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Abbott lies in letter to pensioners

October 16, 2014

Liberal government leader Tony Abbott has lied in a personal letter to Australia’s 1.7 million pensioners. The mail-out cost $1.2 million.

His letter says claims that the government is cutting pensions are “… not true. There are no cuts to pensions”.

On the eve of the 2013 federal election Abbott said there would be “no changes to pensions”. But the federal budget of May 2014 revealed that future pension increases would be indexed to the consumer price index (CPI) instead of the Pensioner and Beneficiary Living Cost Index (PBLCI), or the male average weekly earnings.

This will have the effect of reducing the rate of pension increases over time — a change to pensions and a cut in the value of the twice yearly increases.

A meme (picture story) that circulates on social media,

A meme (picture story) that circulates on social media.

It amounts to another broken election promise and another lie by a man who seems to be a pathological liar.

Here is the full text of Abbott’s letter, which is undated and carries his signature:

A MESSAGE TO AUSTRALIA’S AGE PENSIONERS

“In recent weeks, you will have noticed an increase in your pension.

This increase will help you keep up with the cost of living increases.

For single maximum rate pensioners, the pension will increase by $11.50 a fortnight. For pensioner couples on a maximum rate, it means an additional $17.40 a fortnight.

This is the increase for people on the maximum rate and the exact change in your own pension payment will depend on your individual circumstances.

This increase in the pension comes on top of the benefit you will receive from scrapping the Carbon Tax.

Not only are power costs falling because of the repeal of the Carbon Tax, but you will continue to keep the fortnightly Energy Supplement that was provided as compensation to help cover the costs of the Carbon Tax.

That means the Energy Supplement is now real cost of living relief, not just compensation.

Furthermore, the Pension Supplement will remain and will continue to be indexed.

There have been claims that the Government is cutting pensions. This is not true.

There are no cuts to pensions.

I want to reassure you that the pension will continue to rise in March and September every year.

In coming years, the numbers of people on pensions will increase as more people retire. Australians are living longer and healthier lives, so the Government is determined to ensure that our pension system is sustainable over the long term.

It is one of the reasons why the Government is taking steps to bring the Budget back under control.

If you need more information on pension rates and thresholds, please visit humanservices.gov.au.”

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Abbott writes: “There have been claims that the Government is cutting pensions. This is not true.But it is true! It just hasn’t happened yet. From September 2017, the twice yearly aged pension increases will be linked to the CPI — generally a lower index than either the PBLCI or male average weekly earnings. The government is doing this because it wants to reduce the size of the fortnightly pension bill.

So there it is, a CHANGE to pensions (a broken election promise) and a lower rate of increase in the future — a CUT.

Abbott’s letter also states: “There are no cuts to pensions.” That statement is true. But there will be, from September 2017 — if this “Liberal” government is re-elected in 2016.

In responding to claims that the government is cutting pensions, Abbott has missed a rare opportunity for his austerity focused administration to win some Brownie points. Because the index used for the September 2014 aged pension increase was the PBLCI, pensions rose by a greater amount than they would have if the CPI had been used.

The September increase was $11.50 for singles and $17.40 for couples. These increases would have been $9.30 for singles and $14 for couples, which is 19% less, if the CPI had been used. That potential reduction gives an idea of the extent of loss to pensioners, or savings to the federal budget from September 2017.

These details are explained in an article in The Australian Financial Review, another article in The Sydney Morning Herald and in this article and this article on the website of the Combined Pensioners and Superannuants Association of NSW.

Abbott’s letter refers to the Energy Supplement. This was introduced by the Gillard Labor government to compensate households for energy price and other increases due to the Carbon Price (which the Liberals insist on calling a tax).

It is peculiar that the present Liberal government promised to retain the compensation while at the same time insisting that there was a “Budget emergency”. The “tax” that provided the revenue for the compensation has now gone (an election promise kept), the compensation remains (an election promise kept), but there have been wholesale abolitions of departments, sackings of thousands of employees due to a “Budget emergency” that has been downgraded to “Labor’s debt and deficit disaster” and recently “Labor’s Budget mess” by a Treasurer, Joe Hockey, who told a New Zealand audience that there was no “Budget Emergency”. Where is the truth?

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The paragraph and sentence following “every year” in Abbott’s letter provide clues to the truth. Because the numbers of pensioners are increasing and they are living longer, the government is CHANGING the pension indexing to a lower rate (a broken election promise) to make it sustainable into the future. However, it does not have the decency to make a truthful, clear and honest statement about what it is doing and why.

The government’s Bill to change the pension indexation to the CPI alone was due to be debated in the Senate on 23 September, 2014. That debate was delayed (probably due to the government negotiating with crossbench senators). However, the government’s proposed pension CHANGES were debated on that day in a Matters of Public Interest (MPI) debate. The comments of Senator Mason (LNP, Qld), parliamentary secretary to the Minister for Foreign Affairs, are either hilarious or sick, especially his claim that Labor governments wanted to “eat the rich” but have since realised there are not enough of them so they have decided to eat the children of the future instead — a metaphor, of course.

Follow the debate by clicking on next fragment in the left-hand column.

In another blog I comment on Abbott’s statement on the 70th anniversary of the Liberal Party of Australia and his references to families, family values and the reality of the impact on families of the Liberal party’s policies since its election in September last year.

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