to turn some of our great policy ideas from the Blueprint for an Ageing Australia and our Longevity and Positive Ageing project into real life initiatives to make the great gift of increased longevity into a social and economic opportunity for Australia.
Per Capita’s David Hetherington said at the launch, “we need to move beyond talking to action; to start trialing what works and what doesn’t”. Longer lives can present Australia with an enormous opportunity rather than a threat, if we get it right.
CAPPA will bridge the gap between research and action. Longevity is a gift, but only if you can live well. As Per Capita’s Emily Millane said, the great gift of increased longevity shouldn’t just been enjoyed by the well-educated, the well-healed, and the well-housed.
We were very honoured to have at our launch the architect of Australia’s superannuation system, The Hon Paul Keating. He outlined the original thinking behind the scheme to give ordinary people, “the ordinary cats who do all the work”, a decent income in retirement.
“It always got up my nose that superannuation existed for managers and the wealthy and the executive class, and broadly for the public service, and not much in between for ordinary working men and women.”
Mr Keating then went on to outline ways to reform the existing system.
When evaluating the system and looking to the future, Mr Keating highlighted one of the main drivers behind the need for reform, an issue we have been looking into at Per Capita; increased longevity. He pointed out that the scheme initiated in the 1990s was intended to cover people roughly from 65-80 years of age, because that’s how long people lived then.
With average life expectancies moving into the 90s, Mr Keating argued that the Commonwealth’s implicit promise – that workers defer a percentage of their income and consumption for 35 years to ensure a decent retirement income can no longer be met. “You can’t work for 35 years and expect that accumulation to last you 35 years after that. It just cannot be done”, he said. The answer to this, says Mr Keating, is to increase compulsory superannuation contributions to at least 12%, which would cover retirement income for the ages 65-80 as was originally intended.
Alongside this, Superannuation Phase II would be introduced, which would see the establishment of a Commonwealth insurance longevity fund into which people pay 1, 2 or 3% during their working life. This pool of funds then covers people who live well into their 80s and 90s, and would also give commitments to housing and healthcare. Mr Keating likened this to a classic insurance proposition: “you ensure your house, everyone in the street ensures their house, but one house burns down, and they get paid from the premiums that the rest of the neighbours have paid. It’s the same insurance principle.â€Â The contributions of those who die in their 60s remain there for the person who lives to 93.
Commercial insurance can’t ensure across generations and can’t pool risk, but the Commonwealth can. He pointed out that the Commonwealth is the default insurer anyway, through the aged pension, then it is the agency that is better focused to manage the 80-100 cohort than the private for-profit industry.
Mr Keating argued that such reform of the system is “not hard to do: It needs some imagination, some goodwill and some leadership”
By launching CAPPA, we are intending to show leadership on this issue to find ways to remake our social structures to make the most of the great gift of longer lives. Increased longevity can be an opportunity not a threat. We need to get it right by taking action now.
We were also very pleased to have been sponsored by Bupa at this event, and thank you to Louis Dudley, Managing Director Bupa Care Services, for his words at the end of the event. Â He pointed out that aged care needs to be about more than just shelter and sustenance, but also friendship and engagement. Social isolation brings about bad outcomes in aged care, and this is an area where we can all contribute.
To see the full video of the event, click on the Youtube video above. Â To download the audio as a podcast, of either the full event or only Mr Keating’s speech, click on the links to podomatic below.