Avoiding austerity - caring for our aged

The Council On The Ageing (NSW), for instance, is calling for single aged pension payments of 35 per cent of male average total weekly earnings (MATWE). Specifically, the citizen’s representative group has developed a new “Cost of Living in Retirement” benchmark, which would translate to $750.60 a fortnight for singles, and $1125.90 a fortnight for couples. Alternatively, the Combined Pensioners and Superannuants Assocation, has made the case for a more tightly targeted regime of assistance “to be paid to around 1.5 milllion pensioners with little or no additional income”.

More specifically, the CPSA has argued in favour of an extra $80 a week for single pensioners who do not have additional income. These pensioners are those who would otherwise have insufficient income “to purchase essential goods and services”.

Finally - in the past, the author has made a personal call for a rate of 30 per cent of the male average total weekly earnings for single recipients.

Today, this would amount to $674.52 a fortnight. Rates for couples could be set at 90 per cent of the full single rate for each recipient. (for a total of $607.86 a fortnight each). This proposal is a more modest compromise for the time being.

Importantly, such reform could be implemented alongside the CPSA’s proposal for targeted supplements.

Even here, though, such redistributive measures could well necessitate tax reform. In the context of a devastated revenue base, and a ballooning deficit, there is little option. Many part self-funded retirees have lost an enormous portion of their income with the crash of the share market, and the rapid decrease in interest rates.

In addition to targeted supplements, reform in this field needs also to be accompanied by an easing of means tests at the lower end of the scale.

All such demands are achievable given the political will and decency of our politicians.

Importantly, by redistributing wealth within the economy, there would be no resultant drop in aggregate demand. If anything, those on lower incomes spend a greater proportion of their wealth. As a consequence, such measures could even increase demand.

Labor holds primary responsibility as it is in government. But Malcolm Turnbull, also, has sought to make political capital from the plight of aged pensioners. Instead of calling for tax cuts, perhaps instead he should “put his money where his mouth is”.

Other factors in achieving dignity, comfort, purpose and social engagement

Support for carers needs to be increased substantially so as to provide - where appropriate - a viable alternative to admission to nursing homes. Such support should be especially generous: given that it would ultimately save money which otherwise would be devoted to more intensive and costly professional care.

These reforms should be sufficient to ensure that pensioners not in care do not suffer malnutrition. But for those - for whatever reason - who are unable to shop for their own groceries - continuing support is necessary for “meals on wheels” programs. And here, there is need for thorough-going quality control.