Communist Party of Australia  


The Guardian

Current Issue

PDF Archive

Web Archive

Pete's Corner


Press Fund


About Us

Why you should ...

CPA introduction

Contact Us

facebook, twitter

Major Issues





Climate Change



What's On






Books, T-shirts, CDs/DVDs, Badges, Misc


Issue #1809      February 7, 2018


Support for the elderly dumped;corporate welfare, military spending soar

When the former Abbott government introduced its 2014 horror budget, federal Treasurer Joe Hockey proclaimed: “The age of entitlement is over!” Smug and triumphant, Hockey and Finance Minister Mathias Cormann were subsequently photographed together smoking large cigars.

However, alarmed by public rage over the budget’s ruthless cuts to welfare and other entitlements, Malcolm Turnbull subsequently ousted Abbott from the leadership. Hockey was made ambassador to the US; Abbott remained, sullen, sulking and scheming on the backbench.

But Turnbull didn’t reject Abbott’s objectives. Last year his government severely restricted the age pension asset test which, together with the income test, determines whether an applicant is entitled to a full or part pension or any pension at all.

Pension entitlements are already stringent. The maximum pension for a single homeowner is now only $447.20 per week and $674.20 per week for a homeowner couple. The poverty line is $426.30 per week per single adult.

Many people depend on the lower utility charges and discounts on pharmaceuticals, hospital stays and specialist treatment that accompany a pension. But pensions were being reduced by a taper rate of $1.50 per fortnight for every $1,000 in assets above the threshold. This was changed to $3 on January 1, 2017. The government also increased the thresholds for the assets test and eligibility for allowances.

A pensioner’s own home isn’t classified as an asset. But home furniture is, even though it’s a necessity, and so is a car, despite being a necessity for many people. The government classes a holiday cottage as an asset because it could be rented out to provide an income – but if it’s rented out, the pension will be reduced if the homeowner’s total income then exceeds the income test limit.

The number of people receiving a pension normally rises each year. However, in the first six months after the government changed the pension rules last year, the number of people receiving full or part aged pensions actually fell. Hundreds of thousands of people who had been receiving full aged pension payments had their entitlements reduced, and approximately 86,600 who had been receiving part payments lost their pensions altogether.

The introduction of national aged pensions in 1909 implicitly acknowledged the contribution that elder citizens had made to national development, as well as their right to humane financial support by a grateful nation in their later years.

But the two major parties have dumped those principles.

Pension indexation is now based only on the consumer price index, with no allowance for any rise in population income levels.

Labor disgraced itself several years ago by announcing it intended to raise the pension age for both men and women to 67 years. Delighted, the Coalition immediately declared it would raise the pension age to 70 years.

They argued that people now live longer, so people had to work extra years in order to avert a national “economic catastrophe”.

But over time, productivity increases far more rapidly than the population’s lifespan, and budget allocations necessary to pay pensions at age 65 for men or 60 for women could easily be provided from the bloated budget allocations for aggressive war preparations and corporate welfare, including the planned reduction in company tax.

And the idea that older people have the right to enjoy more years in retirement if they live longer doesn’t seem to have crossed the minds of either of the major parties.

In reality, if the pension age is raised, unemployed “seniors” will be forced to seek financial help from the government’s threadbare welfare payments, which are much lower than current pension rates.

That’s very bad news for our elders, but excellent news for the Coalition. They believe that pensions and welfare payments are just a drain on the national budget, and that the current and planned restrictions on those payments will assist the government to achieve its objectives, i.e. boosting big business profit levels and military expenditure and the holy grail, a budget surplus.

It’s not surprising that pensioners are saying: “A plague on both your houses!”

Next article – Warning over threat to kids

Back to index page

Go to What's On Go to Shop at CPA Go to Australian Marxist Review Go to Join the CPA Go to Subscribe to the Guardian Go to the CPA Maritime Branch website Go to the Resources section of our web site Go to the PDF of the Hot Earth booklet go to the World Federation of Trade Unions web site go to the Solidnet  web site Go to Find out more about the CPA