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Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
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Sick kids and paying upfront

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Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

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Pension cuts and the Greens

Most readers would be aware that the Greens have agreed to back Abbott government cuts to the asset test for the pension. According to Sky News the whole package

… will mean about 170,000 pensioners will get an extra $15 a week, while about 91,000 homeowner retirees will lose their part pension and another 235,000 will have their pension reduced.

Here’s how the Nationals Seniors group in their campaign against the cuts describes them:

The Coalition and the Greens have struck a deal to cut your pension.

If passed by the Senate next week, 325,000 pensioners will lose some, or all, of their pension.

From 2017, the assets test threshold for home-owning couples will be lowered from $1.15 million to $823,000.

For single home-owners it will drop from $775,000 to $547,000.

In addition, the current taper rate will double from $1.50 to $3.

The changes mean a single person with a small home, with an income of $17,875 p.a. (3.25% current upper level DSS deeming rate) from $550,000 in additional savings will no longer qualify for a part pension.

Yet a single person with a small home but no additional savings will continue to receive the full Age Pension of around $22,365 a year (2015 Age Pension amount) plus state and territory concessions on rates, utilities and registrations.

The cuts will ‘save’ $2.4 billion over 4 years. The Greens and others are painting them as a redistribution from the rich to the poor. They aren’t.

Not only that but the Greens won a meaningless ‘concession’ from the Government to include the superannuation tax concessions (which forgo revenue of over $30 billion with 38% of that going to the top ten percent of income earners) in the recently finished public consultations on tax reform prompted by the tax white paper Re:think.

So the Government has re-opened the consultation process but both Abbott and Hockey have made clear there will be no changes to superannuation while they are in power. The tax concessions of the rich are safe, and the Greens know it.

Are the changes fair? No. Dave Oliver, the Secretary of the Australian Council of Trade Unions, sent me and millions of other unionists an email on Saturday. It said in part:

This deal will see ordinary Australians worse off while wealthy self-funded retirees continue to receive generous tax benefits.

Analysis by respected research firm Rice Warner and superannuation experts Industry Super Australia shows those hit the hardest by the Greens – Abbott deal are middle to low income working people earning $75 000 or below.

That’s most of us.

You can read the full details here but it’s pretty shocking that the Greens have signed up to a deal that will disadvantage around 80% of single women retiring in 2055 as well as single men across most age groups.

Here’s part of what the linked press release (above) of Rice Warner and Industry Super Australia says:

According to data produced by actuaries Rice Warner and ISA, the proposed changes will impact most heavily on middle to low income workers earning average wages of $75,000 or below, and women most severely.

“One of the most troubling outcomes of this proposal is that around 80% of single women retiring in 2055 will be disadvantaged,” said Mr Whiteley.

“As it is, around 63% of single women will not be able to retire comfortably through to 2055, even with super, pension payments and other savings combined. This measure will deepen that inequity.”

Other impacts indicate:

•Single males currently aged 25-29 on incomes between around $27,500 to $143,000 would be adversely affected by the proposed cuts to the age pension.

•Single males currently aged 45-49 on incomes between $56,000 to $183,000 would be adversely affected by the proposed cuts to the age pension.

•Single males currently aged 55-59 on incomes between $52,000 to $160,000 would be adversely affected by the proposed cuts to the age pension.

These figures from Rice Warner on the pension changes show that the cuts are about attacking one section of the working class plus others and giving a few other retired workers a small pension increase.

All the while Don Argus and his wife continue to receive their $1.2 m super pensions tax free.

This is part of the Government’s strategy – protect the rich and their super while screwing workers and others on the pension. This chart – Chart 6 – from the Murray Inquiry into the Financial System – shows how unfair the superannuation tax concessions are.

This chart shows the proportion of superannuation tax concessions accrued to different deciles of income earners, based on 2011-12 ATO data. Higher income earners receive greater tax concessions, with more than half tax concessions accruing to the top 20 per cent of income earners.

 

The Abbott government’s pension cuts are part of a wider agenda to cut the pension even further over time. They failed with their pension indexation changes in the 2014 Budget so now are trying a more sneaky approach – us and them fake class war – to achieve a similar result. The cuts themselves are part of a wider attack on state payments to poor and working class people. It is no accident Morrison has begun calling the pension a welfare payment.

The Australia Institute did some analysis this year which argues that abolishing the superannaution concessions could see the abolition of pension income and asset tests and an 25% increase in the pension for everyone. Thus David Ingles says:

Why not make the pension universal – free of means test – and abolish the tax concessions? This would leave enough – even on the Treasury’s conservative ‘revenue gain’ figures – to raise the base pension rate by 25% and thereby ensure that most people gained more on the pension side than they would lose on the tax side. Some 80% of the population are estimated to be net winners – that is, their total income in retirement would be higher than under the current system. Particular benefit would flow to people, such as mothers, who had broken labour force histories.

Like David I believe in a universal pension (i.e. for everyone over 65 regardless of income or accumulated wealth). Otherwise you end up with these sorts of ‘hit worker’ results disguised as hit the rich arguments which some people like the Greens have fallen for.

The best way to address the accumulation of wealth by the rich is to tax it as income as it is being earned or wealth as it is being accumulated, not deny people including workers a pension or cut their pension. That means among other things a more progressive income tax system and a wealth tax plus sweeping away the tax expenditures that favour the rich.

In their eagerness to prove their ‘realistic and pragmatic’ credentials the Greens have been sold a pension pup that attacks retired workers but leaves the superannuation of the rich untouched.

For more information:

The full Rice Warner report on the Bill cutting pensions can be found here.

Miranda Stewart from the ANU’s Tax and Transfer Policy Institute says the cuts will hit middle and upper middle retirees (i.e. workers) but not the rich (ie bosses). She says the pension changes are effectively a 7.8 percent wealth tax on middle Australia.

Andrea Bunting in Green Left Weekly has a good analysis too. Greens support pension cuts but keep benefits for the rich.

Please sign this petition to fight the cuts to pensions and tell the Greens to oppose them.

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Comments

Comment from Andrea Bunting
Time June 20, 2015 at 7:21 pm

Good article John. Here is my article in the same topic. https://www.greenleft.org.au/node/59287
Cheers
Andrea

Comment from Cera
Time June 20, 2015 at 8:40 pm

Thanks for the write-up, John. This deal smelled from the beginning but it’s been hard for me to unwrap the details of the thing and the Greens’ own justifications.

Comment from Mike Ballard
Time June 20, 2015 at 9:02 pm

Thank-you, Comrade. I will share with others.

The upper 10% and the companies that they own should be taxed sufficiently to provide adequate levels of public health, education and welfare for the 90%. How that’s done, I leave to the experts.

Comment from Sam Crozier
Time June 21, 2015 at 12:09 am

John, like I say on Facebook, this data seems to conflict with the info I have. Maybe the info I have is wrong and yours is more accurate, or vice versa, I don’t know. But what I’ve seen says 80% of all pensioners will be unaffected by this, & only 6% adversely affected.

Comment from John
Time June 21, 2015 at 7:45 am

Thanks Sam. Not sure about the 6% figure. However as the ACTU says it is about catching people into the future and reducing their pension or cutting them off it too. So it has both an immediate and longer term impact.

Comment from Sam Crozier
Time June 21, 2015 at 9:16 am

BTW John, just sent you that zip file in a private msg on Facebook, containing the figures from Treasury and an analysis from the SuperGuide website, hopefully you’ll be able to see it soon – as I say, that data effectively substantiates the 6% figure.

Comment from Ross
Time June 22, 2015 at 1:00 am

The Greens too are owned by our corporate elites. He who pays the piper calls the tune.

World debt created from nothing by banks = $200 trillion. World GDP = $ 70 trillion. World gambling derivative market = $1400
trillion. Housing prices in this country are at least 30-40 % over valued.

Does anyone think that this will end well ?

Comment from Sam Crozier
Time June 22, 2015 at 2:51 am

Also as I said in that private message about future projection – that projection seems to assume the assets test stays fixed over time. that there won’t be any subsequent modification to take “bracket creep” into account. I think it’s very unlikely subsequent govts won’t change the asset test to keep pace with incomes. Any such position, opposing such changes in the future, would be politically untenable.

Comment from Lorikeet
Time June 23, 2015 at 5:31 pm

They are just trying to force everybody to put their savings into a superannuation fund, so they can be heavily GFCed.

I support a steady u-turn and windback from superannuation to a fully funded government pension system.

Comment from Lorikeet
Time June 23, 2015 at 5:34 pm

I think the idea that the Age Pension is a “welfare payment” could be challenged on the following bases. Since superannuation did not become compulsory for everyone until 1992, the Age Pension ought to be considered a Government Annuity until a person aged 18 in 1992 (born in 1974) reaches the age of 70. That means it would need to continue until at least 2044. Furthermore, the government would need to ensure that all Australian adults under age 70 had access to full-time permanent work. Even then, those with disabilities or caring responsibilities would still need to be able to receive a Government Annuity (or part payment) in their old age.

Comment from Lorikeet
Time June 24, 2015 at 7:28 am

I had a closer look at the graph, John. I think it is clear that the government is in cahoots with global bankers who want access to all avenues of profit.
This would include all financial holdings, health systemS, schools, public transport and housing.

I think the only way to get rid of these ******* is to wind back and dispose of the superannuation system and refuse point blank to sign up to any Trans Pacific Partnership, Economic Union, or Free Trade Agreement. There should also be a ban placed on importing foreign workers to take Australian jobs, a significant boost to manufacturing and a solid BUY AUSTRALIAN MADE advertising campaign. Everyone should also REFUSE SELF-SERVICE to maintain or recreate jobs.

Comment from Lorikeet
Time June 24, 2015 at 7:31 am

Sorry, forgot something. Also COLLECT A DOCKET FOR EVERYTHING…. and above all…. MAKE SURE YOU CHECK IT… then insist that DELIBERATE OVERCHARGING IS CORRECTED ON THE DATA BASE.

Unless everyone does this, supermarkets, department stores, etc will continue to feel free to rip off all of those who don’t bother.