Don't blame retirees for the pension increase

Treasurer Wayne Swan is under intense pressure with his 2009 Budget to honour a commitment to increase the base rate for the age pension. However, in doing so he has also blundered into effectively blaming retirees for tough Budget measures likely to hit Australia’s high earners.

Whichever way you look at it, the Treasurer will be regarded as a villain by various sections of the community when he unveils the Budget on May 12. A global economic recession, jittery share markets, a faltering dollar, billions of dollars in lost revenue, and demands everywhere for tax cuts, handouts and pension increases. Who would want the job?

Although Budget decisions are traditionally and officially kept secret until disclosed in Federal Parliament, the reality is the political machine deliberately leaks like a sieve and unpleasant decisions are often carefully “leaked” to the media as a controlled test on how they might play to the community if formally announced. It’s an effective ploy and is being heavily employed this year.

Pensioners have been assured there is an increase on the books for them but the line coming out of Canberra is, oh dear, the cost to the rest of the community to pay for all this is not pretty!

Yes, the Government will honour pre-recession promises of tax cuts, but high income earners will cop it by having their taxpayer-funded 30 per cent private health insurance rebates slashed, or so the leaked information tells us.

Confirmation that this week’s Budget would provide for the base rate of the age pension to rise came a few days ago, with reported remarks by Treasurer Wayne Swan that increasing the pension would require tough measures elsewhere.

It was an unnecessary guilt trip for retirees. I have a special interest in legal issues affecting the elderly and my boutique legal practice on Queensland’s Gold Coast has many retiree clients. I deal with their concerns daily. Right now, they are frightened. The stress of coping with day to day living on a fixed income is something most salary and wage-earning Australians cannot relate to.

They crave security in their retirement years and having done their bit for Australia’s growth, they quite fairly would like a little back to pay for the food, medical bills and other daily living expenses. At present, the pension does not give them anything like the security they need.

Relief is at hand, we are assured. But expected single pension increases of up to $30 a week are likely to be part-funded by measures that will target Australia’s high income earners. Superannuation tax breaks are expected to be slashed to fund the pension increase, with next Tuesday's Budget expected to boast the largest deficit in Australian history.

In my view it was “unhelpful” of the Treasurer to promote the image that the country must somehow make “sacrifices” for pensioners.

In the current economic environment, attitudes like that only provoke jealousy and resentment in the community. Let’s get one thing very clear - retirees deserve a pension increase. This is not a luxury thing for them, it’s about increasing their pensions to a point where they can buy food and pay their bills.

The Treasurer’s reported remarks about the pension increase have only fostered a guilt feeling in retirees.

Mr Swan reportedly said increasing the base rate of the age pension would be one of the hardest commitments to meet, indicating that it would require substantial cuts in other areas of spending for the Government to deliver on this promise in the Budget.

People on higher incomes would be targeted to help fund the pension rise.

Almost immediately there was community lashback against pensioners on news media forums with comments about taking money from people's superannuation, to provide for people who don't have super. The culture of jealousy and resentment is thriving, thanks to the Treasurer.

I believe the Treasurer should come out and publicly state that retirees deserve a pension increase.

The pension issue has been in the works for a long time. It goes back to way before the global economic worries and recession. There was a formal investigation last year into pension levels which recommended an increase.

Retirees, more than anyone, know about surviving through tough times. They are not asking for luxury handouts, just enough to pay the bills and live on. They are certainly entitled to that, and more.

I urge the Treasurer and others not to "blame" retirees for what is their right.

Everyone is being conditioned to expect some tough measures in the Budget but to publicly indicate that the pension rise will require heavy measures elsewhere is unfair on retirees. The economic situation is the culprit, not our pensioners.

Another uncertainty worrying retirees is a real fear the planned increase in aged pensions could penalise elderly married couples.

While the Federal Government has virtually announced a $30 a week increase for single aged pensioners, there has been a disquieting silence around any change to the couple’s rate.

The Federal Government needs to make its intentions known as a matter of urgency.

The Community Services Minister Jenny Macklin back in March reportedly said the Government was committed in the budget to addressing the adequacy of pension rates.

The Government gave a payment to pensioners in December, with $1,400 for singles and $2,100 for couples, which was timely and needed. However it was a one-off, and since then pensioners have been told to wait for a review of the base pension rate, conducted by Ms Macklin's departmental head, Jeff Harmer.

That review was handed to the Government in late February but instead of making the details of the review public, the report was kept private by the Rudd Government with any decisions to be part of the Federal Budget. So for some time now the Government message to retirees has been - we will tell you when we want to.

More than two million Australians over 65 receive a full or part pension and retirees facing economic hardship would be unhappy about some of the latest Rudd economic stimulus package payments going to expatriates and even some prisoners in jails.

Meanwhile retirees are being told to wait, ignoring the fact that the December payments would already be eaten up by bills now. Pensioners can’t budget for their future when they don’t know what their pensions will be.

A typical couple receive an aged pension of about $1,040, (including rent assistance where needed), per fortnight compared with the single pension rate of around $560 with rent assistance per fortnight.

I can quote a Queensland example where a couple reportedly paid $626 in rent, leaving just $414 to pay bills, buy food and run their car for two weeks.

An increase of $30 a week in the singles rate would be welcomed, but what about the couples? All this talk of raising the pension rate to a certain percentage of the couples’ rate is disquieting to couples. It strongly suggests they will get nothing.

During negotiations over the $42 billion stimulus package, the Government promised to lift the single pension by $30 a week, indicating the single aged pension rate would be raised to two-thirds of the married rate.

Now is the time for the Federal Government to speak up and state whether the couples pension rate will also be increased, and if not, why not?

Above all, it is also time for the Government and its Treasurer to acknowledge that retirees deserve the pension boost coming to them, and not use pensioners as a scapegoat or community whipping boy, to bear the brunt of voter lashback over harsh economic decisions contained in the 2009 Budget.