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The Coalition's real action plan to support seniors



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The Coalition’s Real Action Plan to

Support Seniors

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 2

EXECUTIVE SUMMARY

The Coalition recognises the contribution that Senior Australians make to our society and our economy.

The Coalition has a plan for real action to support Seniors.

We believe that Seniors should be able to participate in the workforce, live in safe communities, have a

financially secure retirement and get access healthcare benefits.

With an ageing population, the Coalition also believes the voice of Seniors needs to be heard at the

highest levels of Government.

Labor has attacked superannuation, private health insurance and the Commonwealth Seniors Health

Card as well as abolishing the Pension Bonus Scheme.

The Coalition believes that Seniors deserve better.

To provide real support for Seniors, the Coalition will:

1.

Introduce

a Seniors’ Employment Incentive Payment to help seniors who want to work and who

are out of the workforce to find a job;

2.

Index the Commonwealth Seniors’ Health Card income thresholds;

3.

R

etain the existing income test rules for access to the Commonwealth Seniors Health Card and

oppose Labor’s attempts to restrict the benefits available to self-funded retirees;

4.

Abolish the Superannuation Guarantee Age Limit;

5.

Direct

the Australian Office of Financial Management to examine issuing bonds for terms of up

to 30 years;

6.

Establish

a national ‘Safer Seniors’ programme to support local efforts to improve the safety of

Seniors in their homes and communities; and

7.

Create

a Minister for Ageing and Seniors so that Australians over the age of 50 have a real voice

in Government decision-making.

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 3

HOW LABOR HAS FAILED

By Julia Gillard’s own admission, the Rudd-Gillard Government has lost its way.

Reckless spending, nearly $90 billion of debt, a $57 billion deficit and Labor Government borrowings of

more than $100 million every day have left the Australian economy in a highly vulnerable position.

Labor has lost control of the nation’s finances, hurting Senior Australians already feeling the pinch from

higher electricity, health and food prices.

Labor has failed to recognise that Senior Australians worked hard, paid taxes and built our nation. Our

services deserve to be respected and valued.

Labor also ignored Seniors in devising their so-called productivity agenda.1

Labor has provided Senior Australians who want to work with no real incentives to remain in the

workforce. The Henry Review noted that, relative to OECD countries, Australia’s participation rates are

low for men and women aged between 55 and 64 and that ‘incentives for existing workers to remain in

work are critical’.2

Labor has also made it harder for Seniors by halving the maximum limit on concessional super

contributions.

Despite its spending spree on ‘pink batts’ and ‘school halls’, Labor has made pension access harder by:

• raising the ‘Taper Rate’ on the income test for the pension eligibility;

• abolishing the Pension Bonus Scheme;

• opposing the Coalition’s bill in 2008 to raise the pension by $30 a week; and

• attempting to restrict access to the Commonwealth Seniors Health Card.

Labor also broke an election promise not to reduce or means test the Private Health Insurance Rebate.

1. Wayne Swan. ‘Government’s productivity agenda to tackle future challenges,’ (Press Release, 1 February 2010) at

0&DocType=0>.

2. Australia’s Future Tax System (Henry Review), Report to the Treasurer, Part two, volume 1 (2009) 19 at < http://taxreview.treasury.gov.au/content/downloads/final_report_part_2/AFTS_Final_Report_Part_2_Vol_1_Consolidated.pdf>.

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 4

THE COALITION’S PLAN FOR REAL ACTION TO SUPPORT SENIORS

The Coalition has a plan for real action to create more opportunities for Australian Seniors.

The Coalition believes that Seniors should be able to participate in the workforce, live in safe communities,

have a financially secure retirement and access healthcare benefits.

The Coalition has already announced a range of policies that will be of direct benefit to Seniors.

Significant health policies announced by the Coalition include our $1.5 billion Mental Health policy and

our $950m Aged Care policy. Details of both these policies are available at www.liberal.org.au.

In

addition to these significant policies that will be of enormous potential benefit for Seniors, the

Coalition has a plan to provide further real action to support Seniors.

The Coalition’s plan for real action to support Seniors includes:

1. Seniors’ Employment Incentive Payment

Finding work becomes more difficult for the over 50s.

This is not due to a reduced desire to work,

reduced skill levels or a reduced ability to contribute. Instead, some employers prefer to give job

opportunities to younger workers.

This may also reflect a mismatch between the type of work available and the preferences of the

individual jobseeker, for example, there may be a preference for part-time work but only full-time work

is available.

The official unemployment rate for older Australians is lower than the national average but this is

because there are significant numbers of discouraged unemployed (those who are no longer looking

for work but would take a job if they could find one), disabled and retired.

According to the National Seniors Association 2010 election submission:

“In 2009 almost 60,000 Australians aged over 55 counted as ‘discouraged workers, that is: they

wanted to work but had stopped looking because no one would employ them. The main reason

cited was being considered too old by employers.” 3

To help address this problem faced by older jobseekers, the Coalition will introduce a Seniors

Employment Incentive Payment for employers that hire mature workers aged 50 years or older. The

Incentive Payment will be paid to employers who hire a jobseeker currently unemployed or out of the

workforce and registered with Centrelink.

It will be a one-off payment designed to help overcome the

initial reluctance of some employers to appoint older jobseekers.

3 N SA Election Document, July 2010, page 7

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 5

The Incentive Payment will be paid for workers who were registered with Centrelink at the time of

their employment and on a benefit, including the unemployed, people with disabilities, and aged

pensioners.

The minimum period of continuous employment required to qualify for the Incentive Payment will be

six months.

The Incentive Payment will be worth up to $250 a fortnight on a pro rata basis, for a total

subsidy for 6 months of $3250 for employing a Senior on a full time basis.

This is equivalent to around

half the cost of the current Newstart Allowance.

The Incentive Payment will be paid in a single lump

sum directly to the employer after six months continuous employment by the eligible worker.

NATSEM analysis, based on 2005-06 and 2007-08 ABS survey data, confirms around 900,000 people

aged 50-65 would be potentially eligible for the Incentive Payment.

If just a small fraction of these eligible people took advantage of the Incentive Payment there would

be a significant positive impact on employment levels as well as a saving to taxpayers from reduced

benefits and increased taxation revenues.

The Coalition’s Seniors Employment Incentive Payment will commence from 1 July 2011. The initiative

will be evaluated after three years to determine its effectiveness.

2. Indexation of the Commonwealth Seniors’ Health Card income thresholds

The Coalition will introduce indexation of the eligibility income thresholds for the Commonwealth

Seniors Health Card (CSHC).

The CSHC helps Seniors with the cost of prescription medicines and other health services. The CSHC is

provided to people who are of Age Pension age but do not qualify for the Age Pension. Eligibility for the

CSHC is means-tested and the income thresholds are not currently indexed. The income thresholds are

currently set at $50,000 for singles and $80,000 for coupled combined.

Indexing these thresholds to inflation will allow recipients of the CSHC who maintain their incomes in

real terms to continue to be eligible to receive the CSHC. This indexation will be of particular benefit to

recipients who are on the cusp of the income thresholds.

3. Retain existing income rules for the Commonwealth Seniors Health Card

The Coalition will maintain its commitment to give self-funded retirees access to the Commonwealth

Seniors Health Card.

The Coalition will commit to retaining the current income test rules.

In government, the Coalition increased access to the Commonwealth Seniors Health Card to help self-funded retirees access medicines. The Coalition increased access to the card eightfold from around

35,000 in 19964 to 278,378 when the Coalition left office in 2007.5

4 F aHCSIA answers to Senate Estimates Questions on Notice detail that there were 33,000 Card Holders in 1994 and 42,600 in 1998, leading to the reasonable estimation of around 35,000 in early 1996.

5

F

aHCSIA, 2007-08 Annual Report, 145.

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 6

In the 2008/096 Budget, Labor proposed to change the income test to include salary sacrificed income

and income from superannuation pensions with a taxed source. Labor’s policy would have excluded

some self-funded retirees and we reject it outright.

4. Abolish the Superannuation Guarantee Age Limit

The Coalition will abolish the Superannuation Guarantee age limit from 1 July 2013.

The current age limit set on the Superannuation Guarantee unfairly discriminates against older workers

and forces them into retirement, when many want to continue in the paid workforce.

The Superannuation Guarantee currently only applies to workers up to the age of 70. Under the Coalition’s

plan, any worker, no matter their age, will be guaranteed to receive superannuation contributions from

their employer.

5. Examine issuing bonds for terms of up to 30 years

The Coalition will direct the Australian Office of Financial Management (AOFM) to examine the issuing

of bonds for terms of up to 30 years.

The high take-up rate of the age pension demonstrates the difficulties Seniors face when planning for

their future.

When Australians leave the full-time workforce, many find themselves on fixed incomes. Financial

market turmoil in recent years reduced the value of some Seniors’ retirement savings.

Seniors deserve certainty for their investments. One of the most secure investments is Government

bonds.

At the moment, the maximum term for Government bonds is 15 years, limiting the period for which

Seniors can make highly secure investments.

In order to give Seniors and others more choice, the Coalition will direct the Australian Office of Financial

Management to examine issuing bonds for terms of up to 30 years.

6. Establish the ‘Safer Seniors’ Programme

The Coalition believes Seniors have the right to feel safe and secure within their homes and in their

communities.

Many local councils provide services to improve the safety of Seniors. These locally-run programmes

involve activities such as:

• Audits for home safety, not only in relation to intruders and burglary but also persona, i including bathroom safety, electrical hazards and fire safety;

• Seniors safety workshops;

• Public Transport safety, including having designed “safe routes” for seniors;

6. Budget Paper No 2 2008-2009, 381 at .

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 7

• “Safe routes” programmes - where certain streets are designated as “safe” because they are flat, well lit, or involve local shopkeepers/householders who can offer help etc;

• Phone link services, where seniors are contacted regularly to check they are OK; and

• Personal security alarms (like Medic alert) that are monitored real-time.

The Coalition commends these programmes and believes they should be supported and expanded. The

Coalition will therefore introduce a national ‘Safer Seniors Programme’ to provide additional resources

for these valuable activities.

Under this initiative, local councils will be able to apply for grants funding of up to $100,000 per annum to

either supplement their existing activities or commence similar programmes in their local communities.

Grants will be assessed against their potential to improve the safety of Seniors in their homes and

communities, with a focus on home security and crime prevention.

Funding of $7.5 million will be made available through the Coalition’s National Community Crime

Prevention Programme.

7. Appoint a Minister for Ageing and Seniors

The Coalition will create a Minister for Ageing and Seniors.

Having an Australian Minister for Ageing and Seniors recognises that Australian Seniors face more

issues than just aged care.

A Minister for Ageing and Seniors will also ensure that Seniors have a real voice in Government decision-making.

Recognising the growing needs of Seniors and the specific policy imperatives created by ageing

populations, Canada, New Zealand and Western Australia now have Ministers with specific

responsibilities for Seniors.

T H E C O A L I T I O N ’ S P L A N F O R R E A L A C T I O N T O S U P P O R T S E N I O R S 8

COSTINGS

The Coalition will commit an additional $32.5 million over the forward estimates towards these initiatives

to support Seniors.

This funding will be provided from the more than $24 billion in recurrent savings that have been identified

by the Coalition over the forward estimates.

These savings are a result of cutting Labor’s waste and mismanagement and redirecting funding from

inefficient and poorly performing Labor Government programmes.

2010-11

$M

2011-12

$M

2012-13

$M

2013-14

$M

TOTAL

$M

Indexation of CSHC income thresholds1 - 4 8 13 25

Safer Seniors Programme2 - 2.5 2.5 2.5 7.5

1. Estimate is based on available ABS and Budget information.

2. Costs to me met from the $50 million announced for National Community Crime Prevention Programme.

Authorised and printed by Brian Loughnane for the Liberal Party of Australia, Cnr Blackall and Macquarie Sts, BARTON ACT 2600.