Peter Martin the Economics Editor for the The Age commented on a report
Matthew Taylor from the Centre for Independent Studies and one of the authors of the report to be released on Monday said
“It could be popular if it’s explained carefully,” said . “Pensioners would have to overcome their emotional attachment to their homes. They would need to see that they are not just places to live, but untapped assets.”
The idea is to use reverse mortgages to encourage retirees to borrow against their homes to cut their access to the pension. I’d like to see the explanation that would convince pensioners to do this.
The centre believes the changes would force 70 per cent of full pensioners on to the part-pension and between 24 per cent (singles) and 32 per cent (couples) off the part-pension altogether. And I’m sure that they believe that this would not cause incredible hardship for the oldest of our citizens.
Of course not, they just have to sell the home they’ve lived in the last 50 years.
His idea that pensioners living in houses with a high capital value should be either forced to sell them or re-mortgage to reduce their access to the pension must be coming from someone who has never met such a pensioner.
There are lots of them in my street. They are predominantly Greek migrants, in their late 80s and living in the house they bought when they came to Richmond and where they raised their families.
Most of them live in single or double fronted workers’ cottages which they purchased when Richmond wasn’t trendy or expensive. Many of their houses would be worth around or upwards of $1 million on the market today, more if it has been renovated.
These are not rich people, they drive old 1970s models Holdens and many of them are on the pension. They worked hard all their lives often jobs were not particularly well paid but they were diligent savers and encouraged the children to be the same.
Many of them are very pleased that they will be able to leave the children someof money when they die and when the family home is sold.
They have a thing about family and family ties. Many of them came from villages in Greece where the family home had been passed from one generation to another for many years. It’s a tradition.
But Matthew Taylor who is a Research Fellow in the Economics Program and who has has a Bachelor of Economics with Honours from Monash University would put a stop to all this.
Take a stroll down Mary Street, Matthew. Talk to some of the people that your policy would affect.
Actually don’t do that. It would probably be quite bad for your health.