Daniel Hurst Political correspondent
Thursday 2 April 2015
Scott Morrison to ‘consider seriously’ the alternative proposal following complaints about the plan to cut pension increases laid out in the budget
Scott Morrison accused Labor of sticking its head in the sand on the issue. Photograph: Alamy
The Abbott government is considering limiting wealthy retirees’ eligibility to the part-pension as an alternative to its controversial budget policy to cut the rate of pension increases, the social services minister, Scott Morrison, has said.
Morrison signalled the potential back down after the government faced nearly a year of internal and external criticism for its decision to confine pension increases to the consumer price index from 2017.
Groups including the Australian Council of Social Service (Acoss) have repeatedly argued the original budget measure would erode the value of the pension relative to wages over time, and the government should instead consider tightening eligibility rules for the part-pension.
Morrison said he would “consider seriously” the Acoss proposal because the government was “wedded to the goal” of a sustainable and adequate pension system rather than any particular measure.
The chief executive of Acoss, Cassandra Goldie, said the plan to target the pension to those who most needed it would involve “reducing the current threshold that allows couples with as much as $1.1m in assets on top of the family home to qualify for a part-pension”.
Goldie spelled out her alternative proposals in a statement issued on Wednesday. Acoss proposed reducing the cut-out point for the part-pension for couples to $794,250 in assets besides the family home, saving the government an estimated $1.45bn in 2016-17.
Morrison signalled his openness to the plan. He said he had asked the sector and crossbench senators “if they have better proposals to make our pension sustainable”, and he would “keep on the table measures until there are new measures to put on the table”.
“What I am saying particularly in relation to the pension is that the proposal put forward by Acoss today is something we will consider seriously. I am interested in getting an outcome and a solution here that delivers a sustainable pension for all Australians, not just those today but those in the future,” Morrison said in Adelaide.
“Acoss, by putting this forward today, understands that that is something we have to address. We can’t just stick our head into the sand which is what the Labor party appear to be doing.”
Morrison said the government was aiming to “get to a point where we can be in agreement about the measures that will deliver a sustainable pension”.
“That is what I am wedded to,” he said. “The government is wedded to the goal and our goal is to have a sustainable and adequate pension into the future and it is clear that if you keep just going down the path that Labor is suggesting which is to stick your head in the sand and do nothing then you will run the pension off the edge of a cliff.”
The opposition leader, Bill Shorten, refused to say whether he would support the proposed changes to the pension asset test.
“I’m not going to give this government a blank cheque,” Shorten told the ABC on Thursday.
“What I would support is well thought out, detailed policies, which they haven’t put to us. The discussion in this morning’s newspapers is nothing more than Scott Morrison having a thought bubble.”
Shorten said there was still no concrete proposal on the table, but the government appeared to finally be admitting problems with its pre-existing policy to cut pension indexation.
“It is correct that Labor has opposed the government cutting the rate of pension indexation and today for the first time it appears that after nearly a year of Tony Abbott and Joe Hockey saying government policies were unfairly being targeted by Labor through a scare campaign, for the first time we see chinks in the armour of the government’s propaganda campaign where they have tried to pretend that somehow what they were doing was good for pensioners.”
At a later media conference, Shorten left the door open to supporting changes to part-pension eligibility, which would spare the government the need to seek crossbench support in the Senate
“Labor has always been up for making sure that we have the fairest possible system, but pensioners of Australia should not have to consider the Abbott government’s budget measures with a gun to their head which is cuts to $80 a week in pension indexation,” he said.
Labor’s families spokeswoman, Jenny Macklin, said the government “should put carefully considered proposals to the public and then we can all look at them in a proper way”.
The Greens senator Rachel Siewert said her party supported calls for “a broad review of retirement income instead of fragmentary changes to the pension.”
“This review should include looking as the assets test and changes to super concessions,” she said.
The pension indexation changes were announced in the government’s first budget, delivered in May last year, but faced a Senate obstacle.
Morrison has been signalling for some time that he was looking at the pension issue. He recently proposed reviewing the adequacy of the pension every three years in an attempt to win crossbench support for the indexation changes.
Morrison said community and seniors’ groups and the independent senator Nick Xenophon had offered constructive alternatives in what he described as a “coalition of ideas”.
He said the government would “work through these measures in careful detail and seek to cost them fully”.
