Communist Party of Australia

Age pensioners and carers got a modest increase in payments from the federal government in last week’s budget. So did those on veterans’ and war widows’ pensions. The changes lift pensions for single people by $32.49 and couples by $10.14. Weekly income from the government will now sit at $336.68 and $507.50 respectively – hovering close to the poverty line and a long way short of levels that would enable a comfortable retirement. The bombshell announced alongside the increases was the plan to raise the retirement age in Australia from the current age 65 to 67 between 2017 and 2023. Howard’s “work until you drop” vision is alive and well.

Longer life expectancies and the global financial crisis are claimed to be behind the move:

“Australia, like most developed countries, is facing challenges of an ageing population. Increasing the pension is a substantial cost to the budget bottom line that will only increase as our population ages,” Family and Community Services Minister Jenny Macklin said.

The proceeds of the staggering increases in productivity that have taken place in Australia since the age pension was introduced in 1909 are not going to be spent on retired workers. In many other OECD countries the retirement age has been lifted and workers obliged to “self-fund” their retirement through superannuation. Ultimately, government age pensions will only be available to the poorest as a very bleak last resort. This trend predates the global financial crisis and is part of the broader neo-liberal agenda of offloading the social obligations of the state onto individuals.

The idea is to force workers to stay on the job longer in order to accumulate superannuation and have fewer years of life remaining in which to spend it. The retirement age for Australian women has already been raised from 60 to 63.5 and was set to be increased gradually to 65 by 2014. It will now keep going to reach 67 by 2023.

Australia’s Future Tax System Panel also convinced the government to raise the age at which workers can access their superannuation. At present this is set at 55. Many older workers, especially those struggling to find a job in the tight employment market, retire and live off their modest super savings. Typically, these would have been salted away since contributions became compulsory in 1992 in the Keating era. They use these savings as a stopgap until they are old enough to draw the age pension. The budget will see this age limit raised to 60 by 2024 and the Panel recommends that this is eventually lifted to the new retirement of 67.

There are problems and unanswered questions associated with this strategy for retiring workers. Superannuation funds are exposed to the volatility of share markets and other forms of speculation. What happens if there are more bad years than good ones during a person’s working life? What chance will there be for a sacked 65-year-old worker to walk into another job when much younger people already find it a challenge?

The Budget has not been good to pensioners. It has sought to quieten down an increasingly strong demand for change in the community and a very effective campaign by pensioner groups. The increase in payments will be eroded significantly by other factors like possible cuts in rent assistance and increased housing commission rents calculated on the new pension levels. The increase in the pensionable age is a disgrace. It is said countries can be judged on how they treat their older citizens. Governments can, too. The campaign for justice for pensioners must go on.

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