The Coalition and the Greens have cooked up a “filthy” deal on pensions that will take money out of the pockets of pensioners, the shadow families minister, Jenny Macklin, said.
Labor announced that it would shun the government’s changes to the part pension on Tuesday, which would reduce the threshold for the value of assets people could hold before being eligible for the payment. To offset that, the pension at the lower end of the scale will increase by $30 a fortnight.
But the Coalition have secured the support of the Greens, avoiding a $2.4bn shortfall in the budget.
“We are pleased that the Greens have seen the common sense and good policy of this initiative,” the social services minister, Scott Morrison, told Channel 7 on Wednesday.
The measure is expected to benefit 170,000 lower-income pensioners, while leaving an estimated 330,000 worse off.
The Greens had pressed the government on reviewing retirement incomes in exchange for their support, and secured an extension to the consultation process for the tax white paper.
But the government has ruled out changes to super.
“I will be able to say that this government will never do that,” prime minister Tony Abbott told Parliament during question time on Wednesday. “We are not going to increase taxes on superannuation and we are not going to make superannuation more restrictive.”
Labor said the Greens have been duped.
“The Greens have got a completely dud deal. They have got some commitment to a pathetic review when Tony Abbott has already ruled out any changes to the tax treatment of high-income superannuants,” Macklin told reporters on Wednesday. “What we see ... is that there has been a filthy deal done between the Liberal party, the National party and the Greens party to cut the pensions of 330,000 part pensioners.”
The Greens leader, Richard Di Natale, said he was “surprised” the Labor party supported giving “wadfulls of cash to people on very high incomes”.
“The partisanship involved here is just silly; it doesn’t do anyone any good,” he told ABC TV.
“We have a decent policy that increases the pensions for people at the low end of the scale. And for people who have a family home and over a million dollars worth of assets, some of them will be worse off. But it’s a much fairer system.”
“Even a broken clock gets it right occasionally so we decided to back this measure,” Di Natale said.
The Greens leader acknowledged the current government is unlikely to change its mind on changes to super, but said having an extended consultation process will “lay the groundwork” for future governments to enact changes.
Both the Australian Council of Social Service and advocacy group for senior Australians, Cota, have welcomed the part-pension changes.
Both groups want a large-scale review of Australia’s superannuation system, beyond the changes to the part-pension.
“This approach certainly makes more sense than the original proposal to change indexation, but questions will legitimately be asked as to why even a small proportion of pensioners should be in the firing line while wealthy people who were never going to be eligible for the pension anyway continue to get generous superannuation tax concessions which they don’t need and which save government nothing on pension expenditure,” Cota chief executive Ian Yates said last month.
“That’s why it’s critical to the long term viability of Australia’s retirement income system to have an independent, comprehensive review which considers pension policy alongside superannuation, tax, mature age employment policy, aged care costs and other issues.”
