Simon Pressley of Propertyology said Australians should be encouraged to invest in their future, rather than rely on the “massive time bomb” of the aged pension.
“I’d argue that we [society] discourage investment by instigating policies that appear to penalise households that are investing for their future.”
He said that there is a “huge risk” associated with the aged pension, which according to Propertyology research, blew out to cost $45 billion in the 2017 financial year, and continues to grow by $36 million every month. As a result of the financial weight of the aged pension on the economy, the country’s capacity to fund infrastructure was “significantly diminishing”.
The managing director added that 80 per cent of Australians – despite spending 45 years working – end up relying on the pension.
“The only genuine solution is to change the psyche of all Australians and encourage households to become financially sustainable by investing for their future.”
“If we don’t encourage households to invest what is the alternative? The public won’t cop the massive tax increases needed to increase the value of a pension. And for decades, governments have failed to fund sufficient new infrastructure for our growing population.”
Pointing to taxes on property investors “which far outweigh any negative gearing deductions”, he said the idea that investors enjoy “unfair” tax deductions was incorrect.
“The $7 billion that investors paid last year on land tax could fund Brisbane’s Cross River Rail project plus four or five major hospitals for regional cities.”
According to the Propertyology research, only 18 per cent of the 3.68 million Australians over the age of 65 are financially independent with 12.6 per cent still working and 69.4 per cent receiving the aged pension.
“The aged pension is an inverted pyramid that is already suppressing the growth and development of our country,” he said, adding: “There’s a huge risk of it toppling over and wiping out any chance of prosperity for future generations.”
[Related: Auswide increases rates for investment loans]
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