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Tag Archives: old age pension

Scott’s new targets

In October, Labor voted to pass nearly $3 billion in budget savings with revised welfare legislation which will see Family payments cut and young people on a disability support pension will have their cases reviewed.

The laws will:

  • reduce the primary income earner limit for Family Tax Benefit B from $150,000 to $100,000
  • limit the FTB – A large family payment to those with four or more children
  • review the cases of people under 35 who are receiving a disability support pension
  • include untaxed super income in eligibility assessments for the Seniors Health Card
  • remove scholarships for students moving between major cities

The most substantial cuts will involve those families who lose entitlement to FTB Part B, worth just over $3000 per year, when their youngest child turns six and is at school, although transitional arrangements will apply until July 2017. Low income lone parents will instead get a payment of $750 dollars a year per child aged 6 to 12 years.

About $10 billion in budget measures, including increasing the pension age, reducing the rate of increases to pensions and freezing family payments, remain blocked. In a bid to woo the crossbenchers, the Government has “repackaged” those cuts and changes to a new series of bills.

The Government proposes to freeze all income-test thresholds for most benefits for three years, and FTB payment rates for two. Freezing payment rates is regressive, since lower-income families bear proportionally higher cuts.

Lone parents earning around two-thirds of the average wage lose between 5.7 to 7.1 per cent of their disposable income. A single-income couple with two school-age children and average earnings loses nearly $90 per week or 6 per cent of their disposable income.

Compare this to the $29 or less than 1 per cent of disposable income paid through the Deficit Levy by an individual on three times the average wage – close to $250,000 by 2017–18. High-income couples could together bring in up to $360,000 per year and not contribute an extra cent.

There will be no transition for unemployed people under 25, who will receive Youth Allowance rather than Newstart. People under 30 will be required to wait for up to six months before getting unemployment benefits and then Work for the Dole.

An unemployed 23-year-old loses $50 per week or 18 per cent of their disposable income. An unemployed lone parent with one 8-year-old child loses $60 per week or 12 per cent.

Senator Abetz backed down from his ridiculous idea of making unemployed people apply for 40 jobs a month which would have led to 30 million job applications a month when there’s not even a couple of hundred thousand jobs on offer.

The Government has also launched a tender process for a new $5.1 billion employment services plan and work for the dole scheme to operate for five years from July 1 next year. One wonders which private companies will benefit from this $5 billion cash splash and whether the money would not be better spent creating jobs rather than providing slave labour for the private sector who will receive generous payments to administer the scheme.

I also wonder has this government done any modelling on increasing the pension age to 70. When they increased the age for females from 60 to 65 in 1995 , women with disabilities in this age group increasingly claimed the DSP. The proportion rose from close to zero to about 13 per cent by 2013. But as the number of women receiving the DSP went up, the number receiving the age pension went down by much more.

In 1995, only about 650 women aged sixty to sixty-four received the DSP and 211,000 received the age pension. By 2012, 86,000 female DSP recipients were in that age group, but only 28,000 age pensioners. So the total number receiving one or other of these pensions has nearly halved, and now the majority receive the DSP.

Increasing the pension age to 70 will just force more people onto the DSP and increase the medical and administrative costs to receive their payment. So much for cutting red tape.

I sincerely hope Labor have the number crunchers working out exactly how much people are worse off under this government’s policies. Add in the delay to the increase in the superannuation guarantee, higher fees for university students, cuts to health and education, increased fuel excise, scrapping the increase of the tax free threshold, and every single person is worse off though inversely proportional to their income and wealth.

The Australian Council of Social Service released a new report revealing that poverty is growing in Australia with an estimated 2.5 million people or 13.9% of all people living below the internationally accepted poverty line.

The report provides the most up to date picture of poverty in the nation drawing on new data released by the Australian Bureau of Statistics Income and Expenditure surveys for 2011-12 and previous years. It finds that 603,000 or 17.7% of all children were living in poverty in Australia.

The poverty line for a single adult is $400 per week yet the maximum rate of payment for a single person on Newstart – when Rent Assistance and other supplementary payments is added – is only $303 per week. This is $97 per week below the 50% of median income poverty line.

It also emphasises the danger posed by Budget proposals to reduce the indexation of pension payments to the Consumer Price Index only, which is likely to result in higher poverty rates over time than would be the case if payments were indexed to wages and therefore community living standards.

Most at risk groups

  • Women – significantly more likely to experience poverty than men (14.7% compared to 13%);
  • Children and older people – face higher risks of poverty compared to other age groups (17.7% and 14.8% respectively);
  • Sole parents – at high risk with 33% in poverty in 2012 and 36.8% of all children in poverty were in sole parent households;
  • Born overseas – Poverty is higher amongst adults born in countries where the main language is not English (18.8%) than amongst those born overseas in an English speaking country (11.4%), or in Australia (11.6%);
  • Aboriginal and Torres Strait Islander people – ABS data does not include information to accurately measure this poverty rate, however 2011 HILDA data found 19.3% of Aboriginal and Torres Strait Islander people living in poverty, compared to 12.4% of the total Australian population;
  • People with a disability – latest available data does not allow this poverty rate to be calculated, however our previous report found 27.4% of people with a disability were living in poverty in 2009-2010 compared to 12.8% for the total population.

Abbott’s strategy to help these people is “we removed the carbon tax”. Come on Labor, let’s compare that to all the other things they have “removed”.

Morrison doesn’t see helping these people as his responsibility. He views them as his targets, the challenge he must face and subdue.

In the May budget they cut $44 million from the capital works budget for the National Partnership on Homelessness.

Three days before Christmas they axed funding to Community Housing Federation Australia, National Shelter, Homelessness Australia, disability groups and financial counselling services.

In the next budget, Scott Morrison is going to do something about making childcare more affordable. This will be a welcome move if it isn’t just about making politicians able to claim for their nannies.

poverty He will also be trying to sell Tony’s signature Paid Parental Leave Scheme or some sort of renegotiated version of it. If it is means tested, completely unavailable to those over a certain income, then it may be worthwhile though it basically defeats Tony’s stated purpose of encouraging “women of calibre” to breed. It’s interesting that this “workplace entitlement” is being promoted by the Minister for Social Security who wants the government to pay for maternity leave rather than the employer. I guess Tony is desperate to have an answer other than carbon tax about what he has done for women but let’s not let it blind us to the needs of our most disadvantaged citizens.

As this government silences advocates for the homeless, the disabled, the young and the needy, our Indigenous and refugee communities, we, the public, must raise our voices to help protect our most vulnerable and to tell the government which direction we want this country to go.

“…the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life; the sick, the needy and the handicapped. ” – Hubert H. Humphrey

Cherchez des revenus

When my husband lost his job not long after the birth of our first child, my immediate reaction was to ring my old boss and go back to work. I didn’t sit there thinking what spending I could cut – I actively pursued employment. We were already pretty frugal, living on one income, so cuts would have meant a lowering of our living standard – doable but not my first choice.

Which is why everything this government is doing in the budget seems so wrong to me.

They screamed blue murder about the burden on cost of living imposed by the carbon tax but the cuts they are making take far more away from those least able to afford it than removing the carbon tax will replace. The poor, the sick, the elderly, the unemployed, our students – all will face a substantial reduction in future disposable income.

While we increasingly hear about the lack of affordable housing, and a possible housing price bubble due to low interest rates and a burgeoning investment market sending prices soaring, both parties hasten to say they have no intention of changing the negative gearing tax concessions. Why not?

Negative gearing allows investors to deduct losses made on rental properties from their other income, thereby reducing their overall annual tax liability. The Grattan Institute says it costs the federal government $2.4 billion a year, and there is “little justification for it”.

The Reserve Bank said strong demand by investors meant investor housing loans now accounted for about 40 per cent of all home loans. It said it had become so concerned about Australia’s overheating property markets that it was openly questioning whether bank lending practices were “conservative enough”.

Once again, I find this an odd statement. If the banks’ lending becomes more conservative, the people who will miss out on loans are the first home buyers, not the investors. Why not make it less attractive to investors by removing negative gearing? They are the ones driving up the prices.

Then there is their approach to superannuation.

As Treasury revealed in the budget, the annual cost of superannuation tax concessions is set to surge in coming years, making the current cost — nearly $32 billion — look paltry as it rises to a remarkable $50 billion in 2017-18. At that point the cost of superannuation will exceed the cost of the age pension

Australia’s richest taxpayers will collect over $35.5 billion in tax concessions via the superannuation system over the next five years, and by 2017-18 they will be taking over $8 billion a year.

And far from contributing to the burden of helping repair the deficit, the top 5% of taxpayers will enjoy an increase in tax concessions above current levels of over $2.9 billion dollars by 2017. That increase by itself is almost enough to wipe out the revenue generated by the government’s temporary deficit levy on incomes over $180,000, which is forecast to yield just over $3 billion in that period.

Just curbing the growth between now and 2017-18 could deliver nearly $15 billion to the government, several times more revenue than the temporary tax levy, twice as much as the cuts to foreign aid, and many multiples of savings through punitive cuts to Newstart.

Hockey also removed the legislation to tax retirement incomes at 15% on the excess over $100,000 pa, foregoing over $3 billion in revenue.

At the other end of the scale, the people most likely to qualify for an old age pension are having their superannuation savings slashed by the delay of the superannuation guarantee increase by 7 years and the removal of the low income co-contribution.

And then we have capital gains tax concessions.

The other big costs are the capital gains tax exemption on the family home (estimated to grow to $57 billion over the three years to 2017-18) the 50 per cent discount on capital gains (which could hit $70.5 billion over the same period) and the cost of CGT discounts for individuals and trusts (estimated at $28.3 billion).

Whilst removing the CGT exemption from the family home could have deleterious impacts, a broad-based land tax (preferably in place of stamp duties) would encourage a more efficient use of the housing stock and improve labour mobility, penalise land banking and vagrancy (increasing effective land supply in the process), and help to make infrastructure investments self-funding for governments (since any land value uplift brought about through increased infrastructure investment would be partly captured by the government via increased land tax receipts).

A report released earlier this year by the International Monetary Fund (IMF) estimated that Australia has the highest tax expenditures in the OECD when measured against GDP. These include government revenues foregone as a result of differential, or preferential, treatment of specific sectors, activities, regions, or agents. They can take many forms, including allowances (deductions from the base), exemptions (exclusions from the base), rate relief (lower rates), credits (reductions in liability) and tax deferrals (postponing payments).

There is a strong case to limit superannuation concessions, which have increasingly become a mechanism for richer older people to avoid paying tax, rather than a genuine means for Australians to pay for their own retirement and avoid drawing on the Aged Pension. There are very good reasons to quarantine negative gearing losses, so that they can only be applied against income from the same asset, as well as removing the capital gains tax concession on investments (why should they be taxed at a lower rate than income?). These concessions are skewed towards the wealthy and high income earners, undermining the progressiveness of the tax system.

Mathias Cormann assures us that we have very strict tax avoidance laws.

These “strict” laws allow 75 individuals who made an average of $2.6 million each in 2011-12 to pay no tax at all – no income tax, no Medicare levy and no Medicare surcharge.

These “strict” laws allow almost a third of Australia’s largest companies to pay less than 10¢ in the dollar in corporate tax.

Ernst & Young is the auditor of Westfield Group, James Hardie and 21st Century Fox, all of which pay less than 1 per cent tax, according to the report, Who Pays for Our Common Wealth, produced by the Tax Justice Network and the union United Voice.

It is also the auditor of some of the US multinational tech companies accused of paying minimal tax in Australia, including Google, Apple, Amazon and Facebook.

Accounts show 21st Century Fox spent $US19 million on tax advice from E&Y in 2013.

The G20 assure us that they are talking about how to cut down on tax avoidance. A deal struck at the G20 summit in Cairns will see authorities in more than 40 countries sharing information — including bank balances and income — to identify companies that avoid tax.

But Australia will not begin swapping the financial details until September 2018, one year after countries including Britain, Germany, India, Ireland, The Netherlands and a handful of tax havens.

Why wait? We make our own laws, we could close the loopholes right now if we wanted to. Instead, we are slashing staff at the Australian Tax Office by so much (4,700 over the next few years) that they will not have the personnel to pursue tax cheats.

“Morale is down and 3000 of our most senior staff have recently taken redundancy package,” said one former officer. “There was also an absurd clear out of senior transfer pricing staff about two years ago, so there is very little likelihood of the ATO ‘manning-up’ on multinationals any time soon. The general impression among senior ATO officers is that we are supposed to give the big firms what they want and to usher the revenue out the door. The News decision (not to appeal the $882 rebate to Rupert) is symptomatic of that and a lot of staff were pissed we caved on that case.”

With reports that one in three elderly Australians are living in poverty, despite being among the most highly educated senior citizens in the world, that 17% of our children live in poverty, that making unemployed people under 30 wait six months for income support and raising the eligibility age for the dole to 25 could breach human rights to social services and an adequate standard of living, I would suggest that if Tony Abbott wants to spend hundreds of billions on defence and border security he starts taxing his party donors, beginning with Rupert.

Perhaps you may want to see how the French are approaching their deficit.

Il est evident. Cherchez des revenus, stupide.

 

I refuse to live in fear!

The tactic of a bully is to keep their victims living in fear of what could happen so they are grateful when they don’t get beaten or abused. They make their victim believe they are powerless by cutting them off from their support and telling them only the bully can look after them. This is exactly what our own government is doing. It is their tactic of choice in so many areas.

In the past, Australia was a country who willingly offered safe haven to refugees. We recognised their need for a home which complemented our need for population growth. As time passed, the contribution made to our society by those we embraced became obvious and we are the richer for it in so many ways. We are a wealthy multicultural society who used to lend a hand. Those days are gone.

We must spend whatever it takes, and alienate whoever we must, and inflict terrible physical and mental harm, to save the nation from the invading hordes of asylum seekers who will threaten our way of life. They will impose Sharia law, take your jobs, clog up your roads and hospitals, and are just waiting for a chance to kill you. Yes I am sure that’s why they are fleeing their homelands, leaving family and friends, risking their lives on unseaworthy vessels – just so they can come and turn Australia into what they are escaping from.

I do not fear refugees and we can easily accommodate 30,000 a year if not more. We should be welcoming them, assuring them they are safe now, and assisting them to become productive members of our society.

Climate change is real. It is not a conspiracy by bankers for world domination. It is not collusion by scientists to get funding. It is not a fake perpetrated by the IPCC. I refuse to believe the conspiracy theories though I am terrified by the consequences of our inaction. The government has inculcated fear about carbon pricing into the community – Whyalla will be wiped off the map, lamb roasts will cost $100, the cost of living will skyrocket – none of which happened. They tell us that wind farms are bad for our health and when that didn’t run, they revert to they are ugly?

We were told that the mining tax would hinder investment in Australia with investment and jobs going offshore. This scare campaign was also a lie. We have the resources and a stable economy, the investors are banging on our door. The high Aussie dollar caused by the success of the mining industry is what is hurting jobs and sending industries offshore, but Hockey hastened to reassure the miners that they will not have any of their subsidies cut or tax increased. In ‘fear’ of the miners choosing to rape another country instead, we have gotten rid of our environmental protections and given virtually open slather for the short term cash grab of developing our finite resources.

Our country is not broke. Using great big numbers about possible debt in ten years’ time and inflated deficit figures is purely designed to scare us. Why do that? Don’t you want business and consumer confidence? This scare campaign is purely political to exaggerate the problem, blame it on Labor, and use it as an excuse to implement their corporate agenda and social engineering.

People struggling on the old age and disability pensions are terrified about the recommendations from the Commission of Audit. We can reassure the miners but we cannot reassure the pensioners. They have to wait in fear so when they only have to pay $6 instead of the recommended $15 as a co-payment to the doctor they will feel grateful.

We are told that our health system is unsustainable yet the government didn’t ask the people in the industry how it could be improved. We straight away go to the scare campaign of we can’t afford this so you must pay. The experts have said there are many ways that expenditure could be better spent and areas of waste that could be eliminated but starting with preventative health is patently counter-productive.

The same applies to the old age pension. We have now scared everyone by saying they will have to work to 70 yet once again the experts disagree with the fear campaign being spread. Hockey said the number of people aged 65-84 would quadruple by 2050. The ABS says otherwise. They do three predictions – high, low, and medium – their high range estimate is 2.5 times growth in that age bracket. Hockey predicted that only 37 per cent of the population would be of working age in 2050, yet the best available estimates from the ABS show it is in fact between 61 and 63 per cent.

The scare campaign about unions is the government’s way of cutting us off from our support. What collective voice do the people have other than the unions? Who offers protection for our workplace rights other than unions? Who can represent individuals other than unions? Reducing the minimum wage or the availability of Newstart is not the best way to tackle unemployment. There are so many better ways like investing in new industries such as renewable energy, and investing in education and supporting research to develop the industries of the future – something we have been amazingly good at in the past.

George Brandis even wants to change the law to protect bigots and bullies. Apparently they have every right to offend and humiliate people. What sort of crazy backward thinking is this, done in the name of freedom? Next, will we be defending the rights of countries to commit human rights abuses? Oh, wait……

We must stand up to this government who consciously, willingly lies to its own citizens to keep them in unnecessary fear. We must point out their crazy priorities where we waste hundreds of billions on fossil fuel subsidies, tax rebates for superannuation and private health insurance, fighter jets, paid parental leave, grants to polluters, Operation Sovereign Borders, lifetime gold passes and entitlements for politicians, political advertising and campaigning and the like, while insisting that our most vulnerable must live in poverty and fear. We must expose their lies about debt, deficit, and the affordability of our health and welfare system.

You are the one who should be afraid Tony – be vewwy afwaid – because I refuse to live in fear and will do everything in my power to make sure the Australian people know the truth so we can protect ourselves from the bully by ending this relationship at the first opportunity.

Bullying-stands-for