Changes to Pensions?

Media Release

Jenny Macklin MP.

Shadow Minister for families

Minister for Disability Reform

Transcript: ABC AM 

Friday, 11 April 2014

CHRIS UHLMANN: Jenny Macklin is the Shadow Minister for Families and Payments. Good morning and welcome to AM.

JENNY MACKLIN, SHADOW MINISTER FOR FAMILIES AND PAYMENTS: Good morning Chris.

UHLMANN: Well, Jenny Macklin, the Parliamentary Budget Office says spending on the aged pension increased 11 per cent a year from 2002 to 2013. Don't we need to have a conversation about the cost and sustainability of the pension?

MACKLIN: Well, let's just remember what Tony Abbott said to Australian pensioners two days before the federal election. He said that there would be no change to pensions, no cuts to pensions. So if it happens that there are cuts to pensions or changes to pensions in the upcoming budget, this will be a complete betrayal by Tony Abbott to 2.3 million Australian aged pensioners - a total betrayal.

UHLMANN: Do you think that an 11 per cent a year increase in the aged pension is sustainable?

MACKLIN: It is sustainable when you look at Australia's position compared to other developed countries. In fact we spend a lot less than other countries and have a highly targeted aged pension system with most of the benefit going to those who need it most.

Is Tony Abbott saying to single pensioners on the maximum rate that $20,000 is too much for them to live on; that they shouldn't get decent indexation to make sure that their pension keeps up with their cost of living? That seems to be what he's saying.

UHLMANN: And are you saying that an 11 per cent growth in any government program is actually sustainable? Sixty billion dollars in a decade's time - that's sustainable in your view?

MACKLIN: Well, if you look at what's happening in Australia compared to other countries, our system is much, much more affordable.

At the same time that Tony Abbott is preparing to cut the aged pension, he's also proposing to give wealthy mothers $75,000 to have a baby. I would say if he has problems with his budget, why is he going to hand out $5.5 billion in his gold-plated paid parental leave scheme?

UHLMANN: Sure, if we could just stick with the aged pension -

MACKLIN: Well this is what budgets are about -

UHLMANN: In May 2009 the Rudd government raised the pension age to 67. Should it go higher?

MACKLIN: Well, it's not even going to get to 67 until 2023 and that will still put us ahead of similar countries like Canada. So let's implement that policy change before we start thinking of another one.

What I'm more concerned about is Tony Abbott's promise to aged pensioners that there would be no change to the pensions.

If he cuts indexation, that could leave pensioners anything up to $1500 worse off. That's what Tony Abbott's changes would mean in real money to aged pensioners.

UHLMANN: Should the way that it's indexed be changed?

MACKLIN: Not in my view. That will just mean pensioners will be worse off. Labor improved the indexation of the pension to make sure that the pension keeps up with pensioners' cost of living. Now Tony Abbott wants to break his promise and reduce that indexation. That is a direct cut to the cost, to living standards of aged pensioners.

UHLMANN: Could we look at some of the costs that you built into the budget? The IMF fiscal report released just a few hours ago identified that Australia's increased healthcare and pension spending alone, based on current settings, would mean an extra $93 billion of government spending per annum by 2030. Is that sustainable?

MACKLIN: And remember who's getting this money. These are people who are elderly, who are living on around $20,000 a year. The warped priorities of Tony Abbott will see wealthy women in his budget get $75,000 to have a baby. That's where the cuts should come.

UHLMANN: Even if someone has a family home of a million dollars, should they still get pension benefits?

MACKLIN: Well, of course they're not getting a full pension anyway.

UHLMANN: They're getting some.

MACKLIN: They may be getting some but they're getting very, very little. The big cost of the pension is on those people who have low assets or in many, many cases do not own a family home. For those pensioners, life is pretty tough and yet this Government, Tony Abbott and Joe Hockey are going to cut the pension to these people. I think it is cruel and I think his priorities are totally twisted.

UHLMANN: Jenny Macklin, on another issue, the lead Senate candidate in West Australia, Joe Bullock, has been asked to stand aside by a union to make way for the number two on the ticket. Should he do that?

MACKLIN: Well, he's been elected so I'm not going to, well I assume he'll be elected, I'm not going to make any comment about that. He's been duly elected by all the proper processes and he'll join the Labor team in the Senate.

UHLMANN: Jenny Macklin, thank you.

MACKLIN: Thank you.

UHLMANN: And Jenny Macklin is of course the Shadow Minister for Families and Payments.