Writing in February 2011, Peter Martin noted that "working households faced extra costs of 4.5 per cent in the year to December, age pensioners 3.1 per cent and welfare recipients 4.5 per cent. The CPI grew 2.7 per cent."
He also noted how the Bureau of Statistics had argued that "age pensioners spend a relatively high proportion of their income on utility bills and fruit and vegetables, both of which shot up in price in the year to December."
But while aged pensioners had their payments adapted to "either the CPI [or] the pensioner living-cost index or male total average earnings (whichever is most favourable)," Newstart Allowance is only adjusted to "what is…the lowest of these."
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This means that even in the face of onerous active labour market policies and 'work for the dole' programs, Newstart has been eroding greatly relative to other pensions for a long time.
Carbon tax overcompensation is a great opportunity to finally provide for the basic cost-of-living pressures faced by all pensioners, and especially by Newstart recipients.
Most Newstart recipients should receive overcompensation of $50/week. Those working two days a week under the government's new 'work for the dole' provisions, could receive overcompensation of at least $100/week. For progressives, this would be 'making the most of a bad situation.'
Other full-pensioners, (disability, carers, aged pensioners), whose financial situation is not necessarily so dire as that of the unemployed, could receive overcompensation starting at $25/week. Single Parents also deserve a significant extension of benefits.
And all such increases should be fully indexed on top of existing formulae.
Although, improvement for Disability and Carers pensions and associated services, could also be achieved via a National Disability Insurance Scheme, which would have Labor seen as 'moving onto the policy front foot.'
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Providing such reform for Disability Pensioners and Carers separately, would enable proportionately greater carbon tax-related compensation for other low to middle income groups, making the carbon tax 'easier to sell.'
But on social justice grounds, Gillard's Labor would still have to provide for Disability Pensioners and Carers separately, via a National Disability Insurance Scheme (NDIS) well before the end of the current term. Labor needs a positive message to re-engage with voters, and a NDIS could be crucial here.
The Greens and Independents especially need to make the most of their leverage over Labor, to promote this reasonable and achieveable social justice agenda.
Here's hoping that conservative forces fail in their strategy of attempting to 'deprive the climate and carbon tax debate of oxygen,' manipulating voters through distraction and focus on trivalities. The issues are just too important to be engaging in these kind of cynical games.
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