The Politics    Thursday, May 7, 2015

Eureka!

By Sean Kelly

Scott Morrison makes some wonderful discoveries about pensions

Scott Morrison’s conquest of the 2015 Budget continued today.

Having already dazzled us with childcare this week, the Social Services Minister announced significant changes to the pension. There are two things worth noting about these changes.

The first is that they represent a broken promise. The PM used diamond-sharp words to make his point before the election: “Pensions don’t change,” he said. Not a lot of wriggle-room there. He repeated that promise twice more, on ABC radio and SBS TV.

But I don’t think that will matter much, because of the second thing worth noting: the changes are good, as well as politically astute, policy.

Morrison has cleverly arranged to cut pensions at the top end in an entirely sensible way. Previously, the pension wasn’t available at all to couples with $1.15 million or more in assets (besides the family home). Now, it won’t be available to couples with just $823,000 (besides the family home). That’s still a fair bit of wealth. It’s pretty hard to see any complaints registering with the broader public. (About 91,000 pensioners will lose their benefits, and another 235,000 will see some reduction in their payments.)

At the other end of the scale, couples will be able to have assets of up to $375,000 and still receive the full pension, rather than the current $286,500. So there are 170,000 winners, too.

Plus the budget gets a $3 billion saving. 

The government will also be able to argue that the changes don’t take effect until after the next election, and are therefore not a broken promise. That’s not really correct – the government will make the changes this side of the election, which is what the PM explicitly promised not to do – but it’s probably enough to muddy the waters. (As a comparison, when John Howard broke his “never, ever” pledge on the GST he justified it by not legislating until after the next election.)

All that said, it’s always amusing to watch the spurious distinctions governments try to make. While breaking their word on pensions, the government has chosen to oppose Labor’s proposed changes to superannuation, in part because Tony Abbott promised – before the 2013 election – not to make any alterations to super.

Here’s Abbott three weeks ago: “Unlike Labor, we have no plans to increase taxes on superannuation and will honour our commitment not to make any adverse or unexpected changes to superannuation during this term.” 

Finally, if you were still in any doubt that Morrison is doing everything he can to make himself the biggest single winner out of this budget, you must have missed this line from the Daily Telegraph this morning:

Thousands of retired public service fat cats will be cut off from a $500 million double-dipping rort under which they can claim an aged pension while also drawing income from their taxpayer-funded superannuation, after the loophole was discovered by Social Services Minister Scott Morrison.

I have a wonderful image in my head of Morrison as Encyclopedia Brown, magnifying glass out, diligently foraging through budget papers, before suddenly raising his head and yelling “Eureka! I’ve got it!” I really hope it happened that way. If anyone knows different, please keep it to yourself.


Niki Savva reports the government whip told the PM that if the budget failed, Joe Hockey would have to go. The PM responded by calling the report a “complete invention” and saying Hockey would remain treasurer at least until the next election. The whip himself today refused to comment, but did not deny the story in quotations provided to Savva.

How vote-counting works in the Greens.

The Netflix tax is on its way. Mind you, the government won’t call it a tax – it’ll be an “integrity measure”. A rose by any other name …

With minutes to go until UK polls open, David Marr ponders the differences between British and Australian varieties of democracy. This time tomorrow there may be a new British PM. Given how close the polls are, though, there’s a better than even chance that nobody will yet know who’s in charge.

A thoughtful piece from somebody who actually lives on Struggle Street.

Confusion over what the Reserve Bank is trying to do, while unemployment rose slightly, as expected. And what does the treasurer actually mean when he says the government is working with the Reserve Bank?

Miranda Tapsell and the call for more indigenous stories on TV.

The Australian Bureau of Statistics has continued its record as the most effective pre-budget lobbyist (rarely a year goes by that you won’t read a leaked story about the apocalyptic cuts the bureau is about to endure – the census, think of the census!), winning $250 million for a technological upgrade. I’m not saying they don’t need the money – working on DOS was getting old, and sending faxes while everyone else used email was getting really old – just that there’s nobody better at asking for it.

Drug companies are considering going to war with the government over cuts to medicine payments.

The Australian Sex Party has been deregistered due to lack of members. I don’t think that’s the Electoral Commission’s attempt at a pun, either.

Finally, to pre-empt the pedants, who one can assume will have read this far: Encyclopedia Brown is a US series, and I have therefore preserved the spelling. 

Sean Kelly

Sean Kelly is a columnist for The Sydney Morning Herald and The Age, and was an adviser to Labor prime ministers Julia Gillard and Kevin Rudd.

@mrseankelly

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