Transcript by The Hon Jenny Macklin MP

Pension increases – ABC Wide Bay

Program: ABC Wide Bay

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ROSS PEDDLESDEN: We’re pleased to have the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin in the Wide Bay today. She’s here, I was told, to touch base with local pensioners. Let’s find out what the heck that means with Jenny Macklin, good morning.

JENNY MACKLIN: Great to be here.

ROSS PEDDLESDEN: Tell us why you’re here. What does touching base with local pensioners mean?

JENNY MACKLIN: It is to talk with local pensioners about the biggest reforms that have been introduced to really help pensioners right across Australia, including here in Wide Bay. It’s about talking with them, and going into all the detail that we can about what it means for them. So just to give you an idea of the basics, if you’re a single pensioner on the maximum rate, these changes will mean an increase of just over $70 a fortnight for you. So as you can imagine, this is very very well deserved for many many pensioners and there’s certainly a lot of them in this local area.

ROSS PEDDLESDEN: It took a heck of a long time to come.


ROSS PEDDLESDEN: And we had a lot of discussion on this radio station as you can imagine about the fact that people wanted, and needed, an increase far sooner than you actually gave it. People needed it last year and the year before.

JENNY MACKLIN: And the year before that.

ROSS PEDDLESDEN: That’s right, and…

JENNY MACKLIN: And the whole twelve years that Mr Howard was in Government of course completely ignored …..

ROSS PEDDLESDEN: So are you ready for people to not just say thank you for the increase, but to say why didn’t you give it to us sooner?

JENNY MACKLIN: We’re really here to make sure that we’re able to explain the detail of the changes, to make sure that it is as well understood as it possibly can be. Because we’re not only increasing the pension, you’re dead right, much deserved and long overdue, and if I can just say unfortunately the Howard Cabinet refused to give an increase to the pension. What we did, once we got to Government, was immediately increase the utilities allowance. But we also put forward at the end of last year, a down payment on pension reform, which was part of our stimulus package, and so pensioners received $1400 if they were single pensioners, $2,100 if they were couples combined. And of course that helped people, help the economy as well, while we did the big review of the pension and the announcements were made in the Budget.

ROSS PEDDLESDEN: So why was that review so important? What did you want to change by going through a review?

JENNY MACKLIN: A number of things. One was to get the level of the increase right, and so we had some detailed work done to look at what level of increase was needed. One of the major recommendations of that review was to get the single rate of the pension up to two-thirds of the couple rate. A lot of pensioners themselves, but also the technical work we did showed us that we really needed to improve the pension for singles, aged pensioners of course, but also people on the disability support pension and carers. We knew that they too were finding it very hard to make ends meet, especially if they were living alone.

ROSS PEDDLESDEN: So is it your opinion now that you have a better structure to the entire system?

JENNY MACKLIN: We do have a better structure now. Of course we’ve improved the adequacy of the pension which was the number one job we had to do. We have a better structure. We do have a pension now that for single people is two-thirds of the couple rate. We have been able to improve the couple pension as well. But what we’ve also done is introduced a new Work Bonus because even though there’s not that many old age pensioners who want to go out and get paid employment, but the numbers that do would like to keep more of what they earn so we’ve introduced a new Work Bonus. We’ve decided to end the Pension Bonus Scheme because our pension review really said it wasn’t doing what it set out to do. It didn’t really encourage people to keep working. But I would say to any of your listeners if they are in the Pension Bonus Scheme, they can stay in there and will still get the benefits of it. They’re not going to lose out.

ROSS PEDDLESDEN: So what’s the future? Do you keep reviewing things? Do you believe now that you’ve got a structure that’s going to be workable in the long term? I mean we have listeners telling us that they’re still hurting, especially over rents, that anybody who, you know you can live reasonably comfortably on the pension if you own your own home, but that fairly substantial minority of pensioners who have to submit them to the rental market are still hurting, will still hurt. What can you say to them?

JENNY MACKLIN: Well there’s no doubt that rent is an issue and that’s one of the reasons why we’ve decided to very significantly expand the number of social housing units that we’re building. And so, around the country there’s around 19,000 more social housing or public housing units, or houses being built. And we’ve got a new national rental affordability scheme, so we’re working in with both non-profit organisations and the private sector to build houses that really are more affordable than a lot of people are paying in the private rental market. You’re dead right about that being a serious issue.

ROSS PEDDLESDEN: And look those social housing units that the Government announced were welcomed by housing groups in the Wide Bay, it’s a couple of hundred units. It’s not going to, it’s going to be a long time before a program like that actually makes a substantial difference to rents isn’t it?

JENNY MACKLIN: It’s nevertheless the biggest housing program, the biggest social housing program, that we’ve seen in fifty years.

ROSS PEDDLESDEN: So the point I’m making is, maybe you need to do something else?

JENNY MACKLIN: Well, this change that we’re implementing, the pension change, is actually the biggest change in 100 years. So I think we have to actually recognise that first. We’re also implementing the largest improvement in social housing that’s been done for fifty years, so we are actually doing a lot in both of these areas. There’s one other issue that I thought I should touch on, on your point about sustainability, and that is that we have introduced a new method of indexation. A lot of pensioners said to me over the years, we’re not convinced that the consumer price index reflects our increase in cost of living, and so we said before the election that we would develop this new pension living cost index. We got the Bureau of Statistics to do that so it’s independent from the Government, and as a result of that new index we are actually seeing a slightly higher increase in our pensions this time than we would have if the consumer price index had applied. So there are some good sustainable measures that will make sure that the value of this pension rise is maintained over time.

ROSS PEDDLESDEN: So can you guarantee to pensioners that there won’t be that unconscionably long delay that they’ve had to ensure up until now?

JENNY MACKLIN: Well, every six months we’re going to, and this is in legislation, every six months the pension is indexed and we look at what’s happened over the previous six months, and we’ll either use the consumer price index or this new pensioner living cost index, whichever one is higher, we’ll index the pension. The other thing we’ve done and this is the first time it’s increased for a very long time, pensions are also benchmarked to wages, Male Total Average Weekly Earnings to be precise, and so it used to be that pensions had to be 25% of male wages. What we’ve increased that to is 27.7% and that’s the first time we’ve seen an increase in that benchmark since it was originally introduced. So that’s another way in which we can make sure we maintain the value of pensions against wages.

ROSS PEDDLESDEN: And a final practical point. I had a listener ring me yesterday who said, I went down to get my money, and I was told, no pensions are paid in arrears, the pensioners actually won’t get the extra money until the end of the fortnight. Is that correct?

JENNY MACKLIN: Well, they’ll get whatever they’re entitled to on the pension day. So it depends on their normal pension day. So if their pension day was yesterday, of course, it’s only been introduced for a day. If their pension day is in two weeks time because it’s a fortnightly cycle, then they’ll get virtually the whole value of the increase in this fortnight. But of course everybody will get it in the coming fortnight or the week after so it’s not far away.

ROSS PEDDLESDEN: All right, Jenny Macklin, it’s a pleasure to see you and thank you for visiting us here at ABC Wide Bay.

JENNY MACKLIN: Good to be here.

ROSS PEDDLESDEN: That’s Jenny Macklin, the Families, Housing, Community Services and Indigenous Affairs Minister, and yes I did have to read it again, I’m sure she can remember.