Wealthy Australians shouldn’t be concerned about news in the AFR this morning that the Government is looking to include family homes in the pension asset test.
That is the message of Minister for Social Services Scott Morrison, who ruled it out categorically on Fran Kelly’s breakfast show on RN this morning.
But the report, which says the government is canvassing the inclusion of the family home as a way to help make the pension system more sustainable, does appear to have some supporters. Parliamentary Secretary to the Treasurer Kelly O’Dwyer said yesterday that:
Leaving aside for the moment whether it’s the right thing to change the assets test, one of the key questions that advocates of change will need to address is how to be fair to those who decided to overcapitalise in their house over a number of years, possibly decades, precisely because of that exemption for the family home.
The AFR reports a big part of this move is related to the intergenerational report. But it also shows that there is nothing about intergenerational equity in this plan as floated this morning.
The paper says:
All parties, the government included, agree that Baby Boomers, whether already retired or approaching retirement, would be exempt from any change that would have to be transitional so those affected would have ample time to prepare.
Morrison ruling out using the family home for the assets test now is good news for retired and retiring Baby Boomers. But it’s just another sign that Boomers remain a protected species, the third rail of Australian politics, and it is Gen X, Y and beyond which will once again pay the price – first for inflated housing and then via a tax on their home in retirement.
There is no intergenerational equity in that plan.