In an attempt to silence critics of the proposed changes linking the age and disability pensions with inflation, rather than the Male Total Average Weekly Earnings (MTAWE) from 2017, the Federal Government has offered to set up a three yearly independent review of pension rates.
The independent review could recommend increases to pension rates which would be considered by the Federal Government at budget time, but would not be binding.
Coalition backbencher and critic of the proposed changes, Andrew Laming, called the proposal “promising”. “I think this is the first glimmer of hope, the first shining beam of light that we have a solution to this problem, which would make changing of pensions each year something that’ll be evaluated on a regular basis, done so independently and hopefully in some way depoliticised,” he said.
Social Services Minister Scott Morrison suggested that the review would act as a “safety net”, but said that the pension system must remain sustainable. “This is a very serious issue for the future of the country, the pension is currently being received by around 2.5 million Australians and it is costing taxpayers obviously significantly in the order of over $40 billion,” he said.
Prime Minister Tony Abbott said that the offer showed how serious his Government is about getting the reform passed. “Under our proposal, pensions will go up twice a year every year, they’ll maintain pace with cost of living,” he said.
Deputy Opposition Leader Tanya Plibersek was critical of the idea. She pointed out that the review would only show us that the new lower indexation rates mean pensions are inadequate and that the government may or may not accept the independent review’s advice. ‘It’s meaningless … pensioners know they are being dudded,’ she said.
The offer of an independent review into pension rates is nothing more than lip service from a desperate Coalition Government attempting to push through another unpopular policy. Tony, you aren’t fooling anyone.
Social Services Minister Scott Morrison openly confirmed that the review would act as a “safety net’ and then proceeded to say that the findings of the review would not be binding. This independent review offers little to no assurance to those 2.5 million Australians who are already doing it tough.
Shadow Minister for Families Jenny Macklin hit the nail on the head in her response to the proposed review by suggesting that a regular review was a good thing, but it should not come at the cost of a “proper indexation method”.
As with the previously unpopular GP co-payment policy, the Coalition Government currently lacks the support in the Senate to push through any changes to the pensions. Hopefully the Coalition’s latest stunt won’t sway any of the crossbench.
What do you think? Is an independent review a good idea, regardless of whether the changes to indexation successfully pass through the Senate? Rather than cut the rate of indexation on pensions, from where do you think the government should source budget savings?