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Part-pension changes secure passage after Coalition agrees deal with Greens Part-pension changes secure passage after Coalition agrees deal with Greens
(35 minutes later)
The Abbott government has struck a deal with the Greens to secure changes to the part-pension, just hours after Labor announced it would seek to block the $2.4bn budget saving.The Abbott government has struck a deal with the Greens to secure changes to the part-pension, just hours after Labor announced it would seek to block the $2.4bn budget saving.
The new leader of the Greens, Richard Di Natale, said the government had agreed “to give special consideration to retirement incomes in its tax white paper, which means we can finally look at superannuation as part of the equation”.The new leader of the Greens, Richard Di Natale, said the government had agreed “to give special consideration to retirement incomes in its tax white paper, which means we can finally look at superannuation as part of the equation”.
The treasurer, Joe Hockey, confirmed the white paper process would be extended to look at retirement incomes, but he made clear the government was not budging from its opposition to increasing taxes on super.The treasurer, Joe Hockey, confirmed the white paper process would be extended to look at retirement incomes, but he made clear the government was not budging from its opposition to increasing taxes on super.
The part-pension changes replace the unpopular plan in the 2014 budget to cut pension indexation across the board.The part-pension changes replace the unpopular plan in the 2014 budget to cut pension indexation across the board.
The changes, due to begin in January 2017, would create winners and losers by reducing the maximum value of assets people could hold to remain eligible for the part-pension, while increasing the generosity of the system at the lower end. The taper rate – the speed at which the part-pension reduces as a retiree’s assets increase – would be changed so that payments cut out sooner.The changes, due to begin in January 2017, would create winners and losers by reducing the maximum value of assets people could hold to remain eligible for the part-pension, while increasing the generosity of the system at the lower end. The taper rate – the speed at which the part-pension reduces as a retiree’s assets increase – would be changed so that payments cut out sooner.
About 91,000 current part-pensioners would no longer qualify for the pension and a further 235,000 would have their payments reduced, the government says, but more than 170,000 pensioners with modest assets would have their pensions increased by an average of more than $30 per fortnight.About 91,000 current part-pensioners would no longer qualify for the pension and a further 235,000 would have their payments reduced, the government says, but more than 170,000 pensioners with modest assets would have their pensions increased by an average of more than $30 per fortnight.
Labor announced on Tuesday morning that it would oppose the changes, but the government now has the numbers to secure Senate passage thanks to the support of the Greens.Labor announced on Tuesday morning that it would oppose the changes, but the government now has the numbers to secure Senate passage thanks to the support of the Greens.
Di Natale said the decision was consistent with the Greens’ opposition to the Howard government’s changes to pension taper rates in 2007.Di Natale said the decision was consistent with the Greens’ opposition to the Howard government’s changes to pension taper rates in 2007.
“Now we’re restoring the system to ensure that everyone has a decent retirement. All Australians deserve a system that supports them in retirement, not just the wealthy,” he said on Tuesday evening.“Now we’re restoring the system to ensure that everyone has a decent retirement. All Australians deserve a system that supports them in retirement, not just the wealthy,” he said on Tuesday evening.
“When I took on the leadership of the Greens I said I was here to get positive outcomes for the community wherever I could, so I’m pleased to be able to deliver on this.”“When I took on the leadership of the Greens I said I was here to get positive outcomes for the community wherever I could, so I’m pleased to be able to deliver on this.”
The Greens senator Senator Rachel Siewert – who has long said the party would consider the government’s proposal if there was a comprehensive review of retirement incomes – said the changes would make the system fairer.The Greens senator Senator Rachel Siewert – who has long said the party would consider the government’s proposal if there was a comprehensive review of retirement incomes – said the changes would make the system fairer.
“The broad retirement income review we’ve secured will be delivered as part of the tax review process,” she said.“The broad retirement income review we’ve secured will be delivered as part of the tax review process,” she said.
“The terms of reference are explicit about involving stakeholders at every stage, to build on the already strong appetite for further change, particularly to the super tax concessions.”“The terms of reference are explicit about involving stakeholders at every stage, to build on the already strong appetite for further change, particularly to the super tax concessions.”
Hockey said the government had agreed to a six-week extension for the deadline for submissions to the tax white paper, which will now be 24 July.Hockey said the government had agreed to a six-week extension for the deadline for submissions to the tax white paper, which will now be 24 July.
The government would also “initiate an additional stakeholder engagement process”, the treasurer said.The government would also “initiate an additional stakeholder engagement process”, the treasurer said.
This would give interested parties time “to put their views into the tax white paper process in relation to key interactions between the age pension, superannuation, taxation and employment”.This would give interested parties time “to put their views into the tax white paper process in relation to key interactions between the age pension, superannuation, taxation and employment”.
“The tax white paper will consider submissions on how policy settings can better encourage more productive use of savings to optimise retirement incomes, in simpler and more effective ways, not simply restricted to superannuation,” Hockey said.“The tax white paper will consider submissions on how policy settings can better encourage more productive use of savings to optimise retirement incomes, in simpler and more effective ways, not simply restricted to superannuation,” Hockey said.
“This will include issues such as equity release and comprehensive retirement income stream products.”“This will include issues such as equity release and comprehensive retirement income stream products.”
But Hockey gave no hint the government would actually shift on its opposition to reining in superannuation tax concessions which favour the wealthy.But Hockey gave no hint the government would actually shift on its opposition to reining in superannuation tax concessions which favour the wealthy.
He said the government had “given clear commitments that there will be no unexpected, adverse changes to superannuation in this term of government nor do we have any plans for such changes beyond the next election”.He said the government had “given clear commitments that there will be no unexpected, adverse changes to superannuation in this term of government nor do we have any plans for such changes beyond the next election”.
“Specifically, the government will not increase taxes on superannuation and will not remove any current flexibility in accessing superannuation in retirement,” Hockey said.“Specifically, the government will not increase taxes on superannuation and will not remove any current flexibility in accessing superannuation in retirement,” Hockey said.
The social service minister, Scott Morrison, said the pension legislation would be considered in the Senate “after passing the House of Representatives at the earliest opportunity”. Di Natale said the government had committed to a separate retirement income section “so that they can make it clear that these are recommendations that they may or may not support”.
He said the blueprint would “be ready for anyone who wants to take up those policies”.
“The government’s ruled out doing anything on super. We knew that. But what it does do is it puts all of those issues on the table for a new prime minister potentially in this term of government, a new government after an election,” Di Natale told Guardian Australia.
The Greens party room discussed the part-pension policy multiple times and gave final sign-off on the stance on Tuesday.
The social services minister, Scott Morrison, said the pension legislation would be considered in the Senate “after passing the House of Representatives at the earliest opportunity”.
He thanked the Greens “for their constructive engagement” and also praised senators Nick Xenophon and David Leyonhjelm for their input.He thanked the Greens “for their constructive engagement” and also praised senators Nick Xenophon and David Leyonhjelm for their input.
“Support for the single largest savings measure in this year’s budget, following passage of the government’s cornerstone small-business measures, demonstrates the Abbott government is successfully getting on with the job of implementing our ‘have a go’ budget,” Morrison said.“Support for the single largest savings measure in this year’s budget, following passage of the government’s cornerstone small-business measures, demonstrates the Abbott government is successfully getting on with the job of implementing our ‘have a go’ budget,” Morrison said.
The Coalition needs the support of six out of eight crossbenchers to secure Senate approval for any legislation opposed by both Labor and the Greens. But the government does not need the crossbenchers’ votes now that the Greens are on side.The Coalition needs the support of six out of eight crossbenchers to secure Senate approval for any legislation opposed by both Labor and the Greens. But the government does not need the crossbenchers’ votes now that the Greens are on side.