Tuesday, September 9, 2008

Growing Pressure For Pension Increase

The financial plight of the pensioner is becoming a powerful political issue with increasing pressure being brought to bear upon the Government. One by one, Government Ministers are being forced to admit that the pension payment is inadequate and that they could not survive on the money. And yet they insist that nothing will be done until after the official review is completed.

Longer term, two things need to be done. One is that the pension needs to be restructured so as to provide a reasonable safety net, and the bottom line there is that it needs to increase. Second, the Compulsory Superannuation Guarantee needs to be reformed to deliver the benefits it was originally intended to provide. That means quarantining Super Funds from tax as they grow, and increasing the contributions at the front end. Those are the steps that must be taken for the long term.

But that doesn’t solve the immediate problem. The fact is that a single aged pensioner is about $30 a week below the official poverty line. The fact is that the Australian pension is below international standards. The fact is that Pensioners need help now, not next year. These facts are already plain to see and no review or inquiry is going to change any of them. That’s why Seniors Australia is campaigning for an immediate $30 per week increase, which they say will cost the budget about $1 Billion. But they are not the only ones.

It seems that Senator Steve Fielding is also pushing for an immediate increase, only he has called for $70 per week. Now this is the same Senator Fielding who last week chose to block the Federal Government’s planned increase to the luxury car tax. That move has denied the Federal Budget more than $500 Million revenue. The Government is not giving up on its tax increase, and plans to bring the legislation back into the Senate again in a few weeks. So, here’s an opportunity.

With the budget surplus topping $22 Billion, an increase for pensioners is not out of reach. Perhaps Senator Fielding could be persuaded to allow the luxury car tax increase in return for an increase to the aged pension. It’s just a thought, but while the Government has to depend on the minor parties and independents in the Senate there is an opportunity to push the plight of the pensioners further up the agenda.

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