Reforms could mean pension cuts

Australia's 3.5 million pensioners stand to have increases to their allowances cut as a result of the Coalition Government's controversial new industrial relations reforms.

Not only does the Australian Government want to abolish basic working conditions, they also intend removing the power of the Industrial Relations Commission to set the minimum wage.

This is not only bad for paid workers; it is also detrimental to pensioners.

The pension in Australia is calculated according to the Social Security Act, 1991.

The Base Pension (ie. not the pension supplement) is indexed twice yearly based on the Consumer Price Index (CPI) but is also benchmarked against Male Total Average Weekly Earnings (MTAWE) at 25 per cent.

March this year was the last time the pension went up.

The Australian Bureau of Statistics (ABS) publishes the CPI quarterly.

The Base Pension is then increased by the percentage change in the CPI over a six month period.

The new CPI indexed amount was then compared with the latest MTAWE figure.

As in previous years, if the new CPI indexed amount was less than 25 percent of MTAWE, an extra amount is added to the base single pension so that it is at least 25 per cent of MTAWE.

The MTAWE figure includes the earnings of men on the minimum or junior wages as well as higher paid workers.

The Australian Government wants to take the minimum wage settling powers away from the Industrial Relations Commission and give them to its handpicked Fair Pay Commission.

We can only wait to see how much of an oxymoron this name is.

The American equivalent hasn't increased their minimum wage since 1998.

The Fair Pay Commission will make its first minimum wage decision in late 2006, and the implementation of this pay rise 'adjustment' could be delayed even longer.

The incumbent Australian Government considers the minimum wage too high: it wants to take penalty rates out of awards.

This will mean a catastrophic drop in wages for shift workers.

Naturally prices will continue to go up including the basic necessities of life (because of petrol prices of which more than 33 per cent goes to the Government in tax).

When the MTAWE goes down so will pensions.

This will mean pensioners will have difficulty paying skyrocketing bills for essentials such as food, housing transport and health services.

One must ask how are people going to save up enough in superannuation to afford a decent retirement?

The proposed industrial relations changes are unjust, regressive and will guarantee greater inequality.

The pension will be eroded in real terms relative to prices.

The IR changes must be opposed to prevent looming impoverishment of wage earners (the working poor will be a reality) and people on fixed incomes (pensions).

After 14 years of prosperity this is what we get offered.

These changes must be opposed.

If you are not happy with these IR changes, lobby your local Federal member.

Mike Hudson, Umina Beach