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Dr Nelson looks forward to a diet of jam and baked beans…

16 Sep

I think not.

What a performance that was by Dr N in Parliament yesterday! I’m not referring to the fact that in a few hours he may no longer be Leader of the Opposition, but to his poncing around with his tin of baked beans and his jar of jam in fake sympathy for the plight of pensioners. His real aim of course was to embarrass the government and go down the populist path of seeming to be the Santa of the Senior Set.

I write this, just so you know, as a person on the Single Aged Pension myself. I don’t need Dr Nelson-Turnbull to tell me the rate is very low. I do remind Dr Nelson-Turnbull that the rate is exactly the same as it was when he/they were several Ministers in the Howard government. And that rate is, as Dr Nelson-Turnbull well knows, pegged at 25% of the average male weekly earnings, and that has been so for a very long time. All this talk about an extra thirty bucks a week is just talk. As Dr Nelson-Turnbull well knows. Only a systematic review, such as the government is undertaking, holds out any real hope, and even there I am not holding my breath.

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Dr Nelson-Turnbull

The true beliefs of Dr Nelson-Turnbull’s side of politics are transparent anyway: just look at this patronising git from the Centre for Independent Studies:

The rate of the pension is currently set at one-quarter of average weekly earnings and is indexed annually for inflation. Contrary to what has been claimed, the pension has therefore increased every year. However, the base rate has been set at – and should be kept at – the present level for sound policy reasons.

The old age pension system has never been structured to replace the earnings people forgo when they retire. It has always been designed to alleviate poverty. The government taxes people still in the workforce to provide a ‘safety net’ for those who have failed to provide for their own retirement.

The expectation, in other words, has been that people who are now retired or about to retire should have provided for themselves over the 30 to 40 year span of their working lives by purchasing a home, by accumulating assets, and by investing and saving. To reinforce this expectation, and maintain the integrity of existing government policy, it is essential to keep the pension at the current rate to discourage people from trying to shifting the cost of their retirement onto others.

That is the tune Dr Nelson-Turnbull would be singing in government. They know that. I know that.

Anyway, I find kangaroo sausages at around $3.50 for 7 bangers, the basis for three meals, are a much better bargain than baked beans…

The whole performance aspect of this just sickens me.

Politicians! Rot them!

Seriously: see The Institute of Actuaries Australia and The Australian Government Pension Review Background Paper.

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9 responses to “Dr Nelson looks forward to a diet of jam and baked beans…

  1. Thomas

    September 16, 2008 at 11:18 am

    Time to update your post.

     
  2. Bruce

    September 16, 2008 at 12:16 pm

    Time to update your post.

    Ha Ha!

    Incidentally, on the matter of the patronising “taxes people still in the workforce”, I was under the impression that way back, it was factored into taxes that a fund would be set up to pay for when people later retired. A fund that was mangled by Menzies and never repaired since.

    Importantly, the fund, while appropriated for other things, was never factored out of taxes, just forgotten about. This notion that pensioners are being paid for by current taxes is hogwash.

     
  3. Neil

    September 16, 2008 at 12:17 pm

    “Bring it on!” quoth The Nelson, or is that The Half-Nelson, and lo, they did! 🙂

     
  4. Thomas

    September 16, 2008 at 1:18 pm

    I’m with Bruce here – I thought that there was already money put aside for future pensions. In effect, that current taxes are not paying for for current pensions, rather current taxes are paying for *my* pension.

     
  5. AV

    September 16, 2008 at 4:41 pm

    Shorter CIS: Let them eat cake!

     
  6. Neil

    September 16, 2008 at 7:45 pm

    … or “Let them eat jam” perhaps …

     
  7. marcellous

    September 18, 2008 at 9:50 am

    That stuff about the National Welfare Fund is a bit of a furphy. It is true that such a fund existed, and its inputs came initially from a specific impost, but it’s still really just money paid in by tax payers and over time has been absorbed into the general taxation base, just as pensions have been paid out of that base. The fund was abolished in 1985.

    In other words, it is true that taxation rates rose in order to fund the social security state, but I don’t think you can really say that any specific present social security entitlement, either for some or for all, has been funded by the payment that any particular person has made. In particular, I’m reasonably sure that from day one the fund, even when it existed as a combined polical and accounting device, was used to meet existing pension entitlements – ie, to people who had not themselves paid into it.

    It’s a bit like the medicare levy, really.

    As to the single old age pension, I don’t know if you should be holding your breath, Neil. Even though this will seem unfair to those who have been able to and taken the trouble to own their own homes, in reforming pension rates and other entitlements, ensuring people have a roof over their head while they are alive is a more pressing call on the public purse than ensuring that people keep owning their homes until they die – except of course, that those people’s children still have a lot of votes.

    Subject to that political consideration, the most urgent area for reform across the welfare system is situation of privately renting welfare recipients.

     
  8. Neil

    September 18, 2008 at 11:50 am

    Subject to that political consideration, the most urgent area for reform across the welfare system is situation of privately renting welfare recipients.

    I am blessed in my landlord. 🙂

    Another area that needs to be considered is the absurdly small amount one is allowed to earn without affecting the pension. I have adapted my tutoring to conform, but $135.50 per fortnight really could be lifted to say $250. That could help many aged pensioners (and others) still able to participate to some extent.

     
  9. marcellous

    September 18, 2008 at 2:00 pm

    I quite agree – that is quite wretched, because really there is no regular even one or half a day a week job other than the most menial which you could regularly hold down.

    I thought about saying something about the small amount you can earn without affecting the pension but in truth my attitude to that depends on what people’s asset position is, since we are till talking about taking money from the government when you might be able to find that money elsewhere yourself. And money from the government is money just from other people.

    I take your point that the amount once can earn without affecting one’s pension is impractically small, because there are very few employers who want to employ someone for so little time in a week. But in fact there is nothing wrong with working and losing some pension – unless the expenses of working are very high, you still end up with more money if you earn more money, just not as much more money as your notional income from the work. At that point on the tax scale for a pensioner it’s not so different from the tax that full-time workers are paying, certainly at the point of their marginal rate. You (changing more decisively now from the colloquial to the specific “you”) should just charge your tutees more so you can pass on the pension reduction to them! That is, if the market will bear that for one of your expertise and experience.

    Effective marginal tax rates are much worse for welfare recipients who are not on pensions, who are also less likely to own their own homes etc etc.

    At which point, we are back to the reasons for reviewing the whole system.

     
 
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