One last plea for justice and compassion

As the 2009 Federal Budget approaches, the fate of millions of pensioners hangs in the balance. The plight of aged pensioners in particular has captured the attention of the nation’s media. But in fact there is a broader crisis also affecting the disabled, carers, students, sole parents and the unemployed.

This paper is one last call to the Federal Government to enact comprehensive reform in the provision of pensions.

With only a few days to go, however, the findings of the government’s Pension Review have not even been made public. Indeed, upon calling the relevant help line, I was informed that the release of the Review’s report would only be released “at the Minister’s discretion” and indeed that it may not be released at all.

Meanwhile the circumstances I considered a few months ago in the Left Focus blog are still pressing and urgent.

The ranks of the unemployed are set to swell. The ABC has reported that the unemployment rate could rise to more than 1 million, or 8.5 per cent, in 2010. If the plight of aged pensioners is already an urgent matter of public interest, so too are the straits of the unemployed.

Nevertheless, while the Newstart payment for unemployed singles is $453.30 a fortnight, the single aged pension is $569.80. That’s a difference of more than $100 per fortnight. The National Welfare Rights Network has projected that a $30 increase to the Newstart and Youth Allowances would cost $800 million.

Assuming that these payments were brought “in line” with other pensions, after these had been raised by $30 a week, the cost would be in the vicinity of $3.2 billion.

This sounds daunting - but again - such figures must be taken in the context of an economy of over $1 trillion.

Wayne Swan is avoiding being “pinned down” emphasising the need for “responsible” financial management. There have been rumours suggesting that there will be a “scaled back” payment of an additional $20 a week for aged pensioners to pay for an increase to Newstart.

The Greens, in particular, have been concerned that pensioners of all types should not be divided against each other. Regarding aged pensioners and the unemployed, Bob Brown has suggested that it is a false dichotomy that we must choose “one or the other”.

In the context of a rising cost of living, though, there is a strong case for a significant increase in the base rate for aged pensioners, disability pensioners, carers, sole parents and also the unemployed.

Students, meanwhile, should also receive additional support so they are financially able to devote their full attention to study.

The argument for an increase in the base rate of all pensions: and an easing of means tests for those on meagre incomes is strong. Critically here there also needs to be additional assistance for the most vulnerable of all.

The Combined Pensioners and Superannuants Association (CPSA) has argued for a tightly focused assistance package for the 1.5 million pensioners surviving on full rate pensions. The CPSA’s proposal covers aged, disability and carers' pensioners. Such a measure, according to CPSA, would cost about $3.2 billion: minimal in the “big picture” of the Federal Budget.

The CPSA has also suggested the needs of sole parents be seen to - and has criticised the absence of their needs from the Pension Review.

Prime Minsiter Kevin Rudd, however, is proving to have insufficient flexibility in the face of the financial crisis. Still he is insisting that taxes remain steady - not increasing as a proportion of GDP. Furthermore his suggestion that $2 billion for aged pension reform is “a truckload of money” is deceptive when that amount is considered in the context of an economy in excess of $1 trillion.

When the Greens suggested a $30 a week increase to pensions my immediate reaction was that surely such reform is insufficient to lift vulnerable Australians out of poverty, and keep pace with a cost-of-living “spiraling out of control”.

This remains the case - even if the Greens have taken a less equivocal position than Labor.

It is most important that we have formulae for calculating all pensions, which automatically adjust according to the cost-of-living; and which lift all Australians out of poverty.

The current formula for aged, disability and carers' pensions is 25 per cent of Male Average Total Weekly Earnings (MATWE). Given cost-of-living pressures, it is reasonable to suppose that this ought to be lifted to at least 30 per cent of MATWE.

It is critical that such adjustment includes the unemployed - who cannot be blamed for the world recession, and the resulting fall in employment levels.

This would lift such pensions (at the full single rate) to about $17,537 a year: a significant improvement - but still short of the CPSA’s figure of $19,399 (which they calculate as being “low income”).

The Rudd Labor Government’s pension reform agenda must begin by addressing the needs of the most vulnerable: those struggling on the full pension rate with no other source of income.

The CPSA’s proposal for an $80 a week supplement for these people should be implemented by the Rudd Labor Government if it is serious about fairness. Thereafter, the government needs to provide a fair means-testing formula that provides enough for all pensioners - that they are raised out of poverty.

To lift most pensioners out of poverty, the full single rate of $19,399 is desirable - but a formula of 30 per cent MATWE, with an immediate figure of about$17,537 would still be a significant and welcome improvement. Less than this simply does not do enough to address the cost-of-living pressures Australian pensioners face.

And as Charmaine Crowe of the CPSA has argued, further reform in other areas is also needed (for instance: abolition of the Pharmaceutical Benefits Scheme co-payment).

Pension reform has real consequences for the quality of life of millions of Australians.

Among other factors it determines whether or not these people can afford proper nutrition; enjoy heating and air-conditioning; have adequate shelter and access to water and energy; and also have access to information and communications technology others take for granted. It also influences access to transport and opportunities for social connectedness: as well as ability to deal with unexpected contingencies (for example, a broken-down car, fridge or TV).

Importantly, the formula for sole parents needs to be adjusted to accommodate the additional costs associated with raising a family.

It says something about the kind of society we live in that Bob Hawke’s statement in 1987 that “no child live in poverty” is looked upon as ludicrous.

It is within our means now, though, that the PPS (“Parenting Payment Single”) be raised according to a “basket of goods” necessary for sole parents and their children. It is within our means to provide for vulnerable sole parent families: the sole parent pension should be provided until the youngest child reaches the age of 16 not the threshold of 8-years-old introduced by the Howard government.

The domestic labour of sole parents in raising young families is just as important as labour market participation.

According to a May 2009 ACOSS (Australian Council of Social Services) factsheet, “there are about 360,000 sole parent families with around 600,000 children between them on this payment”.

The Federal Labor Government ignores this demographic at their own peril.

As the Federal Budget approaches, we cannot allow different pensioner groups to be divided against each other. With organisation and solidarity we can achieve change. Those concerned need to hold Rudd Labor accountable.

And the Opposition needs to be exposed for its hypocrisy in favouring the aged pension ahead of other pensions - for purposes of political opportunism.

The rights of the vulnerable and disadvantage must be prioritised. This includes the unemployed, the disabled, sole parents, the aged, carers, and students.

As I have written elsewhere: in a fair society “none ought to be left behind”.

Tristan Ewins, May 2009

Protecting the most vulnerable: Pension Reform Now!

As we lurch deeper into economic crisis, the unemployed face a potential backlash as they are particularly vulnerable to the ravages of poverty. Pensioners, aged and disabled are also unfairly disadvantaged and there is an urgent need for reform “across the board”. In the run-up to the next federal budget, the poor and the vulnerable - and those with the decency to stand alongside them - need to mobilise for change.

This paper considers the plight of the most economically vulnerable of our community; and demands change now in the name of kindness and justice.

Aged pensioners are already - and justifiably - mobilising for a “living income”. The Council On The Ageing (COTA) in New South Wales, has called for single aged pension payments of 35 per cent of Male Average Total Weekly Earnings (MATWE).

Theoretically, this is to be linked to a new “Cost of Living in Retirement” benchmarkwhich would translate to $750.60 a fortnight for singles, and $1125.90 a fortnight for couples. For singles, this would amount to $19,515 a year for those living purely on the pension.

Alternatively, the Combined Pensioners and Superannuants Assocation (CPSA), has made the case for a more tightly targeted regime of assistance “to be paid to around 1.5 million pensioners with little or no additional income”.

Charmaine Crowe, speaking on behalf of the organisation, has indicated that these figures refer to “age, disability support pensioners and carers”. Ms Crowe, elaborating further, argued for an extra $80 per week for those single pensioners now on $280 a week. Such a move, providing a modest income to some of the most vulnerable pensioners, according to the CPSA, would cost $3.2 billion.

These proposals must be taken seriously, and should feature prominently in public debate, so that the vulnerable may be delivered from grinding poverty.

The CPSA has defined “low income” as $19,399 a year for singles: enough for a “modest” standard of living. Furthermore, the CPSA has noted that pensioners cannot earn over about $18,200 under the current means test regime; well short of the “modest living” standard of $19,399.

To view this in the appropriate context: such figures stand in contrast to “expenditure on [concessionary] taxation of superannuation” which for the last financial year was “almost $24 billion”. Expenditure on the Age Pension in the same financial year was $22.6 billion. Many superannuation concessions, here, apply to the wealthy.

In light of the hardship suffered by so many, the call for justice, and for governments with better priorities, must go out now.

Compassion and justice for the unemployed

The plight of so many pensioners, aged and carers, must be addressed as a matter of great urgency. And yet the plight of the unemployed is also of critical importance: their financial straits being all the more dire. According to the Brotherhood of St Laurence, Newstart (Australia’s unemployment pension) is $50 less than the Aged Pension every week.

There is a deeply-ingrained sentiment among some sections of the Australian community that the unemployed are “undeserving poor”. Populist rhetoric about “dole-bludging” abounds. Importantly, though, some commentators predict unemployment will rise by an additional 300,000 by mid-2010. As this human tragedy unfolds - now more than ever - we need to counter popular disdain for the unemployed. How can appalling myths and contempt for these people stand in the face of such widespread human misery?

Our response to the crisis ought to be one of social solidarity: a repudiation of the selfish core of the neo-liberal ideology.

The pressing need for reform arises with the backdrop of increases in the cost-of-living, and the moral imperative of providing dignity and quality of life for all.

Reform of pensions - the need for a clear formula

The Greens - in negotiations with Labor - until recently looked to have secured an increase of only $30 a week for single aged pensioners.

These proposals did not come anywhere near the modest standard proposed by the CPSA. Furthermore, they seem to be considered in isolation from other vulnerable pension groups.

The Federal Government’s “Pension Review”, meanwhile, looks set to suggest an increase of $35 a week for single aged pensioners. Recently Treasurer Wayne Swan seemed likely to accept this option, reportedly confirming to The Age that there will be an increase for pensioners.

When pressed, though, Mr Swan's office said that the government had not formally committed to its response to the pension review, and that no firm figure had been “set in stone” yet for any pension groups.

But even supposing there is an increase of $35 a week for pensions “across the board”, there remains the need for a formula that builds upon and extends the previous standard of 25 per cent of Male Total Average Weekly Earnings (MATWE). Without a new formula, immediate changes in pension rates cannot deliver security and certainty for pensioners of all kinds over the long term.

Australian Greens Senator, Rachel Siewert, has made a point of condemning current rates for the unemployed. For singles, the unemployment allowance, Newstart, is only $224.65 a week; for singles with children, it is $243 a week.

Considered on a fortnightly basis, the single unemployed person’s pension is $449.30: more than $100 a fortnight less than the appallingly inadequate single pension for the aged, carers and the disabled.

Some welfare groups, meanwhile, have been reticent in arguing for more ambitious agendas. This February, the Australian Council of Social Services (ACOSS) called on the government to increase the Newstart Allowance (the dole) by $30 a week - to $255.

Among these competing claims for reform, the key to fairness ought to be discerned through ongoing enquiry into the material needs of all pensioners: such as to provide - among other things - for the following:

•  social connectedness, recreation and activity
•  personal development - e.g. through community education and other avenues;
•  access to high quality health care of choice;
•  the means to enjoy a nutritious and varied diet;
•  subsidised pharmaceuticals and free health care;
•  fair and comprehensive allowances for utilities bills;
•  transport expenses;
•  adequate housing - and where applicable - home maintenance and gardening expenses;
•  engagement through the communications and information technology of the day;
•  allowance for contingencies - eg: repairing the fridge, the computer or the TV; and
•  purchase of consumer goods which are in keeping with the accepted standards of the age.

Such standards must be considered essential for all pensioners and allowance recipients: the aged, unemployed, disabled and carers.

Pensioners should not be forced to choose only the worst quality cuts of meat; to use candles instead of electricity; to risk pneumonia because they cannot afford adequate heating; to be lost as to what to do - in the instance of a broken washing machine or fridge. Such austerity simply is not right.

And much more generous provisions should be made for students also: many whom struggle to apply themselves to their studies while working part-time; barely making ends meet. Surely students should be financially secure so as to be free to apply themselves properly to their studies. Not only is it in the interests of individual students: there is also a social benefit from - and investment in - their education.

If support is provided by the Greens, Nick Xenophon, and Family First, one possible response to the impending crisis could be a formulaic increase in the full single rate of all pensions - perhaps to 30 per cent of Male Average Total Weekly Earnings (MATWE). This would amount to $674.52 a fortnight. (an increase of just over $100 on top of the current singles rate of $562.10 a fortnight for aged pensioners). The full single pension rate, in such an instance, would be about $17,537 a year.

While such reform would still not meet the modest standard proposed by COTA and CPSA, the benefit for Newstart pensioners would be especially marked - in comparison with their current circumstances.

Here the point needs to be made - emphatically - that government should aim to eliminate unnecessary poverty and hardship. We need an honest and comprehensive enquiry as to how this may be achieved. The modest standards promoted by the CPSA, here, might comprise the desired outcome.

It is to be hoped that inclusive and comprehensive benchmarks will have been set by the government’s pension review: but there is the danger that standards will be understated for the benefit of the budget bottom line.

Perhaps the most vulnerable pensioners of all ought to be provided with the kind of tightly-targeted cash payments proposed by Charmaine Crowe of the CPSA. Here, we refer to those who are dependant upon their pensions, and without other sources of income.

Importantly in this equation, we must take into account reasonable activity tests on the part of the unemployed. And we should also consider the enormous amounts which are saved every year by the selfless efforts of carers.

These elements considered, what just argument can be made against granting these people a modest yet adequate living income? Just as critically though: the Greens, Family First and progressive voices from within the Labor government need to mobilise behind - and promote - such reform.

No one should be excluded from the struggle, or from the reform agendas of those politicians guided by compassion and justice. All those concerned should co-operate in the spirit of solidarity. “Let no one be left behind.”

by Tristan Ewins