Greens talk pension and retirement

Over the next few weeks, YourLifeChoices will be asking the major political parties what they really think about the pension, superannuation, the rising cost of healthcare and energy and other issues affecting retirees. Greens Ageing spokesperson Senator Rachel Siewert generously took time out of her busy schedule to answer some of the more pressing questions affecting our members.

YourLifeChoices: When the Age Pension was first introduced into Parliament in 1909 it was intended as a ‘reward for years of service’. How would you describe it in 2018?
Senator Rachel Siewert: I would describe it as society providing support to older Australians. In terms of saying reward for years of service, I understand where the Government was coming from in those days, but people under various international conventions have the right to social security and older Australians, particularly those on lower incomes, deserve to have that support or have a right to have that support.

So it is not solely a supplement for private savings these days?
We are now looking at universal basic income, as you would have seen. We believe that older Australians deserve that support and deserve a quality of life.

How would the universal basic income work for retirees?
We are still looking at how that would best operate, so while we support and we have had as our policy for some time a guaranteed adequate income, we are still looking at how that would work. One of the issues around a guaranteed adequate income and a universal basic income is that we need to make sure people with various needs are supported according to their needs. So for example, single parents, older Australians, you would need to look at how much they would need. We still haven’t finalised those details yet. But we support an adequate income.

So how will you define adequate? Is it above the poverty line? Somewhere above the current pension rate?
We haven’t worked out the payment rates yet because there are a lot of things we have to take into account. If you are looking at Newstart, it would certainly be above that because Newstart payments are below the poverty line. A lot of older Australians are actually living on the Newstart allowance before they move onto the Age Pension and we are very aware of that.

Talking about people out of work before the pension age, one of the zombie measures still on the table from the 2014-15 Budget is increasing the pension age to 70. Where do the Greens stand on this issue?
We are not supporting that measure for a variety of reasons. The Government is trying to save some money out of that measure and they are also implying that things are changing. The problem is that we haven’t got all the other measures right to support people if they are working until they are 70 and it doesn’t recognise that different professions and different work have different impacts on people. Someone who has been doing hard physical labour for most of their working life is not the same as someone who hasn’t had that same physical requirements.

We are aware that people are working longer and people are working until they are 70, and there have been some issues around insurance and super and all those sorts of things that have slowly been recognised and addressed. But the issues that we have been concerned about (such as) age discrimination, transitioning and what we do about the things that I have just articulated where people are physically unfit (still need to be addressed). Are you going to put them on the disability support pension, which has various issues as well? Are they going to make them stay on Newstart?

We already know that people are spending a long time on Newstart living in poverty. One of the many issues with Newstart is not only are you living below the poverty line, but you have had to wear down your liquid assets to quite small amounts, and you never have the capacity to build it back up again. You are always behind the eight-ball and there are a growing number of people in that position. Then you get to the issue of women and their lack of savings and super as well. At this present stage we are not supporting the move to (lift the pension age to) 70 until they fix up those many issues, and so far they show no signs of addressing a lot of those issues.

So the Greens are not ideologically opposed to moving the pension age to 70 once those issues have been addressed?
We have had a lot of negative push back at this stage on that 70 line, so we are not supporting it. In the longer term, if we fix all those things, people are living longer and people do want stay in the workforce, and there needs to be a recognition that some people don’t want to work full time. So how we address that transitioning? How do we address age discrimination? The Government has put a few measures in place, but it really isn’t big enough or broad enough to actually address the problem.

Looking at the current income and asset eligibility tests for the Age Pension, what do the Greens think of the current limits?
We supported the changes at the top end, which also raised the bottom end so that more people were getting access to both the part pension and the full Age Pension. In terms of including the family home in the assets test, we don’t support that.

At any level? Does a person living in a $5 million home still deserve to be on an Age Pension?
I’d be interested to know the number of people who have a $5 million house and are actually living on the pension. I would suspect there would be very few, and that that may be a situation where they are living in a very old house in a very valuable piece of land because they have lived there all their lives. We are not putting forward the proposal that you means test the house. We are not going there.

In the last Budget, the Federal Government introduced its downsizing legislation. What did you think of that legislation?
We opposed that legislation. I didn’t deal with that as a portfolio holder because it was a super measure, so it fell within the treasury and finance portfolio and Peter Whish-Wilson handled that. But we opposed that legislation because it was mainly helping already very wealthy people and it didn’t really help those who are on the lowest income. That is where we focus a lot of our attention – on those people who are on those lower incomes and the vulnerable people on low incomes.

After the next election, if you were in a position to do so, would you look at repealing that legislation or winding it back?
My understanding is that Labor opposed it as well, so it would be interesting to ask them if there was a change of Government, if they would consider winding that back. The previous Labor Government had a (policy) around downsizing which seemed not just aimed at the wealthy, but genuinely at those who do want to downsize. There are a group of people that don’t (want to downsize), they want to stay in the family home. More and more people are moving away from the concept of wanting to just stay in the family home, though. They want to downsize, but they don’t downsize for financial reasons, they downsize for other reasons, some of which are financial, but it isn’t just finance. It is about managing the space, living closer to grandchildren. There are all sorts of things people downsize for.

My own parents downsized when my dad was still working, for a range of reasons, but it wasn’t about finances. More and more people are willing to change residences for a variety of reasons. The previous (Labor) Government were looking at it from an access to housing point of view and when the Libs came in they cancelled it. It hadn’t really got going so we don’t know what affect it would have had. How do you help people downsize if you are looking from a housing point of view, but then not affect their pension if they are on a low income? That is what they (Labor) were looking at. There is room to look at downsizing, but not in the way the Government did.

How do you help people downsize without affecting their Age Pension eligibility?
The Productivity Commission looked at financing and they came up with some recommendations and the Government didn’t touch those. It involved how older Australians could handle the family home or the primary residence as they were going into aged care. That was a concept that a number of people were looking at and thinking that was not a bad concept because it actually protects the older person. I am not necessarily advocating that, but I think that it is an interesting idea that definitely involves the Government being active in that. In terms of the Government having a role so that it doesn’t necessarily affect the pension. The way I took what the Government was doing at the time, which was the former Labor Government, it was looking more at how you free up these bigger houses for families, because of housing affordability.

Where do you stand on Labor’s policy of cancelling the cash rebate for franking credits? Richard Di Natale was originally cautious about the idea, but Labor has since backtracked significantly, what do you think now?
They have changed it more along the lines of where we were coming from. Richard (Di Natale) has spoken about this a bit more in the chamber. We are supportive (it) in principle. But we are concerned about the impact on people who have relatively low incomes and the impact that would have on pensioners and part pensioners. We are supportive of the concept of where they (Labor) are coming from, but making sure we are protecting those on low incomes.

We have a strong partnership with The Australia Institute (TAI) through our Retirement Affordability Index, and one of its major recommendations to address inequality involves scrapping super concessions in favour of a universal pension that would be paid to all retirees. What do you think of that proposal?
Again we are going into issues that are Peter (Whish-Wilson’s) in treasury, but we have spoken a lot about our concerns about super and it is not really helping those on lower incomes.  Them (TAI) talking about that rate has a lot of similarities to what we are talking about with the universal basic income (UBI). You need to look at what the adequate payment is, but I am not prepared to name the adequate payment at the moment because we haven’t worked out that level of detail. We do support a UBI and we are deeply concerned about super and the concessions that help those at the wealthier end, while at the same time we have got pensioners struggling to meet their basic costs.

Energy prices and the cost of private health insurance have increased at a greater rate than increases to the Age Pension and the energy rebate. What can be done to ensure pensioners are not disproportionally disadvantaged by these rises?
We have deep concerns about private health insurance. We have also got concerns about the rising costs of energy and the fact that there are issues with gold-plating for example. The rising cost of energy is an issue for everybody.

One of the other zombie measures from the 2014-15 Budget is reducing the energy supplement to zero. Are your views still the same?
We do not support that measure.

After the next election, would there be any thought given to increasing the energy supplement to help deal with the rising costs of energy?
We haven’t looked at that, but we are looking at other measures that would address the rising cost of energy. That is not to say we wouldn’t be prepared to look at something in the right context.

The latest OECD figures estimate that a quarter of retired Australians live in poverty, which is twice the OECD average of 12.5 per cent. What do you think about those figures and what can be done to address that?
We are very concerned. If you are on the pension and you own your own home you are much better off than if you are on the pension and paying rent. There are a range of things that we need to do. We need to make sure that we have affordable accommodation, we need to make sure we have an independent process for the setting of rates for social security, including the Age Pension. We have been advocating that for a long time, so that politicians are not setting that rate. There are a number of measures that need to be taken to address the energy issue. Looking into the future, if there are less people owning their own homes as they are ageing, that is going to be a very significant issue and have a very direct outcome on people’s living standards.

What do you think of the current rates for rent assistance?
We have been addressing that issue around rent assistance but it is not the only issue we need to address to affordable housing. One of the issues there is, if rent assistance goes up, we need to make sure we don’t see a corresponding rise in rent. You can’t do that by itself, you need a whole lot of other processes in place as well, including housing stock and making sure that the rent assistance doesn’t disappear into the pocket of property owners.

Can anything specific be done to stop that from happening?
If there is a better supply of affordable housing there is less pressure on rents because there is more stock available. We need to look at other measures to make sure that doesn’t happen as well.

What is the single policy measure that the Greens support that will be of the most benefit for the wellbeing of older Australians?
I hate these questions because it implies that there is one answer to things, and there never is because it is a complex issue. All the things we have just talked about, addressing this issue of super is particularly important because we are spending a lot of money on super and a lot of that is going to help high-income earners and not those who are on lower incomes. We need to address that issue. The issue of the Age Pension and making sure that is adequate and the issue of housing is absolutely critical as well. I can’t point to one issue because there is not one issue that will fix the problem.

What do you think about the Greens’ policies on ageing?

Related articles:
Greens call for a people’s bank
Politicians’ views on the Age Pension
Opposing views on Age Pension

Ben Hocking
Ben Hocking
Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.
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