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Scott guarantees: pensions will always be higher with a GST than without it.

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The Hon Simon Crean MP

Deputy Leader of the Opposition and Shadow Treasurer


29 March 1999





The Prime Minister wouldn’t do it, the Minister for Family Services wouldn’t do it, but the Minister for Veterans Affairs has at last conceded.


Labor has argued that under the GST package, the 4 per cent pension increase will be eroded to zero over time because pensions are also linked to wages.


With wages projected to rise faster that inflation, the initial pension increase will be eroded over time, to the extent that pensions will be no greater with the GST than they would be without it.


The Government’s change of heart came in question time today.


Minister Scott guaranteed that veterans’ pensions with a GST would always be higher than they would be without a GST . ( See full text below .)


This is a major concession and responds to the criticism of the GST package compensation from Geoff Carmody of Access Economics.


But questions still remain.


First, does the guarantee on veterans’ pensions apply to all pensions?


Second, what’s the additional cost of this concession?


Labor welcomes this new concession by the government that the GST package's compensation is simply not enough.


But no amount of sugar-coating can make the GST fair.



Full text of Minister Scott’s statement on Veterans’ pensions




Minister, can you guarantee that veterans’ pensions under the GST will always be higher than they would be without the GST?


SCOTT:  The answer is yes .


We’ve repeated from this side of the House several times that they will have a 4% increase one off, up front, in the, in the, 1 July they’ll receive a 4% up front increase in all pension entitlements, right through to benefi ts including childs’ education assistance. And that comes up up front on the 1st of July next year. If you pass the GST package.



Further information: Phillip Tardif (02) 6277 4045(w), (0419) 491 166