On the air with Minister Butler

Below is an edited copy of the transcript of Minister Butler’s radio interview with ABC 891 Adelaide host, Ian Henscheke, yesterday. Visit the Minister’s portfolio website or a full version of the transcript.

IAN HENSCHKE:        Now, we’re talking about age now. Age before beauty, of course, with Minister Mark Butler, Minister for Ageing. Now, this I suppose is something that a lot of people are not looking forward to, that’s the idea of continuing to work beyond the age of 65.

Now, it’s apparently going to be a reality for many people. We had someone farewelled here the other day who was 60 and they were looking to heading off and having a wonderful time, and then I pointed out to some of the younger people at the farewell that they might be working ’til they’re 70.

Mark Butler, is that going to be the case if you’re, say, a 25-year-old now? Can you look forward to working ’til you’re 70 before you get the pension?

MARK BUTLER:        Well, not before you get the pension, but I think what we’ll see is, to use a hackneyed old phrase, horses for courses. I think if people want to continue to retire at the traditional age of 65 then the pension is there for them to be able to do that. But the pension age of 65 was set 100 years ago when the average life expectancy for a man was in the 50s.

Now it’s about 25 years greater than that, so if you reach 65 today statistically you’re likely to live for another quarter of a century and what I know talking to seniors across Australia is that a number of people approaching the age of 65 don’t necessarily want to retire.

They don’t want to work the same arrangements they did when they were younger, but a recent survey I saw said that only 40 per cent of people approaching the age of 65 want to retire. They certainly want to downscale the level of their work, but they don’t want to leave the workforce entirely, necessarily. So it’s really got to be a matter of choice, I think, and that’s the point I’ve tried to make in the article in the The Advertiser today –

IAN HENSCHKE:        Although that article comes out in a different way, it says the pension bill rockets from $16 billion to $48 billion in 15 years. I mean, so, suddenly you – it appears from that that the Government has to find $30 billion extra. Is that correct?

MARK BUTLER:        Well, those numbers are about right but, look, we’ve been looking at this as a country now for a good 20 years, and that’s why Australia is in such a better position, really, than any other economy in the world on this point.

Twenty years ago the Hawke and Keating Governments introduced compulsory superannuation. A few years ago we made changes to the pension that will make sure that these things are sustainable.

We’ve been making hard savings in the budget that are focused on the long term so that we’re able to say to people approaching the age of 65, the age pension is as solid as a rock. It is there for you to take up at 65 if you want to, but if you want to continue to work on a part-time basis then there are arrangements in place for you to be able to do that as well.

The discussion that older people have with me when I travel the country, if they are thinking about working, is that they’re concerned that there is still very significant age discrimination in our workplaces, and so I think what we do need to have a national conversation about is getting back to a bit of respect for age and a bit of respect for the experience and the wisdom that older workers are able to continue to deliver to workplaces well into their 60s, and even beyond.

IAN HENSCHKE:        Well, in fact we had a very robust discussion here on this program which involved, I think, the Commissioner for Ageing coming down to see the Parliament here, ’cause she felt there was actually discrimination taking place, so I know that Commissioner for Ageing has said that she’s spoken to you about this. So, I mean, is there a lot of work that you’ve got to do to, I suppose, ensure that people that do want to work are not being dealt with improperly and illegally?

MARK BUTLER:        There’s a lot of work we need to do. I think there is still a very significant cultural problem in our workplaces around age, and I’d like to say that that only cuts in at 65, but actually what our research shows is that age discrimination starts to cut in around 45. People over 45 report time and time again consistently to all of the authorities that they often go to interviews and are just looked through. If their date of birth is on their resumé, often they’re put to the bottom of the pile.

Now, that is just not in the economy’s interest, it’s not in the interest of individual employers, firstly because older workers are valuable workers. I mean, research that the Human Rights Commission did over the last couple of years showed that an older worker was worth about $2000 per year more to their business than a younger worker because they have lower levels of absenteeism and they have higher levels of retention, so there is less turnover costs involved in over workers. Still…

…

IAN HENSCHKE:        Now look, Mark Butler, this story that’s in The Advertiser today’s got a headline saying you’ll need to work longer, Minister. Is that a misrepresentation of what you were trying to say? Because from what you’re saying there, this is not going to be compulsory, or even a compunction on people.

MARK BUTLER:        Well, unfortunately, this is the nature of the beast with media headlines. I mean, I don’t think the headline reflects anything I’ve said in the story, and as I’ve tried to say to your listeners, this has to be a matter of individual choice. The thing I’ve heard in the two and a half years I’ve been Minister for Ageing, as I’ve travelled the country and literally talked to thousands and thousands of seniors at different forums, is that so often they actually want to continue to work.

I mean the survey I talked about earlier, says that only 40 per cent of baby boomers want to retire at 65…

IAN HENSCHKE:        [Talks over] Oh so only 40 – so 60 per cent want to…

MARK BUTLER:        …60 per cent don’t.

IAN HENSCHKE:        They want to keep working?

MARKBUTLER:        That’s right. They overwhelmingly usually don’t want to continue the sort of work arrangements they had as younger people, so they want to scale back the hours, they want a bit more flexibility, which is why last week Bill Shorten announced that we will be introducing a legislative right to request flexible work for people over the age of 55.

We’ve seen in the UK that this can be very beneficial for older workers. So it’s got to be a matter of individual choice, but we’ve got to have systems in place as a Government that value older workers continuing to work. So, from 1 July 2013, this year, for example, older workers will be able to get superannuation for the work that they perform after 65 for the first time.

IAN HENSCHKE:        Well that’s a great change. Glad we’ve heard that. Now, on another matter, though, do you think if you’d got the mining tax right, and we’d done it the way Norway did, and have a Sovereign Wealth Fund, and had all this money tucked away, we wouldn’t have to worry about this issue? I mean it would be – there would be less need for people to work to fill this gap which is, what, $32 billion in pension bills.

MARK BUTLER:        Well, I mean, Norway’s commodities boom happened many, many years ago, ours really only started in the mid part of last decade. So, we haven’t had that long to prepare for it, and as you know, our Government has been trying to put in place taxation arrangements for the mining sector that recognise its value to the Australian economy, but also recognise that the resources that are being dug up are owned by the Australian people. And so the benefits of that boom should be spread to them.

The major change that we made as a country was, as I said earlier, the Hawke and Keating Government’s decision to introduce compulsory superannuation. Australian workers now have about $1.4 trillion in retirement incomes because of that decision. And that amount is growing every year by an extraordinary value.

So, we did make changes, different to Norway’s decision, but we made changes to introduce compulsory savings for Australian workers, which is one of the reasons why we’re in such a better position on this question than really almost any other advanced economy that you can imagine.

IAN HENSCHKE:        Alright, thank you very much for your time this morning. Federal Minister Mark Butler there, Minister for Mental Health and Ageing.