Australian Budget 2015: What it means for ageing policy
By Emily Millane
12 May 2015
On the train tonight, looking at people in their winter layers, faces tinged grey with cold, I couldn’t help but wonder whether they would give a fig about the #Budget2015.
As the political class huddled around for Joe Hockey’s fireside story, most people are just doing their thing. Working. Feeding and clothing their kids. Trying to get by. As David Byrne sang, “same as it ever was”.
Or is it? Consider that the boom is over, baby. The treasurer said it himself in his budget speech, when he spoke about the transition from the mining investment boom to a broader economy. Wages are not going up like they have been. Housing affordability is taking a nosedive and surprise, surprise, housing stress is going up.
As the latest Intergenerational Report predictably showed, we are also living longer than ever before. On average, both men and women born in Australia today will live into their 90s.
The government has re-committed funds to the Restart program, a payment to employers of $10,000 for hiring people aged 50 years. Payments will now be available from the time the worker is employed rather than for people out of work for six months or more. The work bonus program, providing modest relief in the pension means test for people who work, will continue.
Which brings us to the subject of the pension means test. The government has delivered a tightening of the assets test for homeowners, a saving of $2.4bn over the forward estimates. This saving will mean that around 236,000 comfortable pensioners will receive a lower part-pension – and 91,300 wealthier pensioners will lose the pension entirely.
Much more than $2.4bn could have been saved by tackling superannuation tax concession; much more can be achieved by looking at the retirement income system as a whole.
The age pension will remain indexed at average weekly earnings, rather than inflation. As was clear from the Intergenerational Report, the government would have preferred to make the estimated $23bn over 10 years in savings rather than pay people a decent pension, but it had to concede that neither the community nor the Senate agreed.
To be clear, what the government has done in this budget in the area of pensions passes the fairness and sustainability tests, if you set the bar for those two criteria low.
The spends and saves do not have any kind of larger narrative about making longer lives in this very wealthy country a good thing, for more people.
There was nothing on assisting low income Australians to save more for their retirement; nothing on taxing wealthier Australians more on their superannuation; nothing on assisting those dependent on the pension and in housing stress.
Earlier this year the Government’s favoured strategist, Crosby Textor found that 94% of Australians believe the nation “needs a better plan for its long-term future”.
As it turns out, those people on the train who probably didn’t watch the Budget tonight are onto something. Same as it ever was.