IF YOU NEED MONEY (and you are in Government)

If you need money, rob a pensioner or a young person. This has been the philosophy of the Liberal Party in government since it came to power. They have callously imposed all budget cuts on old and young Australians. Disappointingly, they have been supported in some measure by Labor and the Greens.

The rise in course fees and the imposition of a four week wait for support on young people who become unemployed have still to pass the Senate but the severe cuts to the income of pensioners have been enacted due to support from the Greens. Now Labor has thrown their lot in with the others.

These will affect people who have retired on small to average incomes. But here’s the thing it will affect everyone; people about to retire and ultimately everybody.

As it is Australia is no country for old men, or women. The 2014 Global Health Watch measures of the quality of life of older people, found Australia had the lowest ranking in the region, (61st), for income security which measures older people’s access to money. It had the highest old age poverty rate (35.5 per cent), and below average pension coverage and welfare rates. Afghanistan, which ranks last in overall wellbeing, was around 20 points ahead of Australia in income security.

With the forthcoming cuts the quality of life of older Australians will decline much further.

From an article by Inga Ting in the Sydney Morning Herald, September 10, 2015: ‘The Global AgeWatch Index 2015, compiled by HelpAge International, ranks countries according to the social and economic well-being of people over 60 by looking at 13 indicators in four domains: income security, health status, capability and enabling environment.

Australia ranks 94th, ahead of only South Korea and Venezuela, for the worst rate of old-age poverty and 94th again for relative welfare, which compares the standards of living of older and younger people in the community. Only China and South Korea fared worse on relative welfare.’

Overall Australia ranks just above Sri Lanka.

With the forthcoming cuts the quality of life of older Australians will decline much further. Some of the cuts legislated are listed as follows:-

The cuts legislated will take effect as follows:-

2016: Many people on small Defined Benefit State Pensions e.g. nurses, police, teachers, transport workers, public servants, firemen and paramedics can lose up to $10,000 dollars a year depending on the value of their pensions.

 Seniors with low incomes who receive the Seniors Supplement, designed to partly compensate for the impact of the GST, will lose this supplement. Any increase in the GST, will hit them hard.

These changes were supported by the Labor Party.

Chris Bowen has said his party can live with the changes they supported (Q&A 7/9/2015). He will not be living with them. The people living with them are older sick and dying people who are facing serious reductions to their income.

How will these cuts affect retirees?

2017: - Retirees whose only income comes from small lump sums, over $188,000 per person or $250,000 per couple, which at present all time low rates of return yield approx. $5640/$6000 pa., will also lose thousands of dollars a year. This is due to the doubling of the taper rate from $1.50 to $3.00, taking it back to where it was 10 years ago. In addition Deeming Rates are set higher than the official cash rate.

An example of the effect of these rules would be that a couple with combined assets of $550,000 ($275,000 per person) will lose close to $15,000p.a.

These changes were supported by the Greens and a number of Independent Senators.

In addition to the above, there are cuts that particularly affect the sick and frail aged including: -

  • Removal of the rental exemption on the former home for aged care residents.
  • Means tested contribution applied to Self-Funded Retirees for Aged Care Accommodation
  • Means tested contribution applied to Self-Funded Retirees for Residential Aged Care
  • Tighter Commonwealth Seniors Health Card eligibility criteria
  • Reduction in Medical Insurance Rebates
  • Increased costs for Home Support Services

 Overall the cuts will leave some self-funded retirees with lower incomes than full pensioners. The notion of equity espoused here seems to be that no retiree should be above the poverty line.

Much is made of the increasing number of retirees but the reality is that more people than ever have retirement savings and only require part pensions. Thus the cost to the government is less than they should have anticipated. And it’s not as though people suddenly got old. It’s not as though they didn’t know. Hawke, Keating, Howard, Costello, Turnbull all belong to that demographic category.

The government, in selling the pension changes, also assumes rates of return on assets well above those used by other agencies and points to the gain in the share market index of 12.7 per cent in the past year without acknowledging that if a person had retired and taken a defined benefit payout in or around 2007 when the market was 6800 points and then lost a big percentage of their payout, when it crashed to 3,400, they would still not have recovered that money. That is nearly ten years with no income at all from the share market.

Those gains of last year have been totally erased this year. It’s no use averaging it over 100 years either and telling people how well off they are. Only in Joe Hockey’s parallel world will people live to be 150 years old.

But naturally the government cherry-picked the most suitable figures for their propaganda like a gambler choosing which horses to back after the race has been run.

How will these cuts affect retirees?

  • Many people who need to enter nursing homes will not be able to afford the contribution required because of new means testing.
  • In the future people’s assets will be so depleted that they will not be able to afford Aged Care. Some people are now declining medical care in the hope of dying quickly.
  • The cuts to income and the reduction in the Medical Rebates will force many retirees to drop Private Health Insurance.
  • They may also cut Home and Contents Insurance and Comprehensive Car Insurance, if they still own a car.
  • Replacing a car will be out of the question, or indeed a stove or a fridge.
  • Ultimately they will have to cut back on food, medical and dental care and electricity.

In contrast to this Australia’s politicians have the highest salaries in the world. In US dollars, the Prime Minister’s salary of $403,712 ($542,384 plus very generous expenses) exceeds that of the US President ($400,000); and Prime Ministers of Germany ($234,400) and UK ($214000) and all other democracies. These incomes are supplemented by extremely generous entitlements.

How did this unprecedented attack on Australia’s aged population get implemented?

A propaganda war of hate speech, you could say a Jihad against retirees, was waged for months in the lead up to the Budget. People with small retirement incomes were represented as millionaires receiving welfare, something that was totally untrue. This was initiated by the government and gave licence to a range of commentators to launch a sustained attack on older Australians. It was a contest to see who could most effectively dishonour the elderly.

Scott Morrison is hailed as a genius for convincing Labor and the Greens to show their Economic Management skills by voting to cut thousands of dollars a year from people with low incomes. Not having gone far enough after the measures were passed he suggested that charities should be involved in providing for pensioners. Perhaps he has a scheme for workhouses to complement the charities. Mr Morrison has stated that the pension is a safety net. His views don’t stretch to his salary and expenses, which are also paid by the taxpayer, as a ‘super safety net’ even though they will keep him in luxury for the rest of his days.

Morison’s reward for effectively bashing up the elderly – Treasurer of Australia.

What can you do?

The targeting and denigration of older and young Australians that has occurred is totally unacceptable.

Whether or not you are affected by these cuts we ask you to let the Prime Minister and Leaders of the Opposition and Greens know that you consider them unacceptable and as a result you cannot support them in the next election. If your local MP is from a party that supported these changes let it be known that he/she will not get your vote. Contacts at www.aph.gov.auSenators and MembersSearch For your local member.

Our life expectancy has increased from ten years to twenty years in retirement…

No, unfortunately, our life expectancy has not increased, except statistically – our average life-span in a graph does make it look like eventually we will all live forever...

However, most of the gains in average life span are due to the reduction in infant mortality and those people live normal lives and pay their taxes. They don’t just arrive at pension age to be a burden on society in general and a particular burden on the treasurer.

Using these figures is similar to taking a set of twins and saying that statistically if one twin died at birth and the other lived to be 100 then their average age at death would be 50. That’s not telling the story of either of them. That’s what statistics are good at; not telling the story.

That’s why politicians love them. That’s what politicians are good at too; not telling the story.

John Quiggin, author of Zombie Economics had this to say on the subject: ‘It’s worth pointing out that, with pension age eligibility rising from 65/60 when the age pension was introduced around 1910 to 70/70 by 2035, men will have lost half of the extra retirement years gained from higher life expectancy and women the whole gain. The big problem we face is underemployment of prime-age workers, not the fact that we aren’t dying early enough.’

If you are affected by these cuts let them know in detail what you will have to go without.

In addition, to object to the hate speech used against retirees, contact the Age Discrimination Commissioner Susan Ryan at:infoservice@humanrights.gov.au

The only coherent analysis of these cuts, and opposition to them, came from Independent Senators. They deserve support in the next election. We need more people to hold the balance of power in Parliament who are not bound by extreme right wing Party ideology.

It is hoped people who are prepared to represent older and young Australians can stand for Parliament in the next election. You will represent up to 5 million people.

For those not yet retired saving for retirement has been made more difficult as the Government froze the super guarantee at 9.5 per cent until 2021. Gen X, wake up; don’t let your present and future standard of living get completely eroded by those who have clawed their way to power.

Qualifying age

Age Pensions age is currently 65. The qualifying age for both men and women will gradually increase to age 67 in 2023. The transition will not commence until July 2017 when the qualifying age will increase by 6 months every 2 years:

 

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