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Australians heading into retirement as renters at risk of poverty, think tank warns

Two prominent research houses have raised the alarm about how little many Australians will have in their nest eggs when they retire.

Key points:

The Centre for Independent Studies warns too many Australians will head into retirement as renters on low income
Researchers forecast that just one in two retirees will own their own home by 2050
The Association of Super Funds of Australia suggests about $25,000 would be enough for an individual, and $30,000 for a couple to live on “comfortably”

It is clear that if you are fortunate enough to earn a decent wage, and you own your home, you will have — what the experts describe — as a comfortable retirement.

However, the Centre for Independent Studies warned too many Australians would head into retirement as renters on low incomes.

“There's a core group of people who could constitute as much as 25 per cent of age pensioners, who don't own their home, who have little or no savings, and who are genuinely struggling to get by on the ..

Two prominent research houses have raised the alarm about how little many Australians will have in their nest eggs when they retire.

Key points:

  • The Centre for Independent Studies warns too many Australians will head into retirement as renters on low income
  • Researchers forecast that just one in two retirees will own their own home by 2050
  • The Association of Super Funds of Australia suggests about $25,000 would be enough for an individual, and $30,000 for a couple to live on "comfortably"

It is clear that if you are fortunate enough to earn a decent wage, and you own your home, you will have — what the experts describe — as a comfortable retirement.

However, the Centre for Independent Studies warned too many Australians would head into retirement as renters on low incomes.

"There's a core group of people who could constitute as much as 25 per cent of age pensioners, who don't own their home, who have little or no savings, and who are genuinely struggling to get by on the age pension — especially in capital cities where rent is quite high," Centre for Independent Studies research fellow, Simon Cowan, told RN Breakfast.

"Those people, they're not saving enough in super that they're going to be comfortable in retirement."

Fears around low levels of home ownership

Lobby group the Committee for Sydney, which maps how renting is on the rise in the city, recently reported more than 40 per cent of neighbourhoods across greater Sydney now had a majority of renters.

There are now concerns that an unprecedented number of younger Australians are permanently locked out of the housing market.

And it has produced some anxiety around the levels of financial comfort that many can expect to have in retirement.

The Grattan Institute, which recently published a paper on retirement savings, explained that, as home-ownership rates declined, the risk of people falling into financial hardship would increase.

"The area where there is a real problem is if they don't own their own home," the Grattan Institute's Brendan Coates said.

The Centre for Independent Studies warned the problem would get worse because younger generations on low incomes were less likely to own their own home.

Both research houses forecast that just one in two retirees would own their own home by 2050.

It is a sobering message to many approaching retirement on low incomes who are not able to make it onto the property ladder.

"Rates of financial stress among those who don't own their own homes are about four times higher than pensioners who do own their own homes," Mr Cowan said

Wake up call to save more for retirement

The Centre for Independent Studies wants to encourage younger Australians to pay more attention to their super.

"At the moment, two out of every five people who retire at the age of 65 have no superannuation at all," Mr Cowan said.

"The median balance for a person in retirement is zero.

"There's a significant core of people that have no super at all."

Researchers said single, older women were more likely to fall into this category.

How much do you need to retire on?

The Association of Super Funds of Australia suggests about $25,000 would be enough for an individual, and $30,000 for a couple to live on "comfortably" for 20 years in retirement — which is the age pension plus $3,000-$5,000.

If you want a life in retirement where you can afford to eat out more often and have domestic holidays, the Centre for Independent Studies suggested you would need $40,000 per year in income.

To get to that level, you would need to be earning $15,000 to $20,000 from your super, in addition to the age pension.

To get that much over the course of a 20 to 25-year retirement, you're probably looking at a little over $500,000 in your super balance at retirement.

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Asia is now a play thing for the great powers

United States Vice President Mike Pence's remarks at the end of this year's summit season just about blasted the word “co-operation” out of the APEC acronym.

Amid ill-concealed US-China tensions, it had already been looking out of place.

Pence unveiled US plans to help Australia and Papua New Guinea — APEC's host this year — expand a military base on Manus Island, which is in PNG. In September, Australia had already announced funding for an upgrade of the facility.

Former Australian foreign minister Gareth Evans famously declared in 1993 that APEC was “four adjectives in search of a noun”. (As one of APEC's founding fathers, he could be forgiven for getting the parts of speech slightly wrong).

But 25 years on, “co-operation” is looking doubtful.

It's summit season in Asia
The Asia-Pacific Economic Cooperation forum set sail in Canberra in 1989. Two former prime ministers, Bob Hawke and Paul Keating, lay some claim to its parentage. APEC has grown to boas..

United States Vice President Mike Pence's remarks at the end of this year's summit season just about blasted the word "co-operation" out of the APEC acronym.

Amid ill-concealed US-China tensions, it had already been looking out of place.

Pence unveiled US plans to help Australia and Papua New Guinea — APEC's host this year — expand a military base on Manus Island, which is in PNG. In September, Australia had already announced funding for an upgrade of the facility.

Former Australian foreign minister Gareth Evans famously declared in 1993 that APEC was "four adjectives in search of a noun". (As one of APEC's founding fathers, he could be forgiven for getting the parts of speech slightly wrong).

But 25 years on, "co-operation" is looking doubtful.

It's summit season in Asia

The Asia-Pacific Economic Cooperation forum set sail in Canberra in 1989. Two former prime ministers, Bob Hawke and Paul Keating, lay some claim to its parentage. APEC has grown to boast 21 member economies (where China, Hong Kong and Taiwan are listed as separate member economies).

APEC is part of summit season in Asia in November, and the one closest to Australia's heart, given its origins in Canberra. Three other big set pieces are also held within this week each year and bring all the key players in the region together, ostensibly to talk about advancing cooperation, community building and grappling with common problems.

Two others relate to ASEAN, the grouping of 10 south-east Asian nations — its annual summit, and the ASEAN Plus 3 meeting where they bring in South Korea, Japan and China. Then there is the East Asia Summit, which comprises the 10 ASEAN members, plus Australia, China, India, Japan, New Zealand, South Korea, the United States and Russia.

Handshakes couldn't hide the tensions

These talkfests give states and economies, great and small, the chance to gather to try to advance a broad-ranging, positive agenda.

But the many handshakes, photo ops and positive sounding joint statements could not mask the reality of hardening US-China geopolitical competition.

It is a cruel irony that a group of meetings created to advance co-operation became the platform for what amounted to a very public drawing of lines of great power competition.

Feelings were mixed when it was announced US President Donald Trump would go to Europe for the centenary of the World War I truce this year, instead of Asia's summits. The signal that the President does not prioritise the region is unmistakable.

During his visit, Pence put on a stern face on US policy, and in his speech to the APEC CEO Summit he reinforced the United States' wish to build a relationship with China, "based on fairness, reciprocity, and respect for sovereignty". In earlier comments to the Hudson Institute, he accused Beijing of stealing military blueprints: "and using that stolen technology, the Chinese Communist Party is turning plowshares into swords on a massive scale…".

Mike Pence looks at Xi Jinping, whose face is obscured. Everyone is wearing matching red shirts.

Washington now sees itself in full-spectrum competition with China for regional and global influence.

Pence portrayed China as an aggressive and almost imperial power with a malign regional vision.

In contrast, he emphasised that the US wanted to protect an open and rules-based system of genuine partnerships. He underscored the long-term nature of this commitment.

The problem, both for Washington and its partners, is that this new muscular approach to China is, as yet, not fully resourced, and does not align the military aspects with trade — notwithstanding the Manus announcement.

Trump's economic nationalism jibes badly with the interests of its partners and its long-term regional strategy. A free and open Indo-Pacific sits uncomfortably with America's economic nationalism, imposing tariffs on allies and pleas for multilateral approaches being summarily dismissed.

Morrison responds to reports of "diplomatic blow-up" at APEC summit

Xi Jingping fails to soothe fears

At the same CEO summit, Xi Jinping gave a rare major address outside of China. Like Pence, he sought to lay out a vision for the region that presented China as a force for economic openness, integration and development.

Continuing the themes first articulated at Davos in 2017, the unstated but obvious point of contrast was with America.

Xi also rebutted criticism of the Belt and Road Initiative, declaring it was neither a trap nor a geopolitical gambit but an "open platform for cooperation".

What happens when countries can't repay their Chinese loans? (Photo: AP)

But as with his earlier efforts to paint China as a defender of economic openness, the claims remain unconvincing.

Cold War-style bidding race

Hosting APEC in PNG was fitting, given the south-west Pacific has become a key site of US-China competition.

The Manus announcement, along with another that a group of Western allies would collaborate to drive a massive electrification project in the country, gives a concrete sense of what this means for the region.

As in the Cold War, when Soviet-American rivalry led to bidding wars in the developing world, today China and the US are competing for influence in the form of infrastructure and development funding.

A woman walks past one of many signs dotted around Port Moresby in anticipation of President Xi Jinping's visit to Papua New Guinea

No unified message

If the speeches laid down rhetorical battle lines, APEC's conclusion showed the consequences of this competition.

For the first time in the grouping's history, APEC members were unable to agree on the wording of a final communique. While a new Cold War is not yet here, this is another worrying step toward a serious rift in the global economy and geopolitics.

The shot of the round desk is the leaders meeting underway at 2018 APEC Economic Leaders' Meeting  Haus.

Great power competition dominating Asia

The biggest loser of the summit season is probably ASEAN. Founded in 1967 to wall off the newly independent states of south-east Asia from Cold War competition as the Vietnam war escalated, the grouping's principal purpose has been to ensure the region does not become the wrestling mat of great power competition.

It had been crucial to ensuring this goal was met in the Cold War and its aftermath. Events of this past week show it is finding that much harder to achieve as the geopolitical temperature rises.

If there were any doubts, Asia's summit season confirms that the region has entered a new phase.

Great power competition is now Asia's most important dynamic.

Even though the set piece theatre is about community building and cooperation, the reality is that China and the US have irreconcilable visions for the region and its future.

The only question is how much they are willing to pay to prevail in the contest for Asia's future.

Nick Bisley is head of Humanities and Social Sciences and professor of international relations at La Trobe University. This article originally appeared on The Conversation.

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The Brexit mess could spell the end for a no longer ‘United’ Kingdom

Behind the scenes at Westminster and the teetering fate of the British government lies an even more profound change in British politics: the very real possibility of the break-up of the United Kingdom.

In this situation Australia needs to tread carefully and maintain its good relations with what has emerged as its more stable European partner, the European Union, while offering silent support for whatever governments or countries could emerge from Brexit.

Is the UK headed for dissolution?
The United Kingdom is made up of England, Wales, Scotland and Northern Ireland.

The publication of the Brexit draft withdrawal agreement — a hefty 585-page tome — has revealed what has been implicit in the “British” vote to leave the EU all along: that Brexit is an expression of English nationalism that will unwittingly lead to the break-up of the UK.

Behind the government's rhetoric of “global Britain”, there is no such thing as the “British people” in a political sense any more.

The refer..

Behind the scenes at Westminster and the teetering fate of the British government lies an even more profound change in British politics: the very real possibility of the break-up of the United Kingdom.

In this situation Australia needs to tread carefully and maintain its good relations with what has emerged as its more stable European partner, the European Union, while offering silent support for whatever governments or countries could emerge from Brexit.

Is the UK headed for dissolution?

The United Kingdom is made up of England, Wales, Scotland and Northern Ireland.

The publication of the Brexit draft withdrawal agreement — a hefty 585-page tome — has revealed what has been implicit in the "British" vote to leave the EU all along: that Brexit is an expression of English nationalism that will unwittingly lead to the break-up of the UK.

Behind the government's rhetoric of "global Britain", there is no such thing as the "British people" in a political sense any more.

The referendum revealed significant divisions between attitudes to EU membership in Scotland, Northern Ireland and England. While Prime Minister Theresa May tried to reposition "global Britain" in relation to Europe and the rest of the world, Britain itself dissolved from within.

Prime Minister Theresa May refers to the UK as a "precious union". If only more people felt the same. An LBC-YouGov poll in March found that a majority of (mostly English) voters wanted to leave the EU rather than keep Northern Ireland in the UK.

In October, research published by the Centre on Constitutional Change showed that a clear majority of English leave voters would be happy to see Scotland and Northern Ireland out of the UK as the price of Brexit.

A man dressed in a top hat and flag draped over his shoulders holds two red placards opposing Brexit.

The irony is that it is the resistance of 10 MPs from the Ulster loyalist Democratic Unionist Party (DUP) and about 60 hard-line English Conservative Brexiteers that is most likely to plunge the UK into an existential crisis. Their intransigence will destroy the thing they profess to defend.

The text of the Brexit draft withdrawal agreement was at pains to appease concerns among the Ulster unionist community about maintaining the integrity of the UK (unsuccessfully as it turned out).

The prospect of the agreed backstop — a single customs territory that the UK could not leave without EU consent and which would ultimately keep Northern Ireland in a special relationship with the EU after Brexit — was not something Brexiteers and the DUP could stomach.

For them, the deal was a "capitulation". It was a breach of "blood red" lines that invoked the prospect of a return to conflict in Ulster.

Across the Irish Sea, Nicola Sturgeon, the Scottish first minister, asked: if Northern Ireland got special treatment, why not Scotland too?

In fact, the withdrawal agreement made no mention of Scotland at all. This disregard for the overwhelming Scottish vote to remain in the EU has pushed Scotland closer to another referendum on independence.

A man with his face painted blue with a circle of yellow stars holds a sign reading 'time for a EU turn'

A new and deep divide

Brexit has created a new and deep cleavage in British politics that cuts across old political divisions.

Far fewer people identify as Labour or Conservative than identify as "leave" or "remain".

Add the national dimension to this politics and some new options emerge. Some hard Brexiteers must be considering ditching Scotland and Northern Ireland as an acceptable cost for "British" (read "English") independence from the EU.

The ghost of empire has haunted the Brexit imaginary from before the 2016 referendum. Its critics derided "global Britain" as "Empire 2.0". But the memory of empire cuts two ways. Brexiteers see the EU as a threatening imperium. The withdrawal agreement would leave the UK as a vassal state — a state that is subordinate to another — and therefore must be rejected.

Would a second referendum help?

Brexit has also left unresolved questions about who is actually in charge in Britain. Calls for a second referendum have grown, suggesting "the people" rather than government or parliament is the ultimate source of authority on this matter.

A second referendum has the advantage of presenting the electorate with a concrete proposal for leaving. It would temper the unrealistic and downright false claims of the leave campaign in 2016. It might end the talk of "respecting the wishes of the British people" to leave the EU.

In truth we don't really know what exactly people voted for: only 6 per cent of leave voters said they thought Britain would be better off economically by leaving.

But a general election would be a better bet. It would effectively be a referendum on the deal. It might also return a government with a majority — something Britain has lacked since May's miscalculation last year.

Theresa May speaks during a press conference inside 10 Downing Street in London.

Australia's role

What does this mean for Australia? Australia was name-checked in the Prime Minister's Questions on Wednesday as a country offering the prospect of a quick free trade agreement.

Britain needs Australia in a way that it hasn't since World War II. It would be best at this delicate moment to stop recklessly encouraging the British government from the sidelines: no more talk of one-page free trade agreements.

Australia must continue with its (slow) progress on the Australia-EU free trade agreement negotiations begun in June. The EU has remained remarkably unified during the Brexit negotiations despite tensions of its own. The EU is coming out of its own crises of the past decade. Now it's Britain's turn to teeter on the brink of disintegration.

Ben Wellings is a senior lecturer in politics and international relations at Monash University. This article originally appeared on The Conversation.

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Nine-Fairfax deal to proceed after shareholders vote for takeover

Fairfax shareholders have overwhelmingly backed a takeover by Nine Entertainment, paving the way for both companies to merge by the end of this year.

Key points:

Nine's next step is to obtain court approval for the takeover on Nov 27
Provided it agrees, Nine's takeover of Fairfax will complete on Dec 7
The former CEO of Domain tried to block the deal, but was unsuccessful.

At the Fairfax annual general meeting today, more than 80 per cent of votes were in favour of the deal.

Antony Catalano, the former head of real estate website Domain, tried to block the deal by submitting a last-minute bid for 19.9 per cent of the newspaper publisher's shares on Sunday evening.

He had asked, in a letter, for the AGM to be delayed for two weeks so his 11th-hour proposal could be considered.

However, the Fairfax board knocked back Mr Catalano's offer because it was not a “superior proposal” and, therefore, unable to be considered.

“The letter contains no actual proposal that..

Fairfax shareholders have overwhelmingly backed a takeover by Nine Entertainment, paving the way for both companies to merge by the end of this year.

Key points:

  • Nine's next step is to obtain court approval for the takeover on Nov 27
  • Provided it agrees, Nine's takeover of Fairfax will complete on Dec 7
  • The former CEO of Domain tried to block the deal, but was unsuccessful.

At the Fairfax annual general meeting today, more than 80 per cent of votes were in favour of the deal.

Antony Catalano, the former head of real estate website Domain, tried to block the deal by submitting a last-minute bid for 19.9 per cent of the newspaper publisher's shares on Sunday evening.

He had asked, in a letter, for the AGM to be delayed for two weeks so his 11th-hour proposal could be considered.

However, the Fairfax board knocked back Mr Catalano's offer because it was not a "superior proposal" and, therefore, unable to be considered.

"The letter contains no actual proposal that could be considered by Fairfax shareholders as an alternative to the proposed scheme of arrangement with Nine," Fairfax said in a statement.

"The Fairfax board believes that the value and strategic opportunities offered by the scheme reflect a compelling proposition for Fairfax shareholders."

Mr Catalano said he would take legal action to prevent the deal going through.

Deal to be completed in early December

The merger — which will be the biggest shake-up of the Australian media landscape in decades — was already approved by the Australian Competition and Consumer Commission (ACCC) earlier this month.

ACCC chairman Rod Sims said at the time that Australia would be "slightly worse off" because of the lessening of competition in the news market. It would leave Australia with four major media players, instead of five.

But the competition watchdog approved the deal because it would not "substantially" lessen competition, particularly given the recent rise of online news providers such as The Guardian, The New Daily, BuzzFeed, Crikey and The Daily Mail.

Nine's takeover of Fairfax is subject to final court approval on November 27.

Provided it obtains court approval, the merger is scheduled to be completed on December 7, with the combined group beginning business on December 10.

It also means the Fairfax brand name — after 177 years of operation — will cease to exist.

The new entity, which will simply be called "Nine", will own the free-to-air Nine Network, The Sydney Morning Herald, The Age, The Australian Financial Review, a majority stake in Domain, streaming service Stan and a 54.5 per cent stake in radio network Macquarie Media.

It will be led by Hugh Marks and Peter Costello, the chief executive and chairman of Nine Entertainment.

Fairfax shares price jumped 2.4 per cent to 63 cents at 12:30pm (AEDT), but still remains around its lowest value since mid-February.

Nine Entertainment's share price also lifted sharply, up 2.3 per cent to $1.67. Its value is also around a nine-month low.

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