Cuts to the pension will hurt in Shortland

Nov 23, 2016

On 1 January 2017 the Turnbull government’s cuts to the pension assets test will kick in. These will cut the age pension for 330,000 elderly Australians. Nearly 3,000 pensioners in Shortland will have their pension cut or cancelled. The average reduction in income is nearly $4,000 per annum and, since over a quarter of the residents in Shortland are over the age of 60, this will have a profound impact in my electorate. It is another example of this government’s appalling attack on pensioners in our community. Pensioners who have done the right thing throughout their lives, pensioners who have made a great contribution to our community, are under relentless attack from this government, which does not care about them.

Independent analysis shows that these new cuts will affect half of all new retirees within 10 years. More than a million retirees will be affected by these cuts, including 700,000 people who will retire in the next decade. Any pensioner home owner couple with more than $375,000 in assets will have their part pension cut, and any single home owner pensioner with more than $250,000 in assets will have their part pension cut. Currently, for every $1,000 of assets that you own over the assets-free area your pension is reduced by $1.50 per fortnight. From 1 January next year it will be $3. So the most profound impact of this change to the assets test will not be on pensioners at the top end with regard to assets. It will be on those in the middle: pensioners who might have somewhere between $300,000 and $500,000 worth of assets, which is not an unreasonable amount if they have, say, sold up in Sydney and retired to my region to enjoy the much better quality of life. They will be profoundly impacted by these changes.

I am proud that Labor and I voted against the Liberal government’s changes to the pension assets test. We opposed it in parliament. Unfortunately, the Greens and Liberals did, yet again, another dirty deal to cut the pension. There will be another impact on 190,000 pensioners if the Prime Minister gets his way and limits overseas travel for Australian pensioners.

Another issue is the failure of this government to update deeming rates in line with falling interest rates. The government has failed to adjust the deeming rates for more than 18 months despite the official interest rate falling from 2¼ per cent to 1½ per cent. This is another pension cut by stealth.

I am proud to be part of the Labor Party, which introduced the pension and gave pensioners the greatest rise ever. Those on the other side, the Liberal-National government, are only concerned with cutting the pension while at the same time giving a $48 billion tax cut to their corporate mates. Yet again it demonstrates the skewed priorities of those on the other side: cutting pensions while giving a tax cut to the richest people in our community. I say: shame on Mr Turnbull and his government!

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