[Greens-Media] Greens call on Howard to raise aged pension by $60 a fortnight

[Bennett, Ebony (Sen B. Brown)]

Sunday, 17 June 2007

Greens call on Howard to raise aged pension by $60 a fortnight

Greens Leader Bob Brown today called on Prime Minister John Howard and
Opposition Leader Kevin Rudd to raise the aged-pension by $60 a
fortnight.

"There hasn't been a real increase in the aged- pension since 1993. The
Greens call on Prime Minister John Howard and Opposition leader Kevin
Rudd to increase the aged-pension by $60 a fortnight," Senator Brown
said.

"Australia's 1.2 million aged pensioners live on $13,652 a year. Prime
Minister Howard makes almost $13,000 in a fortnight. Australia's 1.2
million pensioners deserve to share this nation's wealth, but after 11
budgets and numerous budget surpluses there has been no real increase in
the pension." 

The cost of increasing the aged pension from $438.50 a fortnight to $498
a fortnight is less than $3.5 billion per year - this is less than the
cost of the second round of tax cuts for those earning over $75,000 per
year, announced in last month's budget.

"The Greens were the only party to oppose these tax cuts, and would fund
the increased pensions with this revenue. John Howard and Kevin Rudd
should back this proposal to make it easier for pensioners to make ends
meet," Senator Brown said.

"Housing is more expensive than ever, dental care is hard to find and
medicines are more expensive. This government has spent billions of
dollars assisting superannuants, but seems to have forgotten those
people who rely on the aged pension. An extra $60 a fortnight is
affordable and the Prime Minister and Kevin Rudd should back the Greens
and increase the aged-pension," Senator Brown said.

Further information: Ebony Bennett 0409 164 603



 <<Picture (Metafile)>> 
   
Why pensioners deserve a pay rise


The aged pension in Australia today is $438.50 per fortnight or $13,652
per annum. To put this into perspective, Prime Minister John Howard
earns $12,945 per fortnight, or $336,570 per annum.

The last time Australian pensioners received a real (that is, above
inflation) increase in their pensions was 1993 when they received an
additional $4 per week, or $3.50 for married couples. While the recent
budget included a one-off pre-election 'bonus' of $500 the Howard
government has failed in the last eleven budgets to provide a real
increase the aged pension.

Since that time government concern with retirement income has shifted
away from the level of the aged pension and towards the provision of tax
concessions for superannuants. This shift in policy emphasis does
nothing, however, to improve the quality of life of the nearly 2 million
Australians who are already on the aged pension or whose incomes are so
low that that making additional contributions to superannuation is not
feasible.

Figure 1 shows the level and changes in the aged pension, average weekly
ordinary time earnings for males and the Prime Ministers salary between
1996 and 2006

Figure 1 - Level and changes in average weekly income for pensioners,
full time employees and the Prime Minister 1996-2006

 <<Picture (Metafile)>> 

Source: ABS 6302.0 - Average Weekly Earnings, Australia, Feb 2007,
Daniels (2007) and Manthorpe (2006)

In 1996 the Prime Minister earned $226,682 per year compared to average
weekly full time earnings for males of $36,847 and an aged pension of
$8,907. While Figure 1 makes clear that aged pensioners have had the
smallest increase in their weekly incomes in absolute terms, they have
also had the smallest increase in percentage terms. While earnings have
risen 53 per and the Prime Ministers pay has risen 48 per cent the aged
pension has only risen by 45 per cent.

In the last two Commonwealth budgets the Howard Government announced
income tax cuts cost more than $60 billion dollars. In addition, they
have systematically provided a wide range of tax incentives and
subsidies for superannuants which are of no value to those who are
already on the aged pension.

Figure 2 compares the cost of the tax cuts for those earning over
$75,000 per year announced in the 2007 budget with the cost of
increasing the aged pension by between $20 and $60 per week

Figure 2 - Relative cost of 2007 tax cuts for those earning over $75,000
per year and the cost of increasing the aged pension
 <<Picture (Metafile)>> 
Source: Modelling prepared by the Australian Parliamentary Library

The Australian Greens opposed the tax cuts for those earning over
$75,000 per year and have argued instead for any increases in government
revenue resulting from economic growth to be used to fund investment in
Australia's people and its environment. Figure 2 shows that if the
government's priorities were different, it could easily afford to
provide a significant increase in the aged pension.

The lack of concern with the level of the aged pension is remarkable
given both the large number of aged pensioners and the alleged concern
shared by the Coalition and the ALP with 'the battlers'.


References


ABS 6302.0 - Average Weekly Earnings, Australia, Feb 2007,
http://www.abs.gov.au/ausstats/abs@.nsf/e8ae5488b598839cca25682000131612
/ba84bbb55b643021ca2568a90013934e!OpenDocument

Daniels, D. 2007, Social Security Payments for the Aged, People with
Disabilities and Carers 1909 to 2004,
http://www.aph.gov.au/library/pubs/online/aged3.htm#table3

Manthorpe, L (2006) Parliamentary allowances, benefits and salaries of
office, http://www.aph.gov.au/library/INTGUIDE/pol/parlrem.htm


--------------------------------------------------------------
Ebony Bennett
Media Adviser
Office of Greens Senator Bob Brown
Mobile: 0409 164 603
Ph: (02) 6277 3170
Fax: (02) 6277 3185
ebony.bennett at aph.gov.au