Australian Retailers Association calls for pension test changes to encourage older people back into the workforce

Article by Eli Greenblat courtesy of the Australian.

With retailers struggling to find workers, there are growing calls for the pension income test to be changed so older Australians could ease labour shortages at the shops.

Australian Retailers Association chief executive officer Paul Zahra is calling for the government to relax income test rules around the pension.

The Australian Retailers Association, the peak body for the nation’s $360bn retail sector, has lent its considerable political weight to supporting calls to make employment income exempt from the age pension income test, allowing pensioners to supplement their income while also alleviating severe labour shortages across the country.

If the newly formed federal government after this weekend’s election enacted this change to the pension it could unleash an army of older Australian workers who could quickly and easily fill the thousands of empty staff rosters that have hamstrung many businesses and put a handbrake on economic growth.

ARA chief executive Paul Zahra said there are over 29,000 job vacancies in the retail industry alone driven by the tightest labour market in more than 50 years, and that without the usual numbers of overseas workers and students, these gaps won’t be filled using traditional recruitment methods. 

“Retail has always been a powerfully diverse employment sector and we need to think more creatively about how we can mobilise new segments of our Australian workforce such as mature age workers and pensioners,” Mr Zahra said.

“We would like to see this as a priority for the Federal government immediately following the election. Should the new government enact this considered change, a new workforce of pensioners can be unlocked and able to choose work that suits them in an economy that desperately needs their efforts.”

A number of groups have called for changes to the pension income test in the lead up to the election as a way to help older Australians earn more money at a time when the cost of living and inflation is outpacing the pension as well as replenish the labour market at a time when it is suffering from grave shortages.

With over 29,000 job vacancies, The ARA says more needs to be done to encourage senior workers into the retail sector.

National Seniors Australia has led a campaign on this issue, arguing many pensioners need to work to survive or love to be back in the work environment but are financially penalised for doing so. In New Zealand pensioners do not lose their pension when they work, and that they simply pay tax on their pension and employment income. This has generated a situation where only 2.9 per cent of pensioners work in Australia, against 24.8 per cent of pensioners who work in New Zealand.

Before the recent Federal budget a number of coalition backbenchers reportedly pushed Treasurer Josh Frydenberg to introduce the measure that would release a ‘grey army’ into the economy struggling with capacity constraints caused by decades low unemployment rates of 4 per cent.

Lack of staff has been cited by many retailers this year as a major drag on their business recovery as well as a cost as they seek to source, secure and train new staff.

Mr Zahra said Australia couldn’t have an economic recovery without a retail recovery and skills shortages along with supply chain challenges are enormous constraints on this segment of our economy. 

“Retailers have been consistent in their calls for a solution to the current labour shortages of international students and other visa holders in the country, formerly key demographics of the retail workforce.

“Additionally, those on the aged pension are interested in returning to work from a sense of social duty and responsibility as well. They are a group critical to the fabric of our communities, and this generous sense of social duty should be freely welcomed, rather than significantly constrained by mechanisms such as the Aged Pension income test.”

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