Budget cheats Australia's aged
by Peter Mac Prime Minister Howard bit off more than he could chew on a pre-election walk through a busy shopping centre recently. Confronted with a very large, very irritated and very determined pensioner, he could offer no explanation as to why the $1000 promised to the aged to compensate for the GST was being reduced to $300. Australia's aged have had plenty to complain about during the Howard Government's period in office. The biggest issue was surely the introduction of the GST itself, as a result of which pensioners are now paying tax on many goods and services where they previously paid none. Pensioner groups, who have demanded an annual bonus to compensate them adequately and permanently for the savage cuts to their income by the GST are irate at the failure of the budget to address this issue. The government's "hard sell" regarding pensions and the GST was not assisted last week, when Treasurer Peter Costello inadvertedly drew attention to the miserly status of the government's $300 pensioner vote- buying attempt, by repeatedly referring to it as "per annum", whereas it is actually a "one-off" payment. It is, of course, an election year, and the government has offered a few "carrots" to the electorate, particularly to older voters. However, closer scrutiny reveals these to be very scrawny indeed. For example, the budget extends access to the benefits of the Seniors" Card, but the estimated 50,000 who will benefit comprise a tiny proportion of Australia's older citizens. The "tax-free" income threshold for aged pensions has been raised to $20,000 per annum, but almost half of this increase was already due to come into effect this month as a result of existing pension arrangements. Moreover, the single aged pension is only $10,452, and pensioners can only earn another $2,756 before they begin to lose part of their pension. So for the majority of pensioners who have a combined income of less than $20,000, raising the threshold to this level will be a hollow gesture of little or no benefit whatsoever. The budget reverses the government's previous policy of including superannuation assets when assessing eligibility for welfare payments for those aged between 55 and 60. However, the policy represented a gross injustice when introduced in 1997, since it effectively barred those who could not yet access their superannuation from receiving welfare, leaving them with little or no other means of support. It also forced others to eat into their "super" nest egg, on which they were reliant for interest. Its removal, therefore, can hardly be described as an act of great generosity on the part of the government. The budget includes provisions for the unemployed (including older workers) to earn up to $1000 before losing their entitlement to welfare support. However, this will actually save the government money. The previous policy was blindly focused on minimising the period in which people had access to unemployment payments. This resulted in income gaps for those starting work, and therefore actually discouraged some people from applying for employment, particularly those seeking temporary or part-time work. Again, this budget "initiative" actually represents rectification of a stupid and counter-productive policy, rather than arising from any real concern about the plight of the unemployed. This initiative, and the small taxation rebates for pensioners, are blatant examples of increasingly desperate attempts to woo older voters prior to the federal election. The Budget has some other nasty little messages for older citizens, buried in the fine print. For example, it includes funding provisions for the retraining of people over 50, but makes the payment of welfare support to these people conditional on carrying out community work or undergoing training, even though they have the least chance of getting work of any age group in the community. The budget focuses on existing programs, but contains no real innovations in areas of greatest need for the elderly. The former program of free basic dental care, for example, has not been reinstated. The implications of the budget for the elderly were crisply summed up by Greens leader, Senator Bob Brown, who commented: "It's a fistful of dollars budget which sets the scene for a winter election. The money being given on one hand is being taken away with the other."