Australia’s pensioners are already struggling. Yet the message to working class people from the Abbott government’s budget is clear: when a lifetime of wage work has used you up, and your body and mind are too worn out to generate more profits, to hell with you.
A Salvation Army report tells the story of 65-year-old pensioner Agnes. After suffering back and neck injuries, Agnes was unable to continue caring for her husband, who was moved into a nursing home. This took a devastating chunk out of Agnes’ income, as the couple were forced to use her husband’s part of the pension to pay for his care.
At least Agnes, at 65, actually qualifies for the age pension. Under Abbott’s changes, the retirement age will be lifted to 70, taking precious years away from working people’s lives.
In the December 2013 quarter, the official poverty line for a married couple with no kids was $575.55 per week; the pension for a couple in this situation scraped in above it at $671.40. But stories like Agnes’s show that in reality, someone surviving on a pension alone is one serious medical problem, one big-ticket appliance malfunction, one family emergency away from destitution.
Eve, another pensioner mentioned in the Salvation Army report, is isolated and housebound due to mobility problems. For this 80-year-old single woman, without transport, medical appointments are greatly stressful. When Eve’s washing machine broke down, her laundry began to pile up. She was forced to turn to charity for a replacement.
Australia’s older people already experience one of the worst rates of poverty in the developed world. A Bank of America Merrill Lynch report on ageing populations places Australia 57th in a global ranking of countries by income security in old age. The report illustrates that even before Abbott’s attacks on pensioners, working class people suffer the indignities of poverty in their later years.
The federal budget proposal to change the way increases to the age pension are indexed will make this situation even worse. Previously, pension increases have been based on average male wages. Transferring this indexation to CPI increases will, over the long term, cut pensions catastrophically in real terms.
The Australian Council of Social Service estimates that Abbott’s indexation changes will reduce pensions by about $80 within a decade. In May, the Australian Financial Review reported an even more damning analysis, which estimates that pensioners would be getting 35 percent less than they otherwise would have in around 30 years’ time. A couple would receive a full basic pension of $63,000 per year, instead of $97,000 under the arrangements prior to Abbott’s attacks.
Ian Yates, chief executive of the Council for the Ageing, says the changes are harsher than the recommendation of the Commission of Audit that the age pension be set at 28 percent of average weekly earnings. “At least it was linked to wages”, says Yates.
The federal government says the changes to the pension will save around $500 million over five years. To put this in perspective, Mark Wakeham of Environment Victoria criticises the budget for continuing to grant $10 billion in fossil fuel subsidies to big polluters every year.
If the message wasn’t already clear, it is now. While the Abbott government has been swamped with complaints from angered pensioners, this isn’t just an attack on older people – it’s an attack on workers. Abbott is telling workers that, after a lifetime of contributing to the economy, paying taxes and working hard to support ourselves and our families, we will have no dignity in retirement.
If the Liberals get their way, we’ll be discarded like broken machinery.
