Transcript by The Hon Jenny Macklin MP

Australian Government helps pensioners

JENNY MACKLIN: Around $2.5 billion in the Government’s economic Security Strategy payments – which were announced in October last year – these payments have gone to more than two million aged pensioners and also around 275,000 self-funded retirees who are receiving the Commonwealth Seniors Health Card. It was paid to single aged pensioners, they received $1400 each, and also coupled pensioners – they received $2100 a couple.

We did recognise just how difficult life is, how difficult it is to make ends meet for aged pensioners and other older Australians, especially with the impact of the global financial crisis. And that’s why we wanted to make these payments and make them in a lump sum available to people before Christmas.

We’ve also instituted a number of other changes both to help pensioners and self-funded retirees because we do understand the very significant impact on their standard of living.

I asked Centrelink in October to do a re-evaluation of people’s assets. And we also cut the deeming rate in November to make sure that the deeming rate better reflected the rate of interest available to pensioners and self-funded retirees for their investments.

All of these measures have been taken to make sure that older Australians are able to benefit as much as we can possibly make it – to get the Economic Security Strategy payments; to make sure that the valuation of their assets are up to date; and to make sure that the deeming rate better reflects the rate of interest available in the banking system.

In December pensioners and those receiving the Commonwealth Seniors Health Card also received the fourth quarterly instalment of the Utilities Allowance, or the Seniors Concession Allowance. The Government increased the Utilities Allowance when we first came into office – this was an election commitment that we made. We’re very pleased that in addition to the economic Security Strategy payments in December pensioners also received the fourth quarterly instalment of the increased Utilities Allowance.

We’ve just received updated numbers from Centrelink that give us an indication of how many extra people are coming onto the pension as a result of the pressures on people’s investments from the global financial crisis.

And the latest numbers show that there’s been a significant increase in the number of people both applying to come onto the pension and being eligible for the pension.

The numbers have gone up to 3000 a week in December, so it’s 3000 people a week in December now receiving the pension or coming onto the pension compared to around 2000 a week in October. This does reflect the significant impact of the global financial crisis on our pensioners and self-funded retirees.

QUESTION: How will this impact on the Budget’s bottom line?

JENNY MACKLIN: Well, we have the projections that show we’ll be facing a modest surplus and of course I can’t comment any further until we get up-to-date numbers later in the year. But they’re the latest projections that we have.

QUESTION: Can Australia afford this if more and more people need to go onto the pension?

JENNY MACKLIN: What we know is that it was critical for us to act quickly and decisively when we saw the impact of the global financial crisis on other countries and we recognised the impact that it would have in Australia.

That’s why we made the announcements on 14 October, to put $10.4 billion into the economy.

What I’m announcing today is that $2.5 billion of that money was paid to Australia’s aged pensioners and self-funded retirees, people receiving the Commonwealth Seniors Health Card. We know – just from talking with people – that the vast majority of people have bought things that they need with that money. And that, of course, is important for the economy.

QUESTION: Is this increase, though, likely to push the Budget into deficit?

JENNY MACKLIN: Oh, well, I’ve just answered that question. The projections that we have is that we face a small surplus. We know that it was important in the last Budget to build up a very significant surplus for difficult economic times.

We’re now in those difficult economic times, and that’s why we made the decision in October to allocate $10.4 billion to boost the economy, and also, as a down payment on pension reform, to help pensioners and self-funded retirees as they face these difficult economic times.

QUESTION: Was the size of the increase about expected, or were you surprised when a number of people are coming on and trying to claim the pension?

JENNY MACKLIN: Well we do understand that these are very very difficult times for self-funded retirees. We can see the impact on their investments, and that’s why we made the decision to not only provide this increased payment the increase of $1400, $2100 for couples, not only just to aged pensioners, but also to self-funded retirees who are on the Commonwealth Seniors Health Card because of the impact on the value of their investments.

So we do understand that the global financial crisis is having an impact on the value of their investments, and on the income that they receive from their investments.

QUESTION: But were the numbers higher, or what you expected?

JENNY MACKLIN: The numbers are, I think, what – certainly what I expected because of the seriousness of the crisis.

QUESTION: How will this affect the Government’s consideration of increasing the amount of the pension?

JENNY MACKLIN: Well, we’re undergoing a major review of the aged pension. We do understand how important it is to get this right. The pension review will report at the end of February, and will make decisions on the future of the pension system in the coming May Budget.

QUESTION: Do you expect the number of pensioners to rise again as the crisis deepens, or…

JENNY MACKLIN: I do think that it is likely that we’ll continue to see an increase in the number of people coming on to the pension, and also an increase in the number of people who are receiving the maximum rate of the pension.

We can see just how significant the global financial crisis is. We’ve just seen news come out of the United Kingdom this morning that demonstrates just how serious it is in that country.

Australia is not going to be able to escape from the impact of the crisis. So the purpose of the economic security strategy payments that we made to pensioners and to self-funded retirees was to give them extra assistance.

The Prime Minister and the Treasurer have said that they stand ready to make sure we do whatever we can to protect the Australian economy, to protect jobs, and of course, to protect pensioners and families.

FEMALE SPEAKER: Okay, last question.

QUESTION: Will you consider further one-off payments?

JENNY MACKLIN: Well, the Prime Minister and the Treasurer have both indicated that they will do whatever they think is necessary, whatever they think will help the Australian economy, whatever is needed to protect jobs, families, and pensioners, and we’ll certainly be looking at additional measures if that’s what’s considered necessary.

QUESTION: The Government has just cut 133 jobs from the ATO. Isn’t that contrary to the message the Government is setting to retain them?

JENNY MACKLIN: I’ve only just seen that report.

QUESTION: How many more people are you anticipating will be applying for the pension, do you have any predictions.

JENNY MACKLIN: I don’t have any of those predictions.

QUESTION: Can we just have a question on light beer? VicHealth says that light – the tax on light beer should be reduced to encourage people to buy light beer and also encourage alcohol producers to develop more low alcohol products.

What do you think about that idea?

JENNY MACKLIN: This issue will be examined as part of the Henry review on taxation. So these are important matters. You’d understand that the Government is very concerned about abuse of alcohol. It’s one of the reasons we made the decision we made on ready to drink products in the Budget.

We know this is a very very serious issue, and many parents – I’m a parent, of young men, and I understand, at a personal level, just how significant this issue is.

So that matter will be examined as part of the Henry review on taxation.