The Greek Community of Melbourne has called on the Federal Government to increase pensions, on the occasion of the recent announcement of the Minister of Social Services that Australian retirees will not receive an automatic CPI increase this year, on the grounds that inflation has fallen.
We refer to the recent announcement by the Department of Social Services that Australian pensioners will not receive an automatic indexation increase this year as inflation has gone backwards.
Many of the Greek Community of Melbourne’s members are elderly Australians who rely on their pension as their only source of income. Since the announcement, many members have reached out to the Community seeking clarification of this decision and to voice their concerns.
While we understand that, overall, CPI has gone backwards over the last year (-0.3% for the period June 2019 Qtr to June 2020 Qtr), only looking at the CPI figure as a whole is misconceived, especially when considering how pensioners spend their money. In particular, we note that over the same
• food and non-alcoholic beverages increased 4.1%;
• clothing and footwear increased 0.5%;
• health increased 0.9%; and
• insurance and financial services increased 1.7%.
Consequently, not providing pensioners with an annual increase will mean that, for many, their spending capacity and quality of life will actually decrease. We do not consider that this is an appropriate way to treat some of Australia’s most vulnerable particularly during these difficult, emotional and trying times.
For this reason, we respectfully request that the Federal Government considers increasing the pension notwithstanding the negative annual CPI figure.
If an increase to the pension is not budgetarily possible, due to the Federal Government’s spending to help maintain and create jobs during these difficult times, for which we applaud the Government, there may be other ways in which pensioners may be assisted. A couple of these suggestions are briefly outlined below.
1. Increase the aged pension assets test limits
As you are aware, in recent years the growth of property values has far exceeded CPI. However, the increases to the aged pension assets test limits have not reflected this growth. This has resulted in many pensioners receiving a reduced pension due to no fault of themselves and not having any other sources of income. It has placed many of our Community members in very difficult situations.
In light of this, the Federal Government may consider a reasonable and realistic increase to the aged pension assets test limits. This will ensure that pensioners do not unnecessarily see a reduction in their pension due to factors outside their control.
2. Regulation of utilities, health and insurance As the Federal Government is well aware (having been an election issue), sectors like utilities (water, electricity, gas), insurances and health have seen costs have gone up year upon year far in excess if CPI. This has resulted in an increased portion of every pensioner’s pension go towards these necessities and is resulting in a steadily diminishing quality of life.
There is little point giving pensioners and low-income earners additional money each year where the portion of their income going towards paying the bills is increasing even faster.
Consequently, we believe that the Federal Government, with the assistance of State Governments, should look to better regulate utilities, the healthcare sector and insurances to help reduce and better manage the continuous and excessive yearly increases.
This will should be a minimal cost the to the Federal Government. However, the benefits willearners be far reaching and be welcome by all Australians, especially by pensioners and the low income earners. It will also mean that Australians will have additional funds to spend on other items, hopefully stimulating the economy by spending in small shops/businesses who are the main employers in Australia.