Pension age hike will force thousands of elderly Australians on to the dole

Half of the 51,300 older Australians affected by an increase in the age pension age would move on to Newstart or the disability support pension in the first year alone, new figures suggest.

The Coalition has long proposed increasing the age pension age from 67 to 70, kicking in from 2025-26. The change is likely to make Australia’s pension age the highest in the developed world.

Government estimates show the move would affect 51,300 people in the first year alone, according to a response to questions asked in Senate estimates.

The government also predicts 12,934 people would move from the age pension to the disability support pension and 12,825 to the Newstart Allowance unemployment payment.

The changes have not yet been legislated, but the pension changes remain Coalition policy after being first proposed in 2014.

They would follow Labor’s increase of the pension age from 65 to 67 when it was last in government – a change that is being gradually implemented from July 2017 until July 2023.

The opposition has pledged to fight any further increase to the pension age.

The shadow social services minister, Jenny Macklin, said the data showed increasing the pension age would not necessarily keep older Australians in work, as the government intends. “Many Australians won’t be able to work for longer like Mr Turnbull wants them to. Instead they’ll just be forced to live on Newstart or the DSP,” Macklin said.

“Labor understands how hard it is for older Australians to find work, particularly when their job has taken a toll on their body and where there is age-based discrimination in the workforce.”

But the government has hit back, saying Labor’s policy would have created an extra 61,761 DSP recipients and 63,187 Newstart recipients by the time it was fully implemented in 2024-25.

“Jenny Macklin had no concern about this when she increased the pension age. Now she is crying crocodile tears – what a hypocrite,” a spokeswoman for the social services minister, Dan Tehan, said.

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Bill Shorten rebukes Pauline Hanson over threat to deny Labor preferences

Pauline Hanson has told the Labor leader, Bill Shorten, she will not “flow preferences” to Labor in the looming Longman byelection, or federally, unless the ALP puts the Greens last on how-to-vote tickets.

In response Shorten has accused the One Nation leader of “attempting to direct the preferences of Longman voters to the LNP” and criticised her for turning her back on the battlers by signing on to the Turnbull government’s ambition to cut taxes for Australia’s biggest corporations.

The spat between the leaders has played out in an exchange of letters, seen by Guardian Australia, following the high court’s decision last week in the Katy Gallagher case – a decision that has triggered a super Saturday of byelection contests including in the Queensland seat Labor holds by 1,390 votes.

The mini-election season looms as a significant test for both Malcolm Turnbull and Bill Shorten, with the major parties set to campaign on rival tax plans outlined during budget week.

A ReachTel poll published on Saturday suggests Labor will struggle to hold the Queensland seat of Longman, and One Nation is likely to be a significant factor in the result. If the survey is correct, Hanson’s party is currently polling 15% in the electorate.

Labor snatched the seat at the last election in part because of a favourable preference flow from One Nation, but the party’s candidate for the byelection, Matthew Stephen, has already made it clear publicly he wants to preference Labor last in the contest. On current indications that would help deliver the seat back to the LNP.

An incumbent federal government has not won a seat back from an opposition at a byelection for a century, but the share of the major party vote has been falling, and the strength of insurgent parties, like One Nation, will influence results in different parts of the country.

Hanson wrote to Shorten on Thursday “seeking an assurance from you as leader of the Australian Labor party that you will guarantee placing the Greens at the bottom of all Labor how-to-vote cards”.

The One Nation leader says she cannot “in good conscience flow One Nation preferences to Labor if their preference relationship continues with the Greens”.

Shorten replied on Sunday saying: “I know you are under a lot of pressure following your decision to support the prime minister’s $80bn tax handout to multinationals and the big banks.

“That’s the only explanation I can think of for your letter to me, in which you appear to be attempting to direct the preferences of Longman voters to the LNP.

“When Queenslanders voted for you at the last election, you should have been honest with them about your true intentions. You should have told them you would vote with Turnbull 90% of the time.”

He says Labor will not do a deal with One Nation either in Longman or in the federal election. “Sadly, you’ve put the top end of town first and Aussie battlers last – so that’s where Australian Labor will put One Nation in our preferences at the next election.”

“Your voting record in Canberra has left us with no choice but to put you at the back of the queue – because we’ll always put working Australians and their families first.”

The ReachTel survey of 1,277 residents across the federal electorate of Longman taken on Thursday night has the LNP polling ahead of Labor on two-party-preferred terms 53% to 47%.

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Peter Costello praises budget for delivering tax relief to the 'forgotten people'

Former treasurer Peter Costello has heaped praise on the Turnbull government’s $140 billion income tax cuts for delivering tax relief to the "forgotten people", but cautioned it may never be realised.

Last week, Mr Costello threw a hand grenade into the Turnbull government’s pre-budget messaging by warning he would probably be dead before government debt was paid off.

But speaking on Monday at a breakfast at the Centre for Independent Studies in Sydney, Mr Costello backed the government’s long term plan to deliver tax relief to high income earners, a group he described as the “forgotten people”.

However, he warned of potential work disincentive effects for lower income earners from the introduction of the new low and middle income tax offset.

“No Australians would have a clue what any of these offsets are because of the complexity,” Mr Costello said.
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“The trouble with these offsets is they do phase out, and when they phase out they actually add to what’s called the effective marginal tax rate.”

Despite this, Mr Costello said he supported the new offset because “that is a way of delivering benefits early, which I support, to hard-pressed low and middle income earners".

Mr Costello reserved his highest praise for the second phase of the government’s income tax plan which increases tax thresholds and abolishes the 37 cent tax rate from 2024-25.

“If you could get a 30 per cent rate in there between $40,000 and $200,000, that is really good tax reform and that’s the kind of thing we really want,” Mr Costello said.

“But the trouble is that that’s the plan for 2024 and you’ve got to survive two elections to get there. Even if it’s legislated now, if there’s a change of government it can be taken out, this is the problem.”

“[But] that is good tax reform: lower rates, less thresholds. That is very good tax reform, no doubt about that, in a design sense. It’s just that there’s a couple of contingencies before you get there.”

Mr Costello, who is chair of the government’s Future Fund, also warned of a “ticking time bomb” in the budget as more people become eligible for the age pension.

When the age pension eligibility age of 65 was first set in 1909, it was 10 years beyond average life expectancy. “You had to beat the average by ten years to get the age pension,” Mr Costello said.

Today average life expectancy is 86, while the age pension qualifying age remains at 65.5, rising to 67 by 2023.

Reflecting on the difference, Mr Costello said a Treasury official had once quipped to him that “Treasury was on top of its game in those days,” Mr Costello said.

“This is the biggest time bomb ticking in our welfare system,” he added.

While supporting the budget’s tax cuts for high income earners, Mr Costello repeated his warning that higher government debt left Australians more vulnerable to the next economic downturn. “We’d just be far more exposed when we go into the next financial downturn,” Mr Costello said

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Gambling the answer to saving Australia's heritage: economist

The federal government will spend $47.4 million on World Heritage sites over the next four years and another $28 million on historic sites on the National Heritage list.

The NSW government spends $3 million each year though its Heritage Grants program, with another $16 million provided over four years through the Heritage Near Me incentives.

Starved of money, beleaguered by weak and haphazard laws and too often sacrificed to property developers, Australia’s cultural heritage is the “forgotten child” of cultural policy, according to a leading economist.

But David Throsby, a professor of economics at Macquarie University, said part of the answer to conserving Australia’s heritage may lie with gamblers.

A lottery would provide an alternative source to cash-strapped governments to fund heritage projects, Professor Throsby suggests in Art, Politics, Money: Revisiting Australia’s Cultural Policy.

“In a spirit of unashamed plagiarism, we could copy the British example and set up a Heritage Lottery Fund,” he said.

“In fact such a mechanism would not be new to this country – the building of the Sydney Opera House (now listed as a World Heritage site) was financed by significant funding from the Opera House lotteries.”

Professor Throsby’s call for a lottery comes 12 months after the federal government promised in its 2017 budget to consider a “national good causes lottery” to provide funds for sport, arts and heritage.

A spokeswoman for the Department of the Environment and Energy said the proposal was still under consideration, but she did not say if it would proceed.

Broadcaster and comedian Tim Ross, who has made shows about modernist architecture, expressed his support for a lottery but also said incentives such as tax breaks and discounts on council rates should also be explored.

He said the argument was constantly made that historic buildings cost too much to maintain and “that’s just rubbish”.

Britain’s Heritage Lottery Fund has distributed £7.7 billion on more than 42,000 projects since 1994, according to its website.

More than 19,000 historic buildings have been restored with money from the fund, which is operated by a public body accountable to the UK Parliament, but its funding decisions are independent.

The National Lottery has also distributed billions of pounds to arts organisations, charities and sporting bodies.

Professor Throsby said heritage conservation was expensive, with more projects than existing levels of public funding can support.  “The National Trust and its state branches, and local historical societies etc, do a lot, but they are always short of money,” he said. “Project grants from funds raised by a heritage lottery would be a huge help.”

In NSW, the Opera House Lottery No. 1 was established in November 1957 and ran 496 lotteries that raised $105 million. However, the state government sold the NSW Lotteries Corporation to Tatts Group in 2010 for $1 billion, granting an exclusive, 40-year licence to conduct public lotteries in NSW.

Lotterywest, meanwhile, distributed $265 million in grants in Western Australia in 2016-17 to projects including conservation and heritage.

'Haphazard, unco-ordinated and weak'

Professor Throsby also described cultural heritage as a neglected area of Australian cultural policy in his Platform Papers essay published by Currency House.

He said the regulatory framework to protect and conserve heritage was "haphazard, unco-ordinated and weak".

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