Australians might be about to receive the biggest bump to their pension in almost a decade, but will it be enough to see the government returned at the next election?
After years of miserly increases, changes to age and asset eligibility and warnings the pension system is unsustainable due to an ageing population, the federal government has announced the biggest increase to pension rates since 2013.
Cost-of-living pressures are shaping as a key issue at the next election, as COVID, floods and the war in Ukraine take their toll on everyday budgets and nest eggs.
“This next election is about a choice, about our economy and how we can best manage our economy to manage a better future,” said Prime Minister Scott Morrison.
“These cost-of-living impacts are real and the Australian government understands that.”
Full age, disability support and carer pensions will jump by $20.10 per fortnight for singles on 20 March to $987.60 per fortnight and by $30.20 for couples to $1488.80 per fortnight.
The federal government is keen to point out that this increase is the biggest seen since 2013, as it looks to reassure voters it remains committed to the most vulnerable Australians.
“Pensioners will see a 2.1 per cent increase to their payments – the largest increase since 2013,” says social services minister Anne Ruston.
“This is putting money in the pockets of all Australians who rely on our social security system and, in particular, older Australians.”
Lingering effects of the pandemic plus widespread floods are wreaking havoc on supermarket prices, supplies and staff, with most states still recording thousands of new COVID cases every day.
Now, Russia’s invasion of Ukraine is pushing prices of many goods even higher due to escalating fuel prices and, hence, transport costs.
It’s even having an effect on the nation’s superannuation balances. Super fund returns dipped into negative territory in 2020, before bouncing back. But now the war is sending returns back into the red.
“While it’s too early to tell what the outcome will be, the rate at which we have seen this year’s financial returns slip away has started to cause concern for people,” says Kirby Rappell, executive director at SuperRatings.
“The latest supply shock following the war between Russia and the Ukraine places further pressure on the cost of living and inflation levels and adds to the likelihood interest rate rises are approaching.”
With those external factors still weighing heavily on the economy, federal opposition leader Anthony Albanese says the pension rate increases amount to nothing more than ‘spin’.
“This government is so out of touch that they’re prepared to spin out there saying how well off pensioners are going to be,” Mr Albanese said on Monday.
“When they get to the supermarket to buy products they find that everything‘s gone up.
“The rise in the pension will not keep up with the costs of living. Pensioners are doing it really tough at the moment.”
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