One last plea for justice and compassion

The argument for an increase in the base rate of all pensions: and an easing of means tests for those on meagre incomes is strong. Critically here there also needs to be additional assistance for the most vulnerable of all.

The Combined Pensioners and Superannuants Association (CPSA) has argued for a tightly focused assistance package for the 1.5 million pensioners surviving on full rate pensions. The CPSA’s proposal covers aged, disability and carers' pensioners. Such a measure, according to CPSA, would cost about $3.2 billion: minimal in the “big picture” of the Federal Budget.

The CPSA has also suggested the needs of sole parents be seen to - and has criticised the absence of their needs from the Pension Review.

Prime Minsiter Kevin Rudd, however, is proving to have insufficient flexibility in the face of the financial crisis. Still he is insisting that taxes remain steady - not increasing as a proportion of GDP. Furthermore his suggestion that $2 billion for aged pension reform is “a truckload of money” is deceptive when that amount is considered in the context of an economy in excess of $1 trillion.

When the Greens suggested a $30 a week increase to pensions my immediate reaction was that surely such reform is insufficient to lift vulnerable Australians out of poverty, and keep pace with a cost-of-living “spiraling out of control”.

This remains the case - even if the Greens have taken a less equivocal position than Labor.

It is most important that we have formulae for calculating all pensions, which automatically adjust according to the cost-of-living; and which lift all Australians out of poverty.

The current formula for aged, disability and carers' pensions is 25 per cent of Male Average Total Weekly Earnings (MATWE). Given cost-of-living pressures, it is reasonable to suppose that this ought to be lifted to at least 30 per cent of MATWE.

It is critical that such adjustment includes the unemployed - who cannot be blamed for the world recession, and the resulting fall in employment levels.

This would lift such pensions (at the full single rate) to about $17,537 a year: a significant improvement - but still short of the CPSA’s figure of $19,399 (which they calculate as being “low income”).

The Rudd Labor Government’s pension reform agenda must begin by addressing the needs of the most vulnerable: those struggling on the full pension rate with no other source of income.

The CPSA’s proposal for an $80 a week supplement for these people should be implemented by the Rudd Labor Government if it is serious about fairness. Thereafter, the government needs to provide a fair means-testing formula that provides enough for all pensioners - that they are raised out of poverty.