Tuesday, March 06, 2012

NewStart. Swan takes the point, but says the surplus matters more

Australia Institute
Hallelujah. It's a start.

Pensioners can look forward to an extra $6.70 per fortnight when payments are adjusted this month; unemployed Australians just $2.90.

Treasurer Wayne Swan yesterday ruled out any immediate attempt to address the disparity between the pension and NewStart which is widening with each half-yearly adjustment.

Once close to the pension, NewStart is now only two thirds of it and is on track to amount to less than half of it by 2040.

The pension is indexed to male wages, typically climbing 4.5 per cent per year. NewStart and student and sole partent allowances increase with the lower consumer price index, typically by 2.5 per cent per year.

Speaking to the National Press Club Mr Swan acknowledged there was “a case about the gap that has opened up,” but said: “How we can deal with that in the longer term is a difficult one given that the fiscal pressures and so on the government is facing”.

Council of Social Service chief Cassandra Goldie said NewStart was now so low at $35 per day, it was hard for people on it to present themselves for jobs.

“There is a growing consensus ranging from business organisations, economists, the union movement, to the broad community and social services sector that the current rate is simply not enough and is hindering their efforts to find paid work,” she said.

Asked whether the disparity would worsen for another ten years Mr Swan said he wouldn’t make predictions and that his priority was getting people into jobs...

He offered no hope to veterans also wanting their military superannuation pensions indexed by male wages rather than the CPI.

“We said we would have an inquiry in 2007 and we did have an inquiry into indexation and that inquiry knocked it back,” he said.

“I say this as the son of a war veteran, who when he died was a totally and permanently incapacitated pensioner. For me this is deeply emotional and the point is our military superannuation, as it is with the public sector superannuation, compared to other schemes around the country, is very - much more generous.”

Opposition leader Tony Abbott promised to boost military pensions if he took office. Mr Swan said the Coalition was not in a position to deliver, needing to fill a $70 billion budget black hole if it took office.

In today's Age

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