News Home Just In Australia World Business Sport Entertainment Weather | Opinion Blogs

Opinion Home Essays Emails Speeches Documents Contact

Still fighting for fairness on pension's centenary

By Bob Jay

Posted October 9, 2008 10:19:00
Updated October 10, 2008 09:41:00

The pension simply cannot stretch to pay for a single person's housing, food, clothing, telephone, electricity, health care and transport.

We all know by now that Don Bradman would have turned 100 years old this year. But there's another century worth celebrating - the pension.

100 years ago the Australian Federal Parliament introduced the Invalid and Old Age Pensions Act. It was hailed as landmark social reform that would forever entrench the notion of a 'fair go' in the national conscience.

So why is it that 100 years later, pensioners and senior citizens are still fighting for an increase in the pension? We recently saw that the rate of the pension in Australia lags behind that of other OECD countries. While Australia boasts a $20 billion surplus, more than one million people in Australia rely solely on an age or disability support pension. For singles, this means living on $273 per week - hardly the kind of income that gives you lifestyle options, let alone a reasonable standard of living!

Many families complain about how hard it is to live on two wages - they should try living on the pension. It is a sum that simply cannot stretch to pay for a single person's housing, food, clothing, telephone, electricity, health care and transport. It falls so far short of people's needs that it even increases pensioners' isolation because they can't afford to get out of the house very often.

So what happened to the notion of a fair go for our pensioners, for which the introduction of the Invalid and Old Age Pension was supposed to stand? For a rich nation, we have progressed so little in 100 years in giving people the livelihood security they deserve. The pension as a percentage of average wages has virtually stood still. It was 21.6 per cent of average wages in 1909 and is 25 per cent today. We cannot seriously call that progress.

Meanwhile, the cost of a reasonable standard of living is escalating. At the Combined Pensioners and Superannuants Association of NSW, we regularly speak to pensioners living in modest homes paying thousands of dollars in rates annually. Pensioners resort to staying in bed all day during winter months to save on heating costs. Pensioners who don't own their home and rent privately spend up to 80 per cent of their pension and Government Rent Assistance on rent.

But it is not only the lack of progress on the pension that is not in the spirit of a fair go. Recent decisions such as the removal of pathology rebates, and steep price hikes for water, are just a couple of examples of why pensioners feel ignored by governments.

If all this seems like a grumpy old man's rant, take heart - we haven't totally lost our sense of humour. That's why we've launched the Senior Moments Awards, which use good old fashioned humour to highlight both positive and negative developments affecting pensioners.

Our awards categories include the smartest and dumbest policy or political decision, the biggest price hike, the most notorious quote about pensioners, the worst media portrayal, and the biggest consumer rip-off - all things that have an influence on pensioners' ability to achieve a reasonable standard of living with dignity.

For example, we can only sit back and shake our heads at some of the policy ideas that have emerged recently. One handy idea is to sell your house and downgrade to supplement your income. Where does that leave the majority of pensioners who live in modest homes, or those pensioners who don't own their homes?

Another suggestion is to work until you drop. Why, we ask, would National Seniors propose to increase the pension eligibility age to 75? This, in effect, would have people in their 70s on the dole queue. Low-income earners with meagre superannuation, who could not choose to retire at age 65, would have to toil away until the very end.

Let us know some of the worst things that have happened to you. On the other hand, we'd also like to hear about good things - about people or policy that have made a positive difference.

It is more than high time for the Australian community to put the voice and rights of pensioners first - that would be a change, and a fine way to mark the centenary of the pension.

Bob Jay is the secretary of the Combined Pensioners and Superannuants Association of NSW. This piece was first broadcast on ABC Radio National's Perspective program on October 8, 2008.

Tags: community-and-society, welfare, government-and-politics, federal-government, social-policy, australia

Search for news

Comments (62)

Comments for this story are closed. No new comments can be added. If you would like to have your say on this issue, you can do so via the Emails section of our Opinion pages.

River:

09 Oct 2008 10:41:14am

I defiantly think that this problem stems from the cost of living outweighing most incomes, eg, fuel, food and the housing market.

Agree (0) Alert moderator
Lynne:

09 Oct 2008 11:38:43am

The era of John Howard shall be remembered over time as the era that entrenched the class system in our culture once again. During that time the rich regained their ascendancy and power demanding that wages and social services be reduced.
Over the subsequent period the gap between the rich and the poor has astronomically increased and very subtle measures of both encouraging the adulation of conspicuous wealth and promotion of bigotry and cruelty has occured to diminish dissent amongst the populace.
Unions, once the major tool of social change for the poor, have had their power to put their social voice into action banned. The general strikes of the early 20th century were the only avenue for the general population to put their foot down in regard to the excesses of the rich and powerful.
There are too few in power who care about the general population. Politics is now a career move for most of them so they design their policies to land them in the lap of some plum directorship in big business on retirement. Very few politicians have the ability to understand what is going on for the average Australian including old age pensioners as their world never has and never will come in contact with the cold hard truth of poverty. Labor, once the party of the people is a cold, hard disappointment.

Agree (2) Alert moderator
Bullfrog:

09 Oct 2008 11:41:19am

One of the often forgotten points about the pension age - when it was originally set, average life expentancy for males was 67 years. So setting a retirement age at 65 meant that, on average, the government was only paying for a couple of years of pension. Additionally, the population structure was still a pyramid (lots of young people, few old people). Australia's population strucure currently has a bulge at baby boomers bracket, with relatively few people to follow.

In part, the change in life expectancy, associated medical costs, and population structure are why it is a challenge to set an appropriate pension.

I think it will be quite interesting when the baby boomers finally retire, and the tax base rapidly shrinks (all those workers leaving the system). Then, we will see some very challenging decisions to be made.

Having set some of the background, I believe that the current pension is inadequate, and does need review. In my opinion, the pension needs to be restructured from the ground up.

Agree (0) Alert moderator
dragon:

09 Oct 2008 11:44:39am

The truth is that this story can be archived and resurrected in another 100 years and the issue would still be valid !
Welfare will never be on parity with the cost of living, it's as simple as that.
That's not to say that the pensioners should not get a raise. Sure an extra 30-40 per week is called for. I hope the Grey Army keeps fighting for their rights because sooner or later it's going to benefit all of us !

Agree (0) Alert moderator
Uncle Bill:

09 Oct 2008 11:48:56am

Think about this. Base the amount of pension you receive on the amount of tax payed during your working life, the more you have paid the higher the pension you receive.

Agree (0) Alert moderator
Patrick:

09 Oct 2008 11:55:00am

As a 64-year old, I believe I am very lucky to be living in such a rich country. By world standards, most Australians including most pensioners, are very well-off. My mother, over 90 years old, has access to excellent medical care and very good support from a wide range of government agencies. Both she and I are very fortunate.

By contrast, there are many other groups in the world (including some groups in Australia) who are not nearly so well-off. Older Australians like me should give thanks for our luck to be living in Australia, and should concentrate on considering how we can help others, including poor people in poor countries, rather than lobbying for ever more govenment benefits.

Agree (0) Alert moderator
Patrick:

09 Oct 2008 11:55:01am

As a 64-year old, I believe I am very lucky to be living in such a rich country. By world standards, most Australians including most pensioners, are very well-off. My mother, over 90 years old, has access to excellent medical care and very good support from a wide range of government agencies. Both she and I are very fortunate.

By contrast, there are many other groups in the world (including some groups in Australia) who are not nearly so well-off. Older Australians like me should give thanks for our luck to be living in Australia, and should concentrate on considering how we can help others, including poor people in poor countries, rather than lobbying for ever more govenment benefits.

Agree (0) Alert moderator
waryofitall:

09 Oct 2008 12:12:13pm

I think the govt should have to publish its budget - balance sheet every year. We should be able to see where every cent goes. IN the same way we have to submit BAS every quearter, so should the governments, local, state and federal. That way we can see where it is being wasted, and where it is being well spent.

Agree (0) Alert moderator
Ronrat:

09 Oct 2008 12:13:14pm

Uncle Bill. Shame on you. Those with low incomes and less savings have paid more proportionately of income on sales tax, petrol tax, alcohol taxes and now GST than those who are better off. And in all likelihood have little or no super and less likely to own their own home. Do not usher in a Brave New World.

Agree (1) Alert moderator
Pamela:

09 Oct 2008 2:56:46pm

As a sixth generation Australian, I have never heard of that people were promised pensions to live on wholly without having savings etc. My grandparents worked and saved and knew that you should never rely on anyone to look after you.
The pension is called an income support payment as it is just that. Of course you cannot live on the pension. It is an additional support for those who worked in years where there was no superannuation. It has never meant to be a payment that totally supports you.
Having said that, I do personally believe we should have an Aged Pension similar to that of Norway where people who have contributed to Australia for over 40 years have a reasonalbe pension. Not all pensioners have "worked or contributed to Australian" society all their lives. Imagine low-income earners waking up and trying to get into work when they know they will be probably better off getting "depression" and going on the Disability Support Pension.

Agree (0) Alert moderator
Polony:

09 Oct 2008 3:17:08pm

As a younger person who will hopefully never need the pension, I have conflicting views.

ON THE ONE HAND:

- I have difficulty understanding why older people believed the government would look after them well and consider it acceptable to not save their own money. Although they did not have the benefits of microwave cookware, they were earning incomes in times of: cheap housing as a proportion of their income, the booming 50s and 60s, free university for their kids and high tarriff protections.

- The basic economic truth that if you are unskilled labour then, unless you are born wealthy, marry wealthy, create a successful business or very lucky, you will struggle to make ends meet until you die was as true 50 years ago as it has been for several thousand years and is still true today. However, people who were poor 50 years ago had several decades to increase their skills and get a reasonable income. I know 60something CPAs who were once very poor and left school to care for family, but are now qualified and earning high incomes. If you are not severely disabled and do not choose to increase your income earning ability, it is your choice and your fault. Just because studying, working and looking after a family requires very long hours for several years, does not excuse you from your consequences of your decisions.

- As a taxpaying wage slave, I do not want to pay for the poor decisions of people a generation older than me. If their continued existence considerably increases the tax people like me pay, we can very easily take our skills to countries with much lower taxes.

- People with disabilities have the same costs of living but make a lot less noise. Increasing age pensions while ignoring disability pensions would be unfair and encourage squeaky wheels to make more noise simply because squeaking a lot works.

- In the same way that competent accountants can help people organise their affairs to not pay tax, it is also quite easy for extremely wealthy people to get the full pension. They just need to structure their affairs to create the right answers on Centrelink's private trust and private company forms. Hence, any aged pension increase would give more money to extremely wealthy people at the expense of taxpayers like me.

BUT:
- Some old people, such as those who were disabled when young, have never had the opportunity to earn more than enough to subsist or increase their income earning ability. Similarly some old people have been hit by life in ways that destroyed their savings.

- We should have some compassion because ALL human beings deserve respect.

HENCE:
A small increase in pensions such as $30 would be reasonable, but pensions should not be increased above basic subsistence levels.

Pensions should be increased annually by the inflation rate of goods purchased by those struggling to subsist.

Is this a reaso

Agree (0) Alert moderator
John C:

09 Oct 2008 3:29:32pm

The pension system will never met the needs of the people who solely rely on it. If you have no savings of your own you will find it hard. Governments always spend more than they make, the pension is income support only and as more people come to rely on it or in part rely on it, the greater the strain.

Agree (0) Alert moderator
henalf:

09 Oct 2008 3:34:28pm

Aussies always like a gamble! Rudd says wait and see as regards the OAP.I am a aged pensioner,and maybe another aged pensioner would like gamble his pension against mine on the toss of a coin.The winner gets two pensions,the loser a painless recycle. Rudd would probably agree,because it means considerable savings to the government. The odds are even. To go a step further,let three pensioners take the chance. Odd two to one,and so on up to ten gamblers,odds nine to one, and the winner gets ten pensions,and could become a capitalist. But what a saving for our miserable prime minister to contemplate.

Agree (0) Alert moderator
Tony Grant:

09 Oct 2008 3:35:30pm

Well, pensioners..... means testing and we don't have a problem with those that need a hand! We are Australia not the USA.... oh yeah, how many trillion have the "NEO-CONS" given to Wall St and all the other "bludgers"??????? For that matter all the banks and financial institutions around the world and many experts are saying..... it's no where enough $$$$$.

Lets get it "correct" and I'm no "lover" of the Labor Party but I have been assured that come March/ April 09 those in need will be "much better off" and that was from the out going National Secretary of the Federal Labor Party a former associate of mine! I believe him 100%!

Agree (0) Alert moderator
Aka:

09 Oct 2008 5:23:32pm

To add a little interest
I would like to bring attention to the discussion and thought of who is going to be the taxpayers in 20-30 years time.

One of the largest growing population of people in Australia are Indigenous , we have bigger families, earlier and I believe that the about 70% are under 20 (these figures are adjusted from about 2 years ago).

I am not yet 50 and have 5 grandchildren and more on the way :)

Gee whiz it makes good economic sense to ensure education health etc improve for Indigenous Australians as we will be quite a voting and taxpaying block in only a few short years.

The baby boomers might be relying on the support of a younger generation with whom they do not really connect to...

Agree (0) Alert moderator
Garth:

09 Oct 2008 5:35:49pm

The particular circumstances in which pensions were introduced have disappeared years ago. Pensions will never be adequate, but I certainly agree that an increase is justified, but the levels should be set on some rational basis and indexed. It is true that most pensioners these days have some other means, whether from assets, savings or superannuation benefits. This trend will continue, while many others will not claim the pension at all because of the level of their superannuation benefits. Some fairly well off superannuants today are still able to claim a small pension but this gives them access to other benefits such as medical concessions.

Notwithstanding all of this, I cannot resist the temptation to point to the most significant act of socialism the world has seen. I refer of course to the massive payments of corporate welfare, courtesy of the taxpayers, to bail out the greedy, irresponsible and unethical people who brought the world economy to its knees. And it is reported that some of these people not only get off without penalty and will continue to thrive, but will receive significant separation payments when they depart from the companies that they succeeded in ruining. Karl Marx, if he were alive today, would probably say, "I told you so". How sad it is!

Agree (1) Alert moderator
pamela:

09 Oct 2008 6:00:08pm

$273 is definitely not liveable even less so if the person must pay rent.
$202 per week is even less liveable especially when you walk out of a detention centre with not even a blanket or a saucepan. This is what single refugees got after years in detention.
If they are under 21years it is even less. Imagine a 19 year old boy from Darfur came out of Baxter and had to live eat and pay rent on $176 per week.
This is the Special Benefit- the lowest payment of all reserved for refugees on temporary protection visas(TPVs).
At least Labor are getting rid of TPV's.
We need a fairer social security system for all.

Agree (0) Alert moderator
toto:

09 Oct 2008 6:08:31pm

Oh, poor pensioners...
Pensioners should try living on a students allowance like I do, before they complain. My expenses are the same as theirs, but my government allowance is less.
I would LOVE to be receiving the same as a single pensioner.

Agree (0) Alert moderator
John Herring:

09 Oct 2008 7:27:38pm

Leave the Age Pension and Disability Support Pension at 25% of average income only make that average income the average of Federal Politicians income, which would increase the income to aged and disabled pensioners from $273 per week closer to $514 per week, a far more fairer deal for those in need.

Agree (0) Alert moderator
rfnk:

09 Oct 2008 8:42:57pm

One million pensioners at about $273 each (disregard the other costs). if this is increased by $100 each, which is probably about what's needed, then that's about $20 000 pa, or about equivalent to the current annual surplus of $20b. My arithmetic's never been very reliable but i think that's about right, isn't it? This doesn't sound very achievable or sensible but we'd all like to see pensioners receive at least a decent living wage and close to $400 per week is probably about right. So, assuming that the cost of living isn't going to fall dramatically, the solution lies in reduction of the number of pensioners so that there are fewer people needing to share the available funds. So, we need to encourage self-funded retirement because the age pension is a very large part of the pensioner group. Other measures, like refusing the pension to the underserving, are not viable because the truly undeserving are few and the audit mechanisms cost more than the benefit gained (it seems).

Back to self-funded retirement. State governments steal land tax from investors and increase the cost of housing through this same measure and all their other forms of theft related to housing and land transfers, so getting rid of state governments or, at least, stamp duties, land tax, mortgage tax etc., would help. They could also stop blackmailing their public with their withholding of land to make windfall profits rather than actually serving the public they don't realize elected them. This would make housing both more affordable for living or investment. The federal government could help by pretending, at least, to be a Labor Government and reintroducing the concept of a decent level of mandatory superannuation contributions by both employees and employers. This would have the added benefit of forcing some families to invest in their future income rather than throwing it into oversized and over-priced housing that they can't really afford. We'd all benefit from the fall in housing prices (investors included, in the long-term) that would ensue. Gee, the Labor Government could even manage super funds (shock, horror) to ensure a guaranteed return and use the funds for something actually worthwhile - like sustainable housing?

It's pointless going on about the moral imperative of a decent level of welfare etc. What we need is action that is different to what's happening now. Should this be something like that I've offered above? Probably not - I'm sure there are gaping holes in it (only thought it up as I wrote it). But the money has to come from somewhere. We pay too much tax already - more is not an option. Let's hear some actual solutions please.

Agree (0) Alert moderator
rb:

09 Oct 2008 8:57:23pm

Centrelink reviews Age Pension entitlements every two years, taking into account personal assets such as bank-savings, old furniture, clapped-out vehicles, empty plots of land, etc. Then it applies a so-called deeming process to these assets to figure out ones annual income, before the Age Pension is doled out!

As if one could use such 'assets' to purchase food or pay the utilities bills, rates, etc, etc!

Furthermore, if one is lucky enough to be entitled to a part-superannuation (after the primary wage earner passes away), then every time that part-super goes up (in line with CPI increases), then the amount of Age Pension one gets is reduced.

Therefore, the more one scrapes and saves during working years, the less likely are one's chances of getting an "Age Pension"!!

Thats an invitation to bludgers; what is the point of planning ahead, scrapping and saving while working only to be penalized financially in the twilight years?

It's not an increase in the "Age Pension" that is desperately required but a revision of the whole system used to calculate the entitlements.

The end result is that under the current scheme many simply cannot make ends meet. No wonder many elderly go without food in order to meet recurring expenditure. It is a disgrace in a country as wealthy as Australia.

The term "Age Pension" is at best an oxymoron. Under the existing regulations it should be renamed as 'Wealth Minimization Pension'.

Agree (0) Alert moderator
Lynne:

09 Oct 2008 9:24:10pm

I see an Australia bitter under a heavy taxation regime who looks where directed rather than remembering the many exposed indulgences that John Howard and similar politicians kicked off. He was the one who did exhorbitant renovations of Kirrabilli house and his royal airplane. He treated himself as a king and even though many prospered during his time many didn't and poverty and homelessness increased greatly. The statistics are there: the nineties heralded a surge in inequality with the income gap between the rich and the poor becoming immense.
Private schooling surged under John Howard because support for public education and universities were reduced. People with or without enough money felt forced to give their children a better start in life than could be offered by a beseiged public school system. Credit cards allow people to do a lot of things.
It was the Liberal party who expanded the parameters of the pension to allow those with superannuation and wealth to access the pension and pension benefits.
A lot of pensioners are from an era where superannuation wasn't common. They're from an era where women stayed home. Why don't people direct their anger at the massive wealth accumulated by those at the top. They don't even pay taxes having the ability to access tax havens.
As the wealth of the country is increasingly siphoned off to big business, people are looking for the lowest common denominator to blame. Don't think business covers their burden. There is so much damage to people's health and the environment that isn't factored in. Why do people casually now say "Cancer is on the increase" or that"We are in the midst of a cancer epidemic"?

Agree (0) Alert moderator
migrant:

09 Oct 2008 10:55:41pm

I was a professional people and had a good job before I came to australia. i though that i could find a job and had good life here. so i quit my job and came here, and years past i could not get any proper job because my english and my skills are useless here. after running out of saving i became a pensioner. i couldn't go back to where i came from because of my age. i applied hundreds of jobs, from lecture to nanny.
nobody likes to be a pensioner. i went to centrelink and was insulted by someone there accusing me loudly using abusive language because i was truly useless here.
i was a literature lecturer before and here i was looking for a nanny job. no confidence, no dignity, and feeling hopeless.
my only hope is in my child. they speak english and study hard.
however, i thank australia, very good environments for children. me, no future, but very good for my child.

Agree (0) Alert moderator
Dianthus:

09 Oct 2008 11:10:28pm

John C, the Age Pension is not an income support payment and you are expected to live on it. If it was an income support payment I would have been allowed to take part in the NEIS program which assists those who want to start a small business. As it was I was deemed ineligible and must therefore continue to rely on the Age Pension.

Cato, not everyone is wealth crazy like you, they just want sufficient to live decently. To you, I would like to say who is going to clean, nurse, undertake social work, child care or look after the aged if we all chase wealth for selfish reasons. There are some people, thank goodness who undertake occupations that contribute to the wellbeing of others not just their own self interest.

Most of the struggling pensioners are female who are divorced or widowed. They may never have been employed or they managed on minimal wages because the majority of women are underpaid or paid a great deal less than men. Most of these women were expected to be dependent on their husbands but this does not always work out in real life. Husbands have a habit of straying in middle age or dying before their wives sometimes after lengthy expensive illnesses.

Agree (0) Alert moderator
mikej:

09 Oct 2008 11:43:48pm

the pension should be for those incapable of supplying for their livelihood as they enter old age. a retirement age of 65 is certainly entering old age. i see my father and how age has not been kind. yet these young "free marketeers" are so " fend for yourself or starve". their total lack of compassion is breath-taking!
society needs to be just that- society. look it up..a group as a whole with a common interest. surely those who have pai 40 yrs of taxes deserve not to live way below the poverty line.
my mother in law is now on the single pension after her husband passed awaynowcan now no longer afford to live in her own home as the ongoing costs are simply too much. her rates are half her pension! she is hardly there, 0and how do you convince a 76 yr old to sell or rent her marital home?
the so low level of compassion and empathy here leaves me saddened.
with this current financial disaster my super/pension fund has lost thousands anbd all of not my doing. who gives these small flacid dicks the right to squander my money? i would much rather pay my taxes and receive a pension on my retirement--means tested.those who have no need receive less ,those in need receive more
but like car rego used to go to mains roads for roads and now goes to general revenuei ,i suppose our taxes go to the upkeep of the "surpluss" instead of our well being

Agree (0) Alert moderator
'thinkin':

10 Oct 2008 12:47:39am

We retirees obviously do have a problem. There is another unspoken aspect, and it is time to lift that lid. There are many superanuants who are partly self funded, who are simply rorting the system - to the detriment of those retirees who are in real trouble. There are just so many $'s. We have a similar hyena profile in the tax system - to the detriment of our poor old 'average joe'. These hyenas absorb resources unfairly, and they also provide poor image of the retiree class overall. I suspect that we are fair game for that famous quote - 'let 'em eat cake' - ominously delivered from the big end of town - the hyenas - the untouchables.

Agree (0) Alert moderator

Watch

SurfAid

SurfAid is well on its way to making Indonesia's Mentawai Islands malaria free.

Opinion

Change of tactics

Other terrorist groups will now be studying the modus operandi of the Mumbai attacks.

Feature

GPS koalas

Phone-savvy science is tracking the breeding habits of koalas.

Just In

Site Map

Sections

Media

Contribute

Feedback

This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be reproduced.

AEDT = Australian Eastern Daylight Time which is 11 hours ahead of UTC (Greenwich Mean Time)

Opinion

Still fighting for fairness on pension's centenary

Search for news

Comments (62)

River:

Lynne:

ravensclaw:

Perspective:

hugh jampton:

Somewhat Perplexed:

Greg h:

Lyn:

Norm McMullen:

Kareen Carberry:

Somewhat Perplexed:

TonyInTsv:

Bullfrog:

Az:

watcha:

hugh jampton:

Green:

dragon:

Katie:

quinny:

dragon:

Stop_the_madness:

DR:

Uncle Bill:

River:

Thinner:

Uncle Bill:

Cato:

Uncle Bill:

Evil Atheist Conspirator:

Trace:

watcha:

Flea:

Perspective:

Patrick:

Patrick:

Green:

rfnk:

waryofitall:

Ronrat:

johnno42:

Pamela:

Polony:

Tony Grant:

Steve:

rfnk:

John C:

henalf:

Tony Grant:

W Paul:

Aka:

Garth:

pamela:

toto:

John Herring:

rfnk:

rb:

Lynne:

migrant:

Dianthus:

mikej:

'thinkin':

Watch

SurfAid

Opinion

Change of tactics

Feature

GPS koalas

Top Stories

Just In

Most Popular

Site Map

Sections

Media

Subscribe

Contribute