In the period leading up to the Federal Budget there was a range of public discussion about suggested changes to the Age Pension. This included a variety of proposals from various public policy institutes and statements by the Federal Treasurer, often from an international platform. This discussion took place in the public arena without any process of proper consultation with stakeholders. COTA wrote to the Treasurer on 11 March seeking his agreement to set up “a structured process of roundtable discussions involving key stakeholders to look at varied policy options and their social and economic impacts”.
We also pointed out that the “age pension is one part of a multifaceted retirement incomes landscape” and that all should be considered in any reform process as, for example, superannuation tax concessions are comparable to the cost of the pension but inequitably distributed. A copy of our letter to the Treasurer is attached.
When discussion continued without any response from the Treasurer we wrote on 14 April to the Prime Minister. expressing a range of concerns about the pension discussion in the media, especially regarding indexation, and again proposing stakeholder consultation. We noted the Prime Minister’s election commitment that there would be no change to the pension, as did other organisations. A copy of our letter to the Prime Minister is attached.
On 28 April in a speech to The Sydney Institute, the Prime Minister commented on the cost of the pension but announced that “To keep our commitments, there will be no changes to the pension during this term of parliament but there should be changes to indexation arrangements and eligibility thresholds in three years’ time.” This was confirmed in the Federal Budget when it was announced that assets and income tests, and deeming thresholds, would change in July 2017 and pension indexation from September 2017.
The Commission of Audit report publicly released on 2 May made significant recommendations on pension eligibility age, indexation, and asset and income testing. COTA does not support most of those recommendations, and would submit others to further consideration in our proposed Retirement Incomes Review. However we note that the Commission’s recommendations were accompanied by some rationale and argument, and were nowhere near as severe as those imposed by the government in the Federal Budget.