When you see a headline that claims pensioners are paying an effective tax rate of 118%, you’re inclined to think it's BS clickbait. But this time, it’s not. And it poses this question: does any politician care about the injustices of our federal and state tax systems?

While the answer is probably yes, the problem is that they’re not smart enough or caring enough to do the hard work to understand those unfair taxes, so they then jump up and down to make changes happen.

Of course, we have the problem of politicians wanting promotion within their parties, which means having guts on important matters runs second to these representatives of ours who put their vested interest above us. Two classic lines uttered so eloquently by former Prime Minister Paul Keating are relevant here: Never stand between a Premier and a bucket of money and In the race of life, always back self-interest. At least you know it’s trying.  

Along with others, I’ve underlined the injustices of the NSW payroll tax system on this website, and on 2GB with my colleague Ben Fordham. To date, no politician from the Minns’ Government has tried to reach out to ask what my concerns are. That includes the Finance Minister, Courtney Houssos, whose public servants act like the gestapo desperately seeking money and defying the fundamental principles of a quality tax system. I speak with experience here. What’s happening in this country?

Courtney, in case you need some educating, even ChatGPT will tell you that the principles of a good tax system is that it’s simple, adequate, easy to administer, transparent and, wait for it, FAIR!

Any time you want to know how unfair your public servants are, please reach out to me.

But the tax system problems aren’t just at the state level. The SMH today shows that if a pensioner decides to work (and this economy of ours has business sectors where workers are in short supply), their effective tax rate for daring to remain relevant and useful for the economy is nearly 120%!

How does that happen, when the top federal tax rate is 45% plus a 2% Medicare charge?

The SMH’s Millie Muroi has looked at figuring by the Retirement Essentials for super fund HESTA and this is what she reported: “A single pensioner pays an effective marginal tax rate of 78 per cent when increasing their employment income from $30,000 to $35,000. That is because their additional income is taxed but also reduces their age pension from $18,875 to $16,375, meaning they effectively take home just $1,100 of the extra $5,000 in employment income they’ve earned.”

The numbers above were based on a retiree with $300,000 in super. Earning income means there are losses to their pension. This means that the tax penalty is magnified by the smaller pension.

The big losses or tax hit to a pensioner comes when the extra income creeps to around $50,000, which might be understandable, but even if they earn between $15,000 and $30,000, the tax take is close to 66%!

HESTA CEO Debby Blakey got it right when she told the SMH: “Many of our retirees are keen to work, not just for financial reasons, but for connection or their mental well-being. Part-time or casual work in retirement helps people retain a sense of purpose and fulfilment, while addressing critical workforce demand and boosting the broader economy.”

Fixing this injustice is really a job for Treasurer Jim Chalmers, who has to balance the need to reduce his budget deficit, while not making the tax system unfair.

News reports from the recent productivity round table in Canberra never told us that getting our smart, keen-to-work retirees back into the workforce could actually help productivity and represent a good social policy. While someone might have brought it up, it didn’t get reported, maybe because no politician really cares about injustices and unfairness in our tax systems.

I care and I plan to rattle the can and those politicians who are choosing to ignore tax collectors behaving badly.