Budget razor gang shelved plan to cut pension payments to wealthy seniors
Government instead chose to slash indexation of payments for all
pensioners, according to report, a move which Labor says will make
pensioners $80 a week worse off
The Abbott government’s budget razor gang shelved a secret plan to
kick millionaires off the aged pension in favour of slashing the
indexation of payments for every pensioner in Australia, according to a report.
The razor gang was asked to consider slashing pension payments to
wealthy seniors last year by changing the taper rate, the preferred
option of the former minister for social services, Kevin Andrews,
the Sunday Telegraph reported. This move would have reversed Howard-era
changes that brought more high income seniors into the pension system.
Senior ministers had said they agonised over whether Tony Abbott would be accused of kicking seniors off the pension and breaking an election promise not to cut pensions, the report claims.
Instead, treasury proposed a change to the indexation arrangements
for all pensioners, meaning the rate of increase would effectively be
slowed, from 2017.
The change was announced in the May budget, with welfare groups and
Labor arguing it would cut pensions by $80 a week within 10 years.
The treasurer, Joe Hockey, reportedly preferred treasury’s proposal
because it would create larger structural savings and would not
outwardly breach the government’s promise not to cut pensions.
The Labor leader, Bill Shorten, said that Abbott had “lied to pensioners before the election”.
“Now every single pensioner has to pay the price for that lie.”
“It’s ridiculous that while the pension is being cut, some
multinational corporations are paying little to no tax, and
multimillionaires are receiving new tax breaks from the government.’’