Pension changes would break Tony Abbott's election pledges, says Labor

http://www.theguardian.com/world/2014/apr/11/pension-changes-would-break-abbotts-election-pledges

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Labor says the Abbott government will be breaking a clear election promise if it uses the May budget to limit access to the pension, or alters the current indexation of the benefit.

Treasurer Joe Hockey has sent his clearest signal yet that the government is considering raising the pension age in the looming budget in an effort to put commonwealth finances on a more sustainable footing.

But the shadow families minister, Jenny Macklin, on Friday pointed to the numerous times before last September’s election that Tony Abbott had promised not to touch the pension.

“At the last election, Tony Abbott looked millions of pensioners in the eye and promised he would not cut their pensions. He is betraying the trust of pensioners who took him at his word,” Macklin said on Friday.

Labor in government adjusted indexation for the pension and raised the age to 67. That change is due to take effect in 2023.

Macklin said on Friday the government should allow that transition to proceed before changing the arrangements once again, particularly given its unequivocal statements pre-election that pensions would not be touched.

In making the case that an adjustment might be necessary, Hockey this week pointed to recent work from the International Monetary Fund suggesting that without reform, growth in the health and pension spend would mean an extra $93bn of government investment per annum by 2030.

But Macklin countered that growth in the pension spend was more sustainable in Australia than it was in many other countries.

“If [the government] cuts indexation, that could leave pensioners anything up to $1500 worse off,” Macklin said.