Pensions

grizzly1911

Generali wrote: »

The problem is that the British Government spends such a vast sum of money already that they can't spend on stuff like this which is where tax really should be spent.

http://en.wikipedia.org/wiki/Government_spending

The Aussie Government spends about 1/3rd of GDP, the UK's not too far short of half of GDP and it really is hard to see what we miss out on.

I think the big thing is that the UK taxpayer is happy to subsidise poverty to an extent that the Aussie one isn't. Our minimum wage is high (about $20-$25/hour for an adult) but you don't get much state help beyond that. It's pretty much impossible to live off the dole long-term so people don't, they go and get a job.

I accept we may spend too much. Probably to do with the fact we don't earn enough to continue our grandiose vision.

We could avoid the cost of war disability if we didn't enter wars that didn't directly affect us or our sovereignty.

Loughton_Monkey

Generali wrote: »

The problem is that the British Government spends such a vast sum of money already that they can't spend on stuff like this which is where tax really should be spent.

http://en.wikipedia.org/wiki/Government_spending

The Aussie Government spends about 1/3rd of GDP, the UK's not too far short of half of GDP and it really is hard to see what we miss out on.

I think the big thing is that the UK taxpayer is happy to subsidise poverty to an extent that the Aussie one isn't. Our minimum wage is high (about $20-$25/hour for an adult) but you don't get much state help beyond that. It's pretty much impossible to live off the dole long-term so people don't, they go and get a job.

A fine practical example of what many people thunder against in the UK economy. The more we subsidise so-called 'poverty', the more we will get of it.

I also find the word 'poverty' rather offensive and reckless when applied to UK citizens. Especially when it is defined as a certain percentile, thereby creating a situation in which if we doubled benefits, and doubled minimum wage overnight, we would have exactly the same number of people in 'poverty'.

MFW_ASAP

It would be interesting to see an example of someone in 'poverty' in the UK and have a look at the circumstances that got them there.

CLAPTON

pensions are simply part of the 'pay' package.

defined benefit pension are completely affordable in the same way as a defined contribution or a wage packet is affordable


if of course the total package is set too high, then it is set too high.
little to do with pensions as such

Kennyboy66

Generali wrote: »

The problem is that the British Government spends such a vast sum of money already that they can't spend on stuff like this which is where tax really should be spent.

http://en.wikipedia.org/wiki/Government_spending

The Aussie Government spends about 1/3rd of GDP, the UK's not too far short of half of GDP and it really is hard to see what we miss out on.

I think the big thing is that the UK taxpayer is happy to subsidise poverty to an extent that the Aussie one isn't. Our minimum wage is high (about $20-$25/hour for an adult) but you don't get much state help beyond that. It's pretty much impossible to live off the dole long-term so people don't, they go and get a job.

For the UK in 2013 it will be 45% not 50% and projected to fall to 40% by 2017 (we shall see).

For Australia in 2012 it was 36.4% not 1/3rd.

Apart from the demographic difference (Australia much younger population) and the fact that compared to the UK it is a much more closed economy , I'm guessing that the main differences are Health, Pensions, Debt interest and Defence

1) Australia wisely went down the superannuation route many moons ago - as well as having less pensioners as proportion of the population

2) Defence spending in Oz is about 1.6% of GDP, UK is still 3%

3) Oz has next to no debt, so so debt interest payments. UK debt interest is approx 3% of GDP

4) Health - I'm presuming that only roughly half to 60% of Aus health spending is public (pure guesstimate) - the rest is private.

So stripping out the exaggeration on UK spending, the under-estimate on Oz spending, the fact that Oz has not really been affected by the global recession remotely like the UK and the 4 points above, its not really anything to do with the UK "subsidising poverty" is it ?

MFW_ASAP

CLAPTON wrote: »

pensions are simply part of the 'pay' package.

defined benefit pension are completely affordable in the same way as a defined contribution or a wage packet is affordable


if of course the total package is set too high, then it is set too high.
little to do with pensions as such

Public sector Defined Benefit pensions defer the 'pay' package to following generations. There will be some public servants who are retiring today and will have some of their pension paid by people who are being born tomorrow. How is that fair? Taxpayers paying for public sector workers who provided a service they couldn't use because they weren't even born.

Linton

MFW_ASAP wrote: »

Public sector Defined Benefit pensions defer the 'pay' package to following generations. There will be some public servants who are retiring today and will have some of their pension paid by people who are being born tomorrow. How is that fair? Taxpayers paying for public sector workers who provided a service they couldn't use because they weren't even born.

All pension schemes ultimately defer 'pay' packages to the following generation, or at least those who work in the next generation. Building up a DC pension pot is just one way of reserving your place in the queue, as is being guaranteed a FS pension. The major problem I see with an FS pension is that the pension is guaranteed independent of external events such as inflation or life expectancy. With a DC pension the pension pot owner suffers from inflation along with everyone else and increased life expectancy results in decreased annuities.

MFW_ASAP

Linton wrote: »

All pension schemes ultimately defer 'pay' packages to the following generation, or at least those who work in the next generation. Building up a DC pension pot is just one way of reserving your place in the queue, as is being guaranteed a FS pension. The major problem I see with an FS pension is that the pension is guaranteed independent of external events such as inflation or life expectancy. With a DC pension the pension pot owner suffers from inflation along with everyone else and increased life expectancy results in decreased annuities.

I'm afraid I disagree, I feel that DC (money purchase) pensions benefit the future generation because they are taking money earned today (via pension funds) and investing it in companies that employ current and future generations. The pensions are fully funded.

Public sector final salaries are not fully funded (some are not funded at all) and rely on future generations of taxpayers to pay for them. Private sector FS pensions (well the few that exist) remove profits from the companies and prevent them re-investing these profits in their expansion.

DC pensions are invested in companies via shares or invested in the country via gilts. FS schemes are just a burden on the taxpayer or a burden on the few companies that still have them.

CLAPTON

MFW_ASAP wrote: »

Public sector Defined Benefit pensions defer the 'pay' package to following generations. There will be some public servants who are retiring today and will have some of their pension paid by people who are being born tomorrow. How is that fair? Taxpayers paying for public sector workers who provided a service they couldn't use because they weren't even born.

Linton has provided the right answer : all pension provision is provided by future generations as they are the only one's that will be actually producing goods and services that pensioners will consume.

Unless you actual hoarde tins of beans, frozen meat etc then the working people provide for all pensioners needs.


In any event those future generations are consuming the infrastructure that their parents have built up, been to schools and Uni's, gone on trains and buses, used NHS, used electricity and gas all that has been provided for them.

MFW_ASAP

CLAPTON wrote: »

Linton has provided the right answer : all pension provision is provided by future generations as they are the only one's that will be actually producing goods and services that pensioners will consume.

Unless you actual hoarde tins of beans, frozen meat etc then the working people provide for all pensioners needs..

Pensioners don't need to horde tins of beans, they need to horde the means to buy the tins of beans.

The burden on future generations is not in the production of the tins of beans because this provides them with jobs and an income. It's having to produce the beans and then give them away for free to pensioners that causes the burden.

Pensioners with an income provide by past earnings will buy tins of beans produced by the future generation, transferring wealth from the pensioner to the tax payer.

Pensioners with an income provided by taxpayers will buy tins of beans produced by the future generation, taking wealth from the taxpayer and then giving a portion of it back.