Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Last night’s budget provides Australian pensioners with increases as part of the Australian government’s secure and sustainable pension reforms. All 3.3 million age pensioners and disability pensioners, carers, spouse pensioners and veteran income support recipients will benefit from increases in their pension payments. From 20 September 2009, the secure and sustainable pension reforms deliver increases of $32.49 per week for single pensioners on the full rate and $10.14 per week combined for pensioner couples on the full rate. From 20 September 2009, total assistance for single pensioners will increase from $304.19 per week to $336.68 per week and for pensioner couples combined from $497.36 per week to $507.50 per week. This increase brings the single rate of the pension up to two-thirds of the combined couple rate.

The reforms are focused on addressing the particular inadequacy of the single pension, as highlighted by the Harmer review of pensions. Single pensioners who currently receive a part-pension will benefit from an increase of between $10.14 and $32.49 depending on their level of private income. Around 75 per cent of single pensioners will receive the full increase. All current pensioner couples will receive $10.14 per week combined. The base rate of the pension will continue to benefit from benchmarking to wages. The benchmarked rate will increase for singles from 25 per cent to 27.7 per cent of male total average weekly earnings, an increase of more than 10 per cent. The new benchmark will be enshrined in legislation. Annually, this represents a total increase in permanent payments of $1,689 for singles and $527 for couples combined.

Labor recognise that pensioners are the best judge of managing their own budgets, so we are merging four payments into one by introducing the simplified pension supplement to replace separate allowances for GST, utilities, telephone and internet, and pharmaceuticals. The new pension supplement will initially be paid fortnightly, and from 1 July 2010 pensioners will be able to choose to receive around half of the new supplement on a quarterly basis. This is great news for older Australians. In the current economic climate, it is hard for those receiving the aged pension to make ends meet. In December last year the Rudd government made lump sum payments of $1,400 to each single pensioner and $2,100 to each couple—a down payment on the pension reform we committed to in this year’s budget. Statistics indicate around 17,000 central Victorians will benefit from the increased payments and some $15 million will be injected into the local economy. So not only are these pension increases most beneficial for all pension recipients but they will also provide a $15 million boost to central Victoria’s economy because most pension recipients are forced to dispose of all of their income each fortnight for their everyday needs.

In February, coalition spokesman the member for Warringah turned his back on older Australians, saying that increasing the aged pension would cause an enormous hit on government revenue. This is the classic coalition attitude, clearly showing all of the compassion of the Third Reich. This is one of this nation’s most disadvantaged groups, and the coalition are more concerned about perceptions of maintaining their fiscal bottom line than looking after the people who helped to build this nation to what it is today. The aged pension increase announced last night is yet another step Labor has taken to reduce the impact of the global economic crisis on pensioners’ budgets. It has taken the Rudd government just 15 months into its first term to provide some social justice for our pension recipients after 12 years of neglect by the Howard government.

The Rudd government’s other initiatives in order to help older Australians are: reviewing the value of investments following the recent dramatic falls on the share markets; twice lowering the deeming rate to take account of lower investment yields; and bonuses of up to $900 for self-funded retirees who paid tax on their investment income in 2007-08. The two-thirds ratio between singles and couples will apply across both the base pension and the new pension supplement. Mr Speaker, what are you laughing at? These reforms give pensioners more financial security and flexibility in how they receive their payments. The reforms will simplify the complex maze of pensioner payments and make the system fairer and sustainable into the future.

To provide a strong safety net for those who rely on the pension to survive, the government has also taken necessary decisions to make sure these reforms are affordable. Through a series of tough decisions, and despite the ageing of the population, secure and sustainable pension reform will be fully offset by the year 2020-21.These are the most significant reforms to the pension since it was introduced 100 years ago and a vital investment in preparing Australia for the future. I commend these initiatives to the House.