Australia has one of the worst rates of old-age poverty in the developed world, with more than one in four seniors living in financial hardship, a new report says.
The Organisation for Economic Cooperation and Development report, issued last night, also revealed Australian pension investments had suffered the second-worst hit of member nations.
The report said almost 27per cent of Australians older than 65 lived below the OECD's poverty threshold, which it defines as half median household income. This was higher than every OECD country except Ireland, South Korea and Mexico.
''The high risk of old-age poverty in Australia is mainly due to the relatively low level of the age pension: equivalent schemes in other OECD countries are worth 25per cent more (compared with national average earnings) than the age pension in Australia,'' it said.
Report author Edward Whitehouse welcomed the Rudd Government's recent move to increase the age pension by $32.49 a week for singles and $10.14 for couples, but said it had the ''fiscal room for manoeuvre to address the problem'' further.
''Public pension spending is only 3.5per cent of national income in Australia, compared with an average of over 7per cent of GDP in OECD countries,'' he said.
Older Australians were also disproportionately hit by the global financial crisis's impact on stock markets. The report said Australian pension funds lost 26.7per cent in 2008. Only Ireland's funds which lost 37.5per cent fared worse in the crisis, which stripped US$5.4trillion (A$6.9trillion) from pension investments in OECD countries last year.
More on the report in today's Canberra Times
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