Deal or No Deal on Pensions?

The agreement between the Greens and the Coalition on the aged pension has drawn a bit of silly commentary. I don’t have strong feelings about the legislation myself, but I do strongly object to the way in which every instance of negotiation over legislation is portrayed as some sort of shady deal, and the crazy idea that somehow this means the Greens have sold out.

What is it about?

The Greens have a fact sheet here. Basically, the Government wants to make savings on the pension, they initially planned to effectly cut it across the board by tinkering with indexation. Instead, the Greens have agreed to support a bill that reduces the threshold at which the part pension cuts out which winds back changes made by the Howard Government to give wealthy people part pensions. On the other hand, at the other end the threshold at which a full pension is reduced has been lifted, so people with some modest savings can still get support form the pension.

Overall this seems pretty sensible to me, the Greens would do much more (including raising the full pension) if they could, but they are not in Government and don’t get to make policy. Note that the Greens do point out that “This is an outcome that stakeholders including the Council of the Ageing, Uniting Care and ACOSS have been seeking for a long time”.

Wasn’t it some sort of deal?

The “deal” in as much as there is one is basically an agreement over this legislation, though in addition the Greens have requested a review into retirement incomes as part of the Tax White Paper. It has been wrongly portrayed as the Greens agreeing to legislation to get something in return, which the Liberals won’t even do anyway. This is ridiculous when you consider that the point of the legislation is to undo changes the Greens have opposed since 2007. The legislation is something they want, and in addition they are getting a review, it isn’t an exchange. Quite clearly the Government will not change tax on super regardless of the outcome of the review – this is known by the Greens, but it will allow evidence to be collected that may still be used at some future point. It’s not much but it puts an important issue on the agenda, and is the best that could be hoped for right now – and remember.

There is no point just opposing everything

Some people are not happy because they want the Greens to oppose everything from the Government. Some even seem to think this will magically give them a new election – this is a misunderstanding (partly based by organisations like March in March wrongly promoting the idea that we could easily get a new election) – there is essentially no way of getting a new election without the Government calling it, the events of 1975 were quite exceptional and are unlikely to be repeated. The fact is that a Government has been voted in and they will govern for a full term or less if they choose. As a Greens member I expect the Greens parliamentarians to hold them to account, but also to support any legislation they agree with. In this case it appears to be the hole the Liberals have dug for themselves by loudly declaring a budget emergency (which does not actually exist), which makes them keen enough to claw back some savings to actually take back pensions from wealthy people.

Labor’s Role

Labor are opposing the legislation – perhaps partly opposition for the sake of it (after all, reducing handouts to the rich would seem like something they would otherwise support), or more likely, given that they frequently vote with the Liberals anyway (e.g. Data Retention) they see it as an opportunity to have a go at the Greens. Thus they have played it up as some sort of grubby deal, and claim the Greens are naive because the Liberals won’t hold up their end of the bargain – but a moment’s thought sees this narrative collapse completely, there is no bargain because the Greens are not giving anything up, they are voting for something they support.

See also an article by Peter Martin on why the change is a good one that Labor would normally support and speculation on why they haven’t. He thinks Labor were still hoping for some sort of concession of taxation of Super, I think the Greens were right in thinking that the current Government isn’t going down that road.