As reported in YOURLifeChoices on Tuesday, from 20 March 2013 pension rates will not only increase in line with cost of living indexation, but will also benefit from the introduction of the Clean Energy Supplement. This will result in an increase of $35.80 per fortnight on a single Age Pension. So far this news item has generated 84 comments, most of which declare that the pension needs to be increased by a considerable amount more before it even begins to cover the basic cost of living.
The pension increase was announced in a press release by the Australian Government, stating:
“The Gillard Government is delivering around 3.5 million Australian pensioners a boost to their household budgets this month with an increase in the pension and the start of the new Clean Energy Supplement.”
On Facebook, Jenny Macklin has also claimed that Labor has delivered $5382 more a year for single pensioners.
And Treasury analysis suggests that families will be $2500 a year worse off should the coalition be elected. The response from Opposition Leader, Mr. Abbot, as reported in The Australian, is that a Coalition government would deliver “tax cuts and pension increases without a carbon tax”.
Read Minister, Jenny Macklin’s comments this week
YOURLifeChoices website report
Opposition Leader, Tony Abbots comments in The Australian
What to believe? Yes, there is a pension increase and a Clean Energy Supplement coming through for pensioners on 20 March. But is this a gift?
NO! It is a scheduled cost of living adjustment – a regular indexation of base pension rates which is adding $21.70 a fortnight and an extra 60c in supplements. It is higher than previous increases because costs have increased.
As most pensioners are well aware, base pension rates are indexed twice a year (March and September). As our editor Debbie has noted, it can be argued that the increase in the base rate of pension is a result of a robust economy, rather than a decision by the Federal Government to help “pensioners who are doing it tough”.
In addition the Clean Energy Supplement (announced in July 2011 as part of the introduction of Carbon Price Mechanism) is not a new payment, just a manifestation of last year’s promise to recognise and compensate for the effects of the new tax.
However, has Labor given more to pensioners than its predecessor, the Howard Government? Yes, is the simple answer.
In 11 years of economic sunshine, the Howard Government, apart from scheduled indexation, did not raise the rate of the pension once. It did offer a one-off discretionary $500 payment to pensioners, but as a discretionary payment, it could, of course, be withdrawn at any time.
So yes, Labor has increased the pension more in real terms and Treasury modelling of the compensation for the Carbon Price Mechanism shows pensioners should receive slightly more than they pay out.
And will Mr. Abbott deliver pension increases without a carbon tax, while achieving a surplus? In the absence of any real costings it is impossible to say, but he will diverge dramatically from Liberal National Party practice if he does recognise the needs of the most underpaid sector of the Australian population – those on an Age Pension.
Time will tell!
What do you think? Has the Gillard Government been more generous to pensioners than its predecessor, the Howard Government?