If
you haven’t taken a good look at the US government’s plan for social
security, and you’re under 50, then you ought to. The White House
website is a good place to start, but don’t get bogged down by the
rhetoric before you get to read between the lines.
President
Bush claims that he will listen to any good idea, save raising payroll
taxes, to save the pension system. Well, if governments really want to
look at what will happen to people when they’re old, I make a great
case study of what to expect. First of all, I’m Australian, and we have
been under the grip of Superannuation for almost as long as I have been
working. However, back when Superannuation was introduced, the majority
of workers could still work under relatively fair labour laws – that
is, if you worked over a certain amount of hours a week, there were
regulations which stipulated you had to be hired full-time, and all of
the benefits that this ensured, such as sick days, holidays, and,
something we know little of these days - job security.
But
now, especially under John Howard’s draconian “Workplace Relations”
laws, you can be hired for as many hours as an employer likes, under
the conditions they like, and if you don’t like it, you can be sacked
without question. There are ordinary workers now fighting in courts to
stop the government imposing almost AU$30,000 worth of fines on workers
who spoke out about their working conditions. For the average working
family, to lose your job, and then have to pay lawyers to fight off
fines of that magnitude is crippling. Now, this is very relevant to a
retiring population in a few years to come. For a start, many people
are forced into working for people as a contractor. This means you are
not employed by anyone – you have to do as you’re told just the same,
but you pay your own tax, super, insurance and other associated
business costs. So what this means is that you are paying to work, you
are paying to retire. When did that become fair?
To
top it off, Superannuation is just a big bonanza for financial
institutions. Imagine: a whole population putting away a minimum of 9
percent of their wages every week, which is then charged
account-keeping fees. (The 9 percent is paid by the employer, on top of
tax, so Super is also a very hefty burden for small business owners).
The financial institutions invest the funds into stock, bonds, whatever
they see fit (and could very well go bankrupt, and some have, taking
off with people’s life savings). In my case, I couldn’t even tell you
how much money I have in various accounts – each employer makes you
join a different one, so it is easy to lose track of your money. One
year I rounded it all up in the ‘dead super office’ of the Australian
Taxation Office (ATO). I believe I was worth approximately $500. It’s
not that this was the original amount. What little super I did have was
whittled to nothing by the extortionate fees the financial institutions
sucked out. Oh, and let’s not forget to mention: after all this, the
government is still taxing me on my super. I suspect when I (and if) I
return to Australia, there will be precious little left for me to
retire on. It’ll be a case of “when she got there, the cupboard was
bare…”
So, when I had a look at the White House’s statement on social security, I was intrigued. It read:
“The President has assured Americans that he will not change the Social Security system in any way for those born before 1950.”
So,
for people born before 1950 (and, let’s face it, most people currently
in congress making the rules), their pension will not be touched. For
future generations, a system close to Superannuation is what they have
in mind:
“As
we fix Social Security, we must make it a better deal for our younger
workers by allowing them to put part of their payroll taxes in personal
retirement accounts.”
Allowing you.
Well, gee, thanks. Isn’t that’s what’s supposed to happen to our taxes
under government management? Why does it need to go into private
corporations’ piggy banks first? Are the government just really bad at
saving money? (Don’t answer that.) What’s more, does this mean that
those who are able-bodied get a pension, but those who are in more
unfortunate circumstances can just go fly off a cliff? The ideal behind
taxes (not in their original, feudalistic form, but in a modern,
supposedly egalitarian society) is to pool money so that essential
services can be maintained. I don’t think ‘essential services’ means a
blow out in the wire-tapping budget. I mean good education, good health
care, aged care, pensions and public transport. These are just the
basics, and these needs are not being met.
The
government’s priorities are in need of a shake-up. There is no way, if
the budget is run with the benefit of the people in mind, that social
security should EVER bankrupt the system. A war in Iraq might bankrupt
it, but a retiring generation shouldn’t. It’s not up to the people, who
have been paying taxes all their lives, who are gradually having their
education, health and infrastructure funding slashed, to then fork out
for their own pension. It is not up to them to manage the funds that
the government has been employed by the people to do. If there’s not
enough money for your pension, ask, “why the hell not? Where’s my money
going?” I’ll tell you where – it’s hoisting up the market. It’s being
gambled.
The White House gives these estimates:
“In 1950, there were 16 workers to support every one beneficiary of Social Security. Today, there are only 3.3 workers supporting every Social Security beneficiary. In
2008 – just three short years from now – baby boomers will begin to
retire. And over the next few decades, people will be living longer and
benefits are scheduled to increase dramatically. By the time today’s
youngest workers turn 65, there will only be 2 workers supporting each
beneficiary. Under the current system, today’s 30-year-old worker will
face a 27% benefit cut when he or she reaches normal retirement age.”
I
give you warning, from a country that has lost its sheen and it’s
history of fighting for worker’s rights, the country who was one of the
first to give woman the vote, the so-called ‘lucky country’ – we’re not
so lucky anymore. Once your government institutionalises a system that
essentially pours money into the coffers of its corporate mates, you
have no hope of ever getting your pension back. May we be thankful
Vegemite has so much vitamin B, because it’s all we’ll be able to
afford when we retire. Don’t make the mistake we made. Fight for what
you’ve got, and demand that funds be re-routed into government-managed
social security, which is responsibly managed to ensure all people can
retire in peace. Whether it’s 40-odd working years of part-time or full-time labour, it’s all the same in the end. A lifetime.
If you need me, I’ll be in Sweden…
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