New research from the Challenger group has found Australians over 55 have reached their largest share ever on the electoral roll at 39 per cent, and this share will keep rising until they ultimately represent half the entire electorate over coming decades.
Older Australians operating as a voting machine on single issues have been crucial in past elections, undermining Bill Shorten’s attempt to cut benefits on franked dividends in 2016 and giving former PM Scott Morrison a scare in the 2019 campaign, after he had introduced the “transfer balance cap” tax on retirement income.
As the latest polls suggest, the 2025 race will be tight. The major parties are split on lifting tax on super. The ALP remains focused on a new wealth tax hitting those with more than $3m in super, while the Coalition has repeatedly voted against the idea.
Challenger chief economist Jonathan Kearns, who has run the numbers on older voters, says: “You would think when you see these numbers that politicians would be paying close attention to the issues affecting retirees. It’s clear that we now have to put in place equitable and sustainable retirement policies.”
Kearns also says: “The plan for a new tax on super — based on unrealised gains — has got to go back to the drawing board.”
While the new super tax proposal has been a lightning rod for retiree dissent, more broadly retirees are concerned about the cost of living and retirement system tax settings
As Ashley Owen of Owen Analytics suggests: “Many retirees live more frugally than necessary, and they die with as much super as they had at retirement — one reason for this may be a rising fear that the current system is not feasible and it may not be in place for their entire life.”
Both parties also have to make calls on key retiree measures, including the deeming rate, which has been unchanged for years.
The deeming rate is the rate of return the government “deems” retirees have made on their investments for pension purposes. It has not been changed since May 2020 as both the Morrison and Albanese governments decided to freeze the rates at pre-Covid levels in subsequent federal budgets. This year’s federal budget is set for March 25, with the deeming rate due to be reset on July 1.
At present the key deeming rate is 2.25 per cent and the cash rate is 4.1 per cent — under the governing rules of the policy, the deeming rate would naturally be increased at this stage, creating a dilemma for both sides of parliament.
Meanwhile, representative groups are complaining loudly that the Centrelink system is not capable of managing the current load in pension payment processing. Centrelink recently confirmed it had a backlog of nearly 34,000 age pension claims, with the process now taking on average 35 days.
“If you went back 20 years ago the retiree vote was not that important, things have changed dramatically in recent times”, says Kearns.
The research from Challenger says there are 10 marginal seats with a “high concentration” of retirees. The electorates which lead the list are Lyne and Gilmore in NSW, Hinkler in Queensland and Flinders in Victoria.
James Kirby hosts the twice-weekly Money Puzzle podcast.
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Older Australians will represent four out of every 10 voters in the May election — a warning to all parties that winning over “the retiree army” will be crucial.