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Does this government have a short-term memory deficit? That comes to mind when yet again Mr Hockey has been let loose to find savings from pensioners. He now has an ally in Scott Morrison, who seems out to prove that stopping the boats was a fluke.
Mr Morrison said a number of times that the proposed change to pension indexation remained on the table until other measures to screw pensioners could be found to replace it. This, of course, is an embellishment of his language. But that is exactly what he meant, as shown by the measures which are apparently (according to May 7 news reports) contained in the coming budget. These measures will remove or reduce payments to 327,000 people currently on part pensions. Let’s count how many votes lost that represents.
If bringing into account the family home is ruled out, as it has been by both sides of politics, then no one on a part-pension is well enough off to afford a cut.
Under the current arrangements, pensioner couples lose any part pension when their assets outside of the family home exceed $1.15 million ($1.298 million for non-home owners). At three percent investment return (for a risk-averse pensioner couple) $1.15 million brings in $34,500 per year and $1.298 million brings in $39,000. Luxury living indeed and ripe for pillage by a government that apparently intends to provide extra money (that it doesn’t have and will have to borrow) for child care, early childhood education and small business taxation relief.
Reportedly, by reversing the change to the taper rate brought in by Mr Howard, the part-pension cut-off point for couples with a home will be reduced to $823,000 ($1.023 million for non-homeowners). Howard’s, well-made change, halved the taper rate at which the part pension is reduced, from $3 to $1.50 per fortnight for every $1000 in assets owned above a prescribed threshold.
Pensioner couples with more than $452,000 in assets (if they own their home) and those with more than $699,000 in assets (if they don’t) will be made worse off. Apparently the blow is to be softened. Those at the lower end will get a little more money. This does not save the strategy.
Let’s be clear, there is no room at all to move for any of those on part pensions; particularly when interest rates are so low on the interest-bearing assets held by pensioners. Some people (conservatives notably among them), might say, well, let them sell down their assets. The answer to that is that undoubtedly many are already running down their capital, rather than live on hard tack. Some pensioners might also be concerned about their capital running out if they were to live for a long time, rather than doing the decent thing by dying early.
When the budget is in deficit, and debt is building, a government has no spare money to spend on anything new. But, if it is reckless enough to throw yet more borrowed money around it should not mitigate that extravagance by taking money from pensioners; in this case, from those who’ve saved enough during their working life to save taxpayers money by ‘requiring’ only a part pension.
Leave the morality aside; it is political poison. Watch for the examples of hardship to come out after the budget and take the air, yet again, from the government’s post-budget sails.
Fortunately for the government, the cross-benchers stymied Hockey’s first pathetic attempt to perniciously impoverish pensioners through the device of replacing the current indexation arrangements. You might also recall Morrison’s mooted compromise of having three-yearly reviews by some independent panel? You don’t? Well, that’s because it was consigned tout de suite to the dustbin of silly ideas.
The cross-benchers, even the Greens (be afraid), have made soundings that they might not be so kind this time around; they might support the government. I doubt it , actually, when it eventually comes to the point. But, even if the enabling legislation fails to pass, the government will be stuck with its smelly carcass. Maybe you can get away once with trying to screw pensioners. Twice is a triumph of political hopelessness over painful experience.
At what point is someone able to stand on their own two feet? At what point is there enough money for someone to live on? An interesting question. But if I had 1.1 Million in investments I might like to feel I would have a go at living by my own means. I know at today’s incredibly low interest rates it is tough but even if you have this money in super you are obliged to draw down some capital each year plus earnings. The problem with the whole system is that we all live too bloody long and there is a tsunami of baby Boomers all coming thru all with their hands out. Any responsible Govt. ignores the disastrous fiscal implications of this demographic fact at their and our children’s long term peril.
Peter,
I don’t have the time or the capability to be across every issue, so I focus on just the four I consider most important. In each case my conservative liberal views and those of the Liberal Royalty either do not coincide, or are actually in opposition. As I have not moved my conservative views very far in 30+ years I must conclude that it is the Liberal Party that has defected from the conservatism espoused by Robert Menzies.
As a result, being a ‘Liberal Party Member’ has long since ceased to have any pride attached to it. Continuing to renew my membership for the past few years has been a matter of habit rather than a statement of support. It also contained an irrational belief in miracles plus a realisation that the major alternative parties were all too horrible to contemplate. Unfortunately, life is too short to continue a relationship that has no pleasure associated with it.
Curiously, there has arisen in the last Liberal debacle in the 2014 Victorian election a phenomenon that signals a spark of hope: the third largest primary vote of 22.4% went to a whole range of micro parties – and some candidates were elected. There is no disgrace in losing an election, unless it is one that was deemed unlosable, such as Victoria 2014.
Had I been invited to fight the certain losing Battle of the Alamo, I probably would have done so. It seemed a Noble Cause and it was the right thing to do. There is no such comparison in supporting the Liberals as they too march to certain defeat in the unlosable federal election of 2016. Too many on ‘our’ side are not actually conservatives, but actually harbour more sympathy for the policies of their opposition than they do for Menzies. Would I have followed the drunken autocrat, ‘Bonnie’ Prince Charles into a losing battle at Culloden at the cost of my life just to put him on a throne he was not fit for? I think not. Would I equally blindly support the Liberal Royalty when they have betrayed Liberalism and their policies make defeat a certainty? I think not.
I have therefore sent a letter to the Liberal Party ending my 30+ year membership.
Now to seek a truly conservative party that looks like UKIP!
I understand that the family home is exempt from the assets test. That means those sitting on properties of $M2 or more are not to be touched and can continue with their pensions. Their children will reap the benefits and the taxpayer will continue to cop the bill. It is obscene.
And it’s always SELF-FUNDED RETIREES who are hit. What about defined benefits annuities to public servants – teachers, police and the like – which is perversely generous. To have saved enough money to earn the kind of incomes in retirement these people do ordinary self-funded retirees would need $2.5M or more and yet a lesser figure is being touted as being the next thing to be taxed for self-funded retirees. The taxpayer foots the bill for the defined benefits group and these pension are indexed to inflation and wage increases; i.e. guaranteed to go up. Unless and until a “deeming rate’ is applied to those defined benefits for the purpose of taxation it is a clear case of discrimination against the self-funded sector who will be expected to pay tax. This group who saved everything they earned to fund their own retirements, without recourse to the state (as I do). Well, you can forget ‘fairness’ or ‘unfairness’. These terms carry no legal weight; only the term “discrimination” does and I think this provides a hint of the general direction open to the self-funded superannuants in question.
The sharemarket hit the skids again yesterday. Those self-funded retirees who are going to provide the pot o’ gold for the government in terms of tax revenue won’t be too flush after yesterday if their portfolios will be assessed in terms of value and tax liability (if the discussion about tax on the value of SMSF’s is introduced). Meanwhile, a defined benefits recipient won’t have the slightest worry about market fluctuations as his/her pension will continue apace, ongoing income increases included, at the taxpayers’ expense. It’s the most perversely generous scheme in this country and entirely excluded form any discussions currently being had about tax liability for “rich” SMSF’s. Somebody has GOT to be kidding!!