Transcript by The Hon Jenny Macklin MP

Pension increases – ABC Tropical Queensland Mornings

Program: ABC Tropical Queensland

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KIM KLEIDON: Some rather exciting news for aged pensioners this week set to receive an increase to their pension. In the studio joining me this morning Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, good morning.

JENNY MACKLIN: Very good to be here.

KIM KLEIDON: Is this your first visit to Mackay?

JENNY MACKLIN: No, I’ve been a number of times. My dad was actually born in Mackay.

KIM KLEIDON: So a bit of history with you then.

JENNY MACKLIN: A little bit.

KIM KLEIDON: So it would be pleasing to come here and make the announcement. What is it you’re actually talking about today and who to?

JENNY MACKLIN: It’s very good to be here with James Bidgood, of course our local Federal Labor Member here in Mackay, and we’re going to be heading down to the Senior Citizens’ hall in McAlister Street to talk with local pensioners about the pension rise. And later on in the morning we’re going to go and meet with some disability pensioners as well. That’s one of the things that I wanted to mention today was that of course this is a rise for age pensioners, but also for disability support pensioners, for those carers on the carer payment, wife and widow pensioners, and also of course our veteran income support recipients. So all of them will benefit.

KIM KLEIDON: How much will it actually increase by?

JENNY MACKLIN: If you’re a single pensioner on the maximum rate, obviously there are many on part-rate pensions, but if you’re on the maximum rate and a single pensioner, you’ll have an increase of just over $70 a fortnight. So it is a substantial rise and it’s made up of a number of parts. Of course the rise that we announced in the Budget, so that’s finally coming through, and also an increase to a new pension supplement, and that supplement’s going to be made up of all the allowances and supplements that people currently get. So the utilities allowance, the telephone allowance at the higher internet rate, and also the GST supplement and the pharmaceutical allowance. They’re all going to be wrapped together and the full value of those allowances will make up the new pension supplement, then we’ll add a bit on to them, and that’ll become the new pension supplement and it will be paid fortnightly with people’s pension.

KIM KLEIDON: There’s been a lot of pressure in the last twelve months on the Government to do something about the situation with the pension. How important was it to actually increase it and how was that amount set?

JENNY MACKLIN: It really was the number one job, was to get the adequacy of the pension right and so we set out to do a major inquiry into the pension to see what the level should be. The recommendation was that we put it up to the amount that we have, but that we also set the single rate of the pension to be two-thirds of the couple rate. Because it is of course more expensive to live alone, and our inquiry into the pension did find that it was singles living alone who really were finding it the hardest to manage. You’re right people have waited a long time for this pension rise, a very long time. We did give a down payment on the pension, on this pension rise last December. You might recall $1400 that went to singles and the $2100 that went to couples. That’s certainly from the pensioners I spoke to has helped but we did want to get it right and now we are in this fortnight starting the process of delivering this pension rise straight into pensioners’ bank accounts.

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KIM KLEIDON: I’ve heard various comments since the announcement. But is it enough? We hear so many stories from people who are struggling on pensions and they have to spend so much on things like medications once you’re over 60.

JENNY MACKLIN: Well, there’s no doubt that medications are a big issue and as I talk with pensioners that gets raised regularly. Of course, the most important thing for every pensioner is to be registered for the safety net, so that once you’ve bought a certain number of medications then you can get the rest of the year your medications for free. So it is important that pensioners register for the safety net so they can get that benefit. That’s the way that we do help pensioners make sure, and others, make sure that they are more able to afford their pharmaceuticals. But just on the broader question of keeping the pension up to date with prices, one of the other things that we’ve done is introduce a new indexation system. We heard from pensioners a lot before the election and they were very frustrated with the indexation system, thinking that it didn’t really reflect their cost of living. So we asked the Bureau of Statistics to develop a new pensioner living cost index. They’ve done that for us. And as it’s turned out we are using that index this time, the 20th September is the indexation point, and that pensioner living cost index has delivered a slightly higher level of indexation than would have happened on the old consumer price index. What we said to pensioners is, don’t worry if it does happen in the future that the consumer price index is higher, then we’ll use whichever is the higher.

KIM KLEIDON: What sort of effect will that have though? Like how does that change things with the indexation, just treat me like I’m a person who doesn’t know?

JENNY MACKLIN: That’s okay. So if you’re a single pensioner on the maximum rate of the pension, the indexation increase for this period, so starting on the 20th September, is $5.83 a fortnight, that’s if you’re a single. And if you’re a couple, this is just the impact of indexation, it’s $9.63, that’s combining the base index and also the impact of indexation on the supplement, so putting the two together.

KIM KLEIDON: You’re listening to ABC Tropical North with Kim Kleidon. This morning in the studio, Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin. We’re taking questions from you out there. If you have any questions for the Minister, 1300 101 222, if you’d like to ask them directly. Now Jenny, Mackay is a high cost living area and our pensioners obviously experience a higher cost than many others in the region. Do you think they’re being short changed as a result?

JENNY MACKLIN: Well of course, the pension is a system that operates for every single person who’s eligible across Australia. It is something that we have to figure out for everybody and make it fair for everybody no matter where they live. It is, of course, then up to local organisations or the local council to do extra things for people who need that bit extra help, but as far as the Commonwealth’s concerned, we have to make it fair for the whole country. We’ve, as I think I’ve indicated, done a lot of work over the last year or so to try and make sure we get the level of the increase as right as we possibly could and we do think that this improvement in the pension, particularly for those on the maximum rate if you’re a single pensioner, will make a difference to their lives.

KIM KLEIDON: Would rent relief be something that the Federal Government would look at for people who are paying higher rents in certain areas?

JENNY MACKLIN: We do pay rent assistance, and I know this is a big issue up here, and we are of course adding to the number of public housing units that are available. Around Australia we’re building more than 19,000 extra public housing units and I’m pleased to say for any of your listeners who are in public housing, pensioners in public housing, your rent won’t be going up as a result of this pension rise. We’ve got an agreement from the States this time round, at least, that we won’t see a rent rise if you’re in public housing, and we’re increasing the number of public housing units so as to at least give some people some relief in that department.

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KIM KLEIDON: We speak regularly to services for the community like Meals on Wheels. Does it concern you that there’s been a huge rise in the need of services like Meals on Wheels?

JENNY MACKLIN: Well, one of the other things that we’ve done really recognising the impact of the global financial crisis on those who are struggling in our community, we doubled the level of emergency relief. So that now is flowing through to agencies right around the country, so that if they do have people coming in whether they’re pensioners, might be families who just for whatever reason can’t manage, then that emergency relief has been doubled. And we’ve also increased the level of financial counselling because people can get themselves into difficulties. They don’t necessarily need more than a hand to figure out how to get out of their difficulties and a good financial counsellor can really make a difference.

KIM KLEIDON: Well that’s fine, but I return to the question, is it enough of an increase to help these people?

JENNY MACKLIN: Well it is the biggest increase, the biggest change to the pension we’ve seen in 100 years. So if you look at history, I think people would recognise that it is a very substantial increase. And just to give you some idea of the cost to the Federal Budget, it’s over the next four years, going to cost around $16 billion this pension rise. It flows to 3.3 million Australians. So you can understand it is a very big decision to make an increase of this level given the very significant numbers of people that it applies to, and the very significant cost to the budget. We wanted to do it because we knew people were struggling but we also wanted to get it right and as I say, we’ve done a lot of work to get it to this point.

KIM KLEIDON: Knowing the cost of living, I’ve been a single parent for most of my time, and knowing the increase in the costs over the last even five years have been quite significant, $35 even to someone my age, wouldn’t go a long way. Do you think people are still going to struggle?

JENNY MACKLIN: I think it’s important for us to recognise that people who are on the pension certainly know how to manage their money. They make that clear to me every day of the week that I talk with them. But certainly the individual pensioners I’m talking to understand just how important it is that we did the work we did to get this pension rise and it will be in their bank accounts over the coming fortnight.

KIM KLEIDON: This is ABC Tropical North. If you’ve got any questions for the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, she is in the studio. We’re taking your calls 1300 101 222. We have Guy on the phone this morning, good morning Guy.

GUY: Good morning, how are you?

KIM KLEIDON: I’m well.

JENNY MACKLIN: Good morning Guy.

GUY: G’day Jenny how are you?

JENNY MACKLIN: Very well, excuse me, croaky.

GUY: Look, my question is, we have over the last twelve months or certainly the last nine I think, been getting some sort of a bonus, and to be honest with you I can’t recall whether it was the $120 or $150 per quarter.

JENNY MACKLIN: Ah right, yes, that would be the utilities allowance.

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GUY: (inaudible) encompassed in this new increase and will no long occur?

JENNY MACKLIN: That would be the utilities allowance, I’m pretty sure that you’re talking about. One of the first things that we did when we came into Government was to significantly increase the utilities allowance, and to also pay it quarterly as you’ve just described.

GUY: Right.

JENNY MACKLIN: The full value of that utilities allowance is now going into the new pension supplement.

GUY: Right.

JENNY MACKLIN: So you won’t lose the value of it but you’ll now be able to receive that fortnightly. One of the things we heard from pensioners is that, as we were just talking about a minute ago, pensioners are pretty good at managing their own money, and so they said they wanted to receive this money fortnightly. We are going to change the system next July and give pensioners the choice. If you’d like to receive some of that quarterly rather than fortnightly you’ll be able to do that from next July. As you can imagine Centrelink’s had an enormous amount of work to do to get all of these changes together, so that choice will be available to people if they’d like it. But it will be entirely up to the pensioners to choose.

GUY: So it’s now part and parcel of the overall figure of what is it, $32.50 or something?

JENNY MACKLIN: No. no. The $32.50 this is, I’m really glad you asked that question. The $32.50 a week which we announced in the Budget as the increase, is on top of the value of what you’re already receiving. So that’s the extra you’ll receive, but you’ll also receive the value of your utilities allowance and the telephone allowance at the higher internet rate. So even if you weren’t getting the telephone allowance at the higher internet rate, we will now pay that to all pensioners who are entitled to it as part of their fortnightly supplement.

GUY: Great, so when does this all happen? When do we get our cheque?

JENNY MACKLIN: Well, it’s not normally paid by cheque. Normally it goes straight into your bank account and if you’re already a pensioner that will happen on your normal pension day, and that’s important for everybody to know. If your normal pension day…

GUY: In the next fortnight?

JENNY MACKLIN: That’s exactly right. So if your normal pension day is tomorrow, you’ll get obviously only three days worth of the increase. But if it’s next Thursday, you’ll get most of the two weeks worth of the increase, otherwise people will just have to wait a week or so longer.

GUY: Fantastic.

JENNY MACKLIN: Okay thank you.

KIM KLEIDON: Thank you very much for your call Guy. And if anyone else would like to call we only have a few minutes left, 1300 101 222, if you have questions for the Minister.

Now I know that you’re heading down to the Senior Citz centre very shortly, will you be listening to some of these concerns and will you take it on board, will there be any changes forward from here?

JENNY MACKLIN: Well, obviously we’ve just put in place some of the biggest changes ever, so my job really is to answer people’s questions. One of the things that I’m always happy to do though is to chase up any other issues that people have and want to raise, and that always happens at forums like this, so people should come along if they’ve got issues that they want to raise either with James Bidgood or with myself. Of course, we’re more than happy to answer them. But I think you’ll find a lot of the questions in my experience are just like Guy. What does this actually mean for me? How will it happen? It is a big change and of course we’re very happy to explain it.

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KIM KLEIDON: So will all those questions be answered during your time at Senior Citz?


KIM KLEIDON: And the public’s welcome?

JENNY MACKLIN: They certainly are welcome to come along.

KIM KLEIDON: What time will you be there?

JENNY MACKLIN: We’ll be there from a quarter to ten and then I’ll be heading off down to Centrelink after that, about 11 o’clock, to talk to people in Centrelink and of course to listen to them about the calls that they’re getting. If I can just finish by saying if people do have any other questions, if they’ve missed me here this morning, of course they’re more than welcome to ring Centrelink, and Centrelink will take them through any of the issues they have.

KIM KLEIDON: Fabulous. That’s very good information. Wally has called just before we go. Good morning Wally.

WALLY: Good morning.

JENNY MACKLIN: Good morning Wally.

WALLY: A question I’d just like to ask. I was reading on the letter yesterday from Veterans’ Affairs, looks like the Service pension has dropped $10 a fortnight?

JENNY MACKLIN: Well the Service pension shouldn’t have dropped $10 a fortnight, Wally. So without having your letter in front of me it’s very difficult to understand why it might have changed for you. If you’d like to either, you’re very welcome of course, if you’re able, to come down to the Senior Citz hall. Or alternatively, if you want to drop me a note in Parliament House in Canberra, I’m more than happy to have a look at your letter that you’ve received from Veterans’ Affairs and figure out why you’re experiencing the change that you are.

WALLY: Okay.

JENNY MACKLIN: No trouble.

KIM KLEIDON: Thanks for your call. That’s Wally with a question about Veterans’ Services pension and a drop, or a perceived drop? So that’ll be good if you could help him out with that.

JENNY MACKLIN: We certainly will.

KIM KLEIDON: Owen also has a question. Good morning Owen. This will be our last question today.

OWEN: Good morning.

JENNY MACKLIN: Good morning Owen.

OWEN: The question I would like to ask is the fact that we’re in private accommodation, one might say. In Mackay it’s far too expensive for a pensioner to be able to get a unit on account of Mackay being in a rich area, however we’re very happy with these places, such as the one we have in Mackay. However, they’re all over Australia, and the part is though that they take 85% of our pension. Now we did ask that the increase be quarantined so that it went into our bank, and wasn’t able to be touched. However, no notice was taken of that. Now one would like to say and we appreciate what is being done for us, however we feel that these particular private accommodation where they supply food as well, there are 100 here, and they’re very elderly mostly, that the establishment itself should be helped out by a reduction in taxes or some other way, so that they are helped. At the same time though, that we should be able to get the increase entirely to ourselves as pensioners.

JENNY MACKLIN: Are you in an older persons hostel Owen, is that the sort of place that it is?

OWEN: Yes.

JENNY MACKLIN: Right. What we’ve done there in that case, is make sure that some of this increase goes to the individual pensioner, and some of it goes to the hostel operator. Because as you mentioned the hostel owner does provide food and do they do the laundry and those sorts of things for you as well?

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OWEN: Well we do, they will do it if you wish, but we do our own laundry.


OWEN: We have to pay for our own power.


OWEN: And telephone, that’s natural. Look we like it here, it’s very nice.

JENNY MACKLIN: That’s good.

OWEN: But we feel that you should be able to help those people in some other way rather than have the increase taken out of our increase?

JENNY MACKLIN: Look, I might just describe the situation for hostel residents and once again if you’d like to send me your details, because it does sound like you might be in a slightly different situation. If you’d like to just send that to me I’m sure the ABC will tell you where to send it just to Parliament House in Canberra. But what we have done for nursing home and hostel residents is make sure that some of this increase, around $500 a year does go to the resident and some of it does also go to the hostel or nursing home owner, because of course, they too are facing increased costs for the accommodation they provide, the food and nursing care, all the other jobs that they do for elderly residents. So we have divided up the benefit if you like so that some of it goes to residents and some to the nursing home or hostel provider.

OWEN: As it stands at the moment, we don’t get much more than $5 a week and you know that’s only the cost of one of our medical scripts.


KIM KLEIDON: Owen, if you just want to hold the line we have run out of time, we have to go news headlines, but if you hold the line we’ll give you some more details about how you can contact the Minister.

OWEN: Thank you.

KIM KLEIDON: Thank you. That’s Owen and our final question for the Minister who’s been in the studio. Very nicely done that half an hour here. And obviously off to see the Senior Citz and if anyone else would like to ask you more questions they can meet you there.

JENNY MACKLIN: Very welcome.

KIM KLEIDON: Enjoy you day here in our fine city and we look forward to those improvements coming through.

JENNY MACKLIN: Thank you very much.

KIM KLEIDON: Jenny Macklin, the Minister for Families, Housing, Community Services and Indigenous Affairs in Mackay today. And of course if you’d like further information about where Jenny will be today you can call us here, 1300 101 222.