Last week, we dwelt on how low Australian pay was causing pain to many families.
Well, according to a new survey, it’s really all in the mind.
The Sydney Morning Herald reported the Turnbull government has amassed less debt than the May budget shows, and the median Sydney property is $100,000 cheaper than in reality.
The paper claimed it had received 240,000 responses to a Fairfax Media pre-budget survey. Apparently, readers believed they are now poorer than they actually are, with the average income hitting $1108 per week, $55 less than the actual average of $1163 per week.
The responses came a week before new wages figures showed Australia had now entered negative real wage growth territory, stalling at an all-time low of 1.9 per cent as inflation hit 2.1 per cent, driving up the relative cost of living.
Economists and business groups have criticised the government’s prospects of bringing the budget back into surplus by 2020-21 which rely on ‘‘ optimistic’ ’ assumptions of 3.75 per cent wage growth.
KPMG chairman Peter Nash told the paper:
“I’m really worried that when my kids are pushing me around in a wheelchair they are going to push me over the edge and say ‘thanks dad for all that debt that you left us with, because your generation spent our money as well as your own.’”
One man not worrying about low wages is Anthony Pratt, owner of a packaging multi-national.
The 57 year old tops this year’s Financial Review Rich List with record personal wealth of $12.6 billion, thanks mostly to his booming Pratt Industries cardboard box manufacturing and recycling business in the United States.
‘‘ Money is a great scoreboard of success ,’’ Mr Pratt told the paper.
While most of us are saving, one group is now being targeted for not spending enough.
Cash-hoarding retirees are set to be encouraged to spend down their savings, says Jeremy Cooper, chair of retirement income at Challenger, an annuity provider.
About 700 Australians hit retirement age every day, consequently the country’s ageing demographics will soon start to take a toll on consumption growth and economic activity, reports The Australian.
Mr Cooper, chairman of retirement income at annuity provider Challenger, said the government was now designing its so-called Comprehensive Income Products for Retirement in a bid to stop retirees from sitting on their nest eggs.
Recent research from the Australian Institute of Superannuation Trustees found that the average annual expenditure for self-funded households was just under $40,000. For retirees on a part-age pension, the rate of annual spending was nearly identical . Retirees on the full age pension spend less than $25,000.
The average 65-year-old male who spends at the minimum drawdown rate on the pension will die with 31 per cent of his savings intact. Only 69 per cent of his superannuation savings would have been spent.
It’s a global problem. A new analysis from the University of Michigan found the average American over the age of 60 cut spending 2.5 per cent per year, or about 20 per cent over a 10-year period.
This comes as super funds are predicting the possibility of double-digit returns for super funds this financial year – meaning those savings will grow even faster.
Figures from superannuation researcher Chant West show a median return of 10.1 per cent for the 10 months of the financial year to April 30 for ‘‘ growth’ ’ investment options. They have between 61 and 80 per cent of the money in growth assets, such as shares and property, and are the category of investment option that most people have their money in.
Chant West director Warren Chant told The Sydney Morning Herald it is ‘‘ almost certain that they’ll finish the year in the black for the eighth consecutive time – and quite possibly in the double digits’’.
Enjoy the weekend!