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Pensioners, policy and practicalities
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Now here’s an interesting test for Kevin Rudd. Momentum is gathering for an aged pension rise or one-off handout to pensioners of some kind in 2008-09, before the current review by Jeff Harmer lands in February. Let’s be blunt here. People on the aged pension are an interest group like any other. Their claims to taxpayer dollars should be evaluated, like any others, critically, and based on evidence. Of course, if you’re foolish enough to say that on radio, like I was, you’ll cop plenty, but it’s true nonetheless. There are other groups – homeless people, remote indigenous communities spring to mind — that arguably are a higher priority for taxpayer dollars than many pensioners. And even the smallest changes to the pension carry significant fiscal impacts. Saying that is not evidence of malice toward the aged, merely that we can’t afford to not think carefully about this. I noted during the election campaign, back in my early, funny Crikey articles, that the electoral muscle of the grey lobby was growing rapidly and it would mean politicians would throw more and more money at them. This is quite separate from the reality that the aged pension — particularly for single women — is barely sufficient for a dignified existence. We need to keep the policy and politics separate here. When pension groups complained — utterly incorrectly and unreasonably — that they had missed out in the 2008 Budget, the Prime Minister and the Treasurer swiftly declared that retirement incomes had been part of the Henry review all the time, and that it would report by February. The sort of timing that meant it would feed into the 2009 budget. It worked for a while, but it’s starting to come apart. First Wayne Swan, then Julia Gillard, then Lindsay Tanner and now Kevin Rudd, have admitted they couldn’t live on a pension. It’s become the question du jour. I can’t wait for someone to ask Brendan Nelson if he could live on a pension. He’ll probably cry when he answers. Peter Costello, it should be noted, will probably be able to live quite nicely on his pension, thanks very much. If only he’d sod off and take it. This week, Labor backbencher Brett Raguse — a name surely crying out for a career in a three-star French restaurant — weighed in on the issue. He too couldn’t live on a pension, and he told the ABC “special attention” should be given to “people who are really feeling the pinch right now”. Later, in the doubtless intimidating presence of the Prime Minister himself, he backtracked and said that he didn’t want an extra payment right now. South Australia’s Steve Georganas, however, was making similar noises. Hitherto, the Opposition has been reluctant as well. Margaret May got a mugging from Malcolm Turnbull for proposing a pension increase earlier this year, and Brendan Nelson, who never normally never met a populist cause he didn’t like, referred the matter to an internal party review. But Nelson’s desperation is finally getting the better of him, because he’s now calling for a one-off handout this year (i.e., another one, in addition to the one already budgeted) and is apparently considering proposing a significant pension increase. He also wants the pension indexed by a higher rate than CPI, a position endorsed by the Greens. Mal Brough had something to say about this last year, when he explained that the Howard Government had linked the aged pension not merely to CPI but to Male Total Average Weekly Earnings – it can’t fall below 25% of that figure. As Brough noted, this meant considerable increases above CPI since 1997 when the link was established, amounting to nearly $3000 pa for a couple. Presumably Nelson isn’t aware of that, or he thinks his own Government’s policy was a dud. Possibly the former — Crikey has been told Nelson’s pension plan was cobbled together quickly, and without input from either of the relevant shadows — Tony Abbott and Malcolm Turnbull — whose offices only found out when Nelson chief of staff Peter Hendy rang them last night in anticipation of the ABC revealing it. The only consistent long-term advocates of a pension increase have been the Greens, who have argued for a $30 a week increase, which would cost $3-4b p.a. All part of the Greens’ campaign to develop into a full-fledged political party, not just a protest vote-based environmental group. But Rudd’s approach is the right one. We bag the Government for ceaseless reviews, inquiries and Green Papers, but when dealing with such vast sums of public money, well-evidenced policy, rather than anecdotes — and we all have anecdotes about how insufficient the pension is — is necessary. Access to the pension, the role of lump sum payments, the interaction with superannuation, who is most in need of an increase — are all critical issues that need to be worked through. And another one-off payment this year would perpetuate the Howard Government’s handout-based policy approach, which Brendan Nelson seems unable to quite shake off despite no longer being in government. But whether Rudd can hold out against the pressure to Do Something about pensions before next year is the question. If the Opposition tips over into arguing for an increase, Rudd, Swan and Jenny Macklin will find themselves under the hammer. Rudd wants to concentrate on big-picture reform, but it’s the retail politics that keep tripping him up. We saw it with petrol and grocery prices and it’s happening again with pensions. There’s no option for Pensionerwatch here. There are no easy options at all — just very expensive ones. |
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19 Comments
Brendan Nelson was asked apparently and said with some emotional flourish, although disappointingly for Bernard Keane, with nary a tear : “I would have to go back to living on the bare bones of my backside as a student to survive on $273 a week”
Anecdotally pensioners are doing it tough …. well maybe and then again maybe not. The monetary part of the pensioner may be quite small, but is there as safety net. If they as many do own their own home and are the recipients of Health Cards and other perks, they are reasonably comfortable, and if not that presumably what the review of pensions is all about.
I live in the NT and am many years past the pension age and am privately funded, even so I have a Health Card, I receive discounts on my rates, electricity, car registration and insurance and many businesses give a Seniors Discount of up to 10% of my purchases, my doctor bulk bills and there is a free hospital.
Marion demonstrates my point perfectly. Pensioner ingrates should apparently only be protected from living in extreme poverty - poverty per se is ok. And you are being compared to working families. Clearly there is nothing sexy about pensioners to special interest supporters at the moment.
Pensioners - your first task is to explain that you are too old to work, and therefore can’t be compared to working families. Get with the pity program.
Marion’s comments may just indicate a hard-right wing view of the world, but there are likely many people who feel the same way about pensioners - empathy is required !
As a single/female/home owner in her 70’s I guess I am supposed to be happy that so many MP’s and Government departments are THINKING about and EMPATHISING with my struggle to keep this much loved roof over my head. I don’t think so! My long experience through various Governments has taught me that there are many long and expensive lunches between their thoughts and actions.
Meanwhile I ponder on what mathematical genius has worked out that a single pensioner requires just a little more than half that of a married couple.
My household insurances, maintenance, rates and taxes, electricity, vehicle running costs etc are the same as those shared by couples.
Many thousands of us are in the same sinking boat as we try to keep our heads above water and maintain our hard earned independence.
Pensioners are doing it tough but they are not the only ones. With child care costing about $200 a week, after maximum government subsidies, single parents on average wages are really struggling. Take about $10,000 in after-tax dollars off the average wage and see how easy it is to pay for rent, food, medical expenses and so on for an adult and a child. The only thing harder would be throwing in the job and trying to support yourself and a child on a pension. Isn’t it about time the Federal Government recognised that paying for child care is an essential expense for working parents and made it fully tax deductible, putting working parents on the same footing as workers without dependents.
Bernard Keane: what would mankind do without such a searingly clear economic rationale, such as you provide here.
JK Galbraith would have you for lunch…..
I am of pensionable age, still working and perhaps uncharitably am not disposed to paying even more of my tax dollars to the many pensioners who have failed to provide for their old age or have used tax devices to warrant pension payments.
I have no problem with increasing payment to those suffering real hardship, but there are many who have ample assets or tax havens and are undeserving of further largesse.
The federal government should not be persuaded by the emotive utterances of grey power., The real issue is providing for those in all walks of life who need funding to survive, not providing further support for many who are greedy or were irresponsible in the past.
The leader of the opposition will of course try for cheap points, but hopefully fairness to all will prevail.
Why don’t they sell the family home and live off the proceeds? They can move in with their children or into a retirement village. Or why not share their house with an other single pensioner and pool their pensions? Or perhaps, re-marry. What happened to their savings, if any? Did they spend up big on a car, a caravan or a holiday before going on the pension? Rent a room in their house to a pensioner who doesn’t own a house and can’t afford to rent a flat on their own. Baby sit the kids next door or mind them after school for pay from a working mum. How can they be crying poor when I see them smoking, drinking and playing the pokies?
When Dr Nelson starts crying crocodile tears in the House next week as he moves a bill to give aged pensioners a $30 a week increase, costing around one and a half billion dollars a year, best he recalls this. Last week he blew a 600,000 hole in the surplus in the Senate on the expensive vehicles tax. Next he intends to stop the new medicare exemption for single tax payers earning over 50,000 dollars and will kill the alco pop tax measure, another massive hole in the surplus. These points im sure will be hammered home to the Opposition over and over. Its time Nelson started acting like a political leader and not an opportunist more concerned about his personal future , standing in the polls, and how he can keep his collegues support. I doubt the good doctor is as worried about the oldies as he is making out, he is afterall a pollie…once a pollie always a pollie.
There are families on low incomes who are supporting children, paying rent or morgages, paying all their bills and paying their rates and taxes in full, they do not get the many concessions and perks that pensioners do. Pensioners may not be living in the lap of luxury but taxpayers’ money was never meant to provide that. The pension was meant to make sure that those who, during their working life, were not able provide sufficiently for their old age, did not have to live in the social exclusion of extreme poverty. Providing reduced charges for council rates, telephone, vehicle insurance, entertainment, hairdressers, light and heating, hospital and healthcare, free public transport, home help when required plus a regular (if meager) sum of money does not demonstrate uncaring, tight fisted taxpayers who begrudge help to those who really need it. On the other hand we are paying excessively generous pensions and perks to former politicians. All the pension money could be thrown into the one pot and doled out more equitably.
My advice to pensioners is get with the program. The reality of Post-Modern Australia is that it doesn’t care that you lived through recessions, wars, made sacrifices & built the nation. All govt. cares about is: Can you answer YES to being a special interests group.
Therefore my advice is to start acting like a special interests group. Forget about the ethics & values you were brought up on. Honesty, hard work and self-sacrifice are not virtues in post-Modern Australia.
Start sqeaking & squealing & you will surely get some pork. Moer specficially:
Start doing some serious pensioner crime & blame the man.
Say the Pal has given you CJD syndrome
Appear on A Current Affair as an oppressed minority group & say you won’t take it any more
Apply for a sports or arts grant (put a naked pensioner on that Art magazine & claim exploitation).
Interesting change of heart - Nelson bleeding for old age pensioners on $273 a week.
No such compassion when refugees walked out of detention centres with not even a blanket much less a roof for shelter with a Special Benefit pension of $202 per week. Under 21 years got even less.
Having the Immigration Minister as your previous landlord did not enhance chances with real estate agents rental services either.
Refugees lost dollar for any dollar earned -working as little as 15 hours per week at $14.00 an hour killed the pension and with it a measley rental assistance of $30 per week.
This truth has not stopped the embittered urban myths circulating that “Refugees get paid more than pensioners”, currently doing the rounds of the armed forces.
Rudd should resist a general increase at this time. He should look at increasing the rental allowance. This would assist pensioners most in need.
Compassionate Conservative. I imagine your comments were made in jest. But just in case they weren’t, I would like to answer a couple of points.
Let’s look at pensioners looking after children. She/he is a ninety year old, who has difficulty walking with a Zimmer frame. Todays kids have had no parental guidance, because it is politically incorrect to chastise the little brutes. They are moving little nightmares. How is the 90 year old meant to cope?
What has a pensioner ever done to you that you would wish them to go to a concentration camp? OK their teeth clack together and thanks to their wrinkles and despair it is hard to tell one from another. But to send them to concentration camps, is despicable.
Re-marry? Are you serious? There is a loading of about 1 man to every 50 women. Thank god I’m not a pensioner, because the thought of re-marriage is anathma to me. Marriage, as with religion, was invented by men to control women. I can’t comment about their gambling, as I don’t believe in gambling and wouldn’t know a betting venue if I fell over it. I’m sure you meant it as a questionable joke. But, as I said, it is a bloody questionable joke.
Anecdotally pensioners are doing it tough …. well maybe and then again maybe not. The monetary part of the pensioner may be quite small, but is there as safety net. If they as many do own their own home and are the recipients of Health Cards and other perks, they are reasonably comfortable, and if not that presumably what the review of pensions is all about.
I live in the NT and am many years past the pension age and am privately funded, even so I have a Health Card, I receive discounts on my rates, electricity, car registration and insurance and many businesses give a Seniors Discount of up to 10% of my purchases, my doctor bulk bills and there is a free hospital.
Like Mike R I am working though well into the pensionable age and don’t feel especially generous towards the aged generally. I liked the blunt reply of one politician to an irritating pensioner lobbyist’s bleat about their having paid all those taxes for so many years (some of them it can be conceded did) as though they had somehow invested for the future. He said “and what do you think politicians did with all that money: haven’t you noticed: they blew most of it”. As I kept an eye on the affairs of a single woman pensioner who died recently at 95 (mostly just making sure she received a decent amount of interest on her modest savings) I wonder why Bernard suggests that the pension is particularly inadequate for single women. My observation suggests that single women manage far better than single men. I would be very pleased to see an explanation some time somewhere.
Let’s tie a one-off payment to the Luxury Car Tax.
It is depressing, isn’t it; the way we treat our old folks. Do the politicians reflect the public perception? Or do they guide the public perception? Apparently it is OK to give our sporting bodies millions of dollars to field yet another and numerically bigger than Beijing, inflated team to contest the London Olympics in 2012, yet helping the pensioners to live a half way decent life is too expensive to contemplate.
I think I’ve had a bright idea-I’m not saying it’s a new idea-but surely it would be a good idea for one of your. writers to live for a week on the single womens’ pension. It could make for fairly harrowing writing. Sort of last coins for candlewax .
Several comments here. Firstly, has anyone considered that aged pensionsioners are tax payers too, thanks to the GST. Even someone who is on a pitiful amount of $270 per week pays GST.
Secondly, the pensioner issue can easily be fixed - Politicians need to take a big gulp and stop paying pensions to anyone who retires on superannuation. Those who retire on superannuation should use this money before they are given access to taxpayer funded pensions. That is why employers pay superannuation for their employees so they can be self funded retirees, rather than putting superannuation into accounts and living off enough interest so they can get the taxpayer funder pension.
Thirdly, lift the pension to $300 per week and then allow the pensioner to work (if able) up to say a further $300 per week. The above would solve several problems, the pensioner would not be expected to live below the poverty line, and they would pay payg tax on the extra $300, as well as still paying gst. it would keep the pensioner working with the possibility of helping the employment issue and with ongoing purpose in their life, which I feel would keep pensioners happy, contented and ultimately healthy.