Carbon tax impact
Mark Butler dialled AAA this morning to assure the sector that not one aged care resident will be worse off after next July as a result of the carbon tax.
Above: Minister for Mental Health and Ageing, Mark Butler.
By Stephen Easton
Every aged care resident and provider will receive financial assistance to ensure they are no worse off after the carbon tax takes effect on 1 July next year, according to the Minister for Mental Health and Ageing, Mark Butler.
“No resident of an aged care facility will be any worse off and the providers will not be worse off either,” he told AAA this morning. “Every single pensioner, whether they’re on a full or part-pension, will get assistance equal to 100 per cent or more of the price-impact to them.”
Part of the government’s Household Assistance Package, the Clean Energy Supplement, will see maximum pension rates increase by 1.7 per cent, amounting to an annual increase of $338 for singles and $510 for couples.
With pensioners making up around 90 per cent of the total nursing home population, the maximum fee that approved providers can charge them will also increase, by “roughly one per cent”, to ensure that around half of the 1.7 per cent pension increase goes to the provider.
“The vast bulk of the price-impact will be through power and gas and that cost is obviously paid [to the power company] by the aged care facility,” Mr Butler said. “So that works for the 90 per cent of aged care residents who are on pensions.”
Mr Butler explained Treasury modelling had predicted the carbon tax would increase prices by 0.7 per cent overall, but that for pensioners living at home, their living expenses would rise by closer to 1.1 per cent, due to a larger-than-average share of those expenses going on electricity bills.
He also confirmed that the Seniors Supplement would mean Seniors Health Card holders would receive the exact same level of assistance as pensioners, and also benefit significantly from tax cuts and changes to the Senior Australians tax offset, which he said would be “rolled into one” with the Pensioners tax offset.
The upshot of this, he explained, was that “effectively, a single person over 65 won’t pay tax until they earn over $32,000”, when these measures take effect, at the same time as the general tax-free threshold is increased to $18,200.
A further $126.8 million in supplements will support existing arrangements between providers and residents who pay fees directly.
“That is for those residents who don’t receive either the pension increase or the Seniors Supplement,” Mr Butler said. “That’s less than 5 per cent [of the nursing home population] or thereabouts – so we will be paying facilities directly to compensate for the price-impact for those residents, so those residents aren’t worse off either.”
Industry reactions to “the traditional Labor way”
The leaders of several large not-for-profit aged and community care providers have issued unequivocally positive responses to the assistance package, including Anglicare, UnitingCare and the Brotherhood of St Laurence.
Patrick McClure AO, CEO of Aged and Community Services Australia, also threw his support behind the measures and said the package would provide a buffer against rising living expenses for older Australians.
“Our initial calculations based on the costs per resident, per day, shows that aged care providers should be able to meet additional costs resulting from the introduction of the carbon price,” Mr McClure said.
Minister Butler explained that the government’s climate change package was focused on preventing serious damage to both the planet and the Australian economy, while safeguarding agricultural production and access to clean water.
He also reiterated that Labor’s plan to cut carbon emissions would be carried out in “the traditional Labor way”.
“The traditional Labor way is to make sure people on low and middle incomes, aged pensions and disability pensions are not disadvantaged by this kind of major economic reform; that’s why the bulk of the assistance is to Australians on fixed, low and middle incomes,” Mr Butler said.
“People on high incomes will not be compensated for the price impact – so when we say ‘a Labor way’ we mean the money we spend assisting households will be spent on assisting low to middle income households.
“That’s more than half of the money that will be raised; the rest will go into developing clean or renewable energy and also assisting industries that are heavily trade-exposed … [because] they don’t have the capacity to push the price impact through to the market.”
How will this affect self funded retirees though? They have spend their working lives going without and planning for their retirement, and are not earning money, so therefore will not receive tax breaks. Why are we punishing the people who have been responsible and planned for their ageing years? Or are we happy to send a message that, until your money runs out, don’t call us? With many having had their nest egg reduced through the GFC, now they are seeing significant increases in their cost of living.
“while safeguarding agricultural production and access to clean water”
How are we protecting Agriculture- with Coal seam mining ? Selling off agricultural land to overseas interests ?
Still notice the Coal loading facility in Newcastle being expanded- and all those cargo ships lined up waiting- what are they carrying ?
Warrigal Care is very glad to see the governemnt recognise that older people, and the service providers who support them, are not able to bear the cost of these carbon reforms. Many older people have a very low carbon footprint already and are very used to using resources in a frugal way. They should not have to bear an equal share of these extra costs. Thank ye3163ou minister Butler, a sound move!
how can they have smiles on their faces and say they look after pensioners, six dollars ninety cents increase what a joke, that woundn,t pay for a pound of butter,these polotians dont have to worry on the wages they get. green julia gives herself a ninety thousand dollar increase and us a misely pinch.Give the goverment back to the liberals least they knew how to run a country.
I find in interesting that sole pensioners will get an extra $200 one off payment and then additional payments through the year. I am also a little paranoid why are they going to so much effort to push carbon tax through. Yes it will earn Australia a lot of Taxes, but who exactly gets the carbon tax, how is is going to be spent? According a google search I did a while ago, 10% of it is going to the UN? How are they going to spend it , are they accountable and to whom. I would like to know the answers to these questions!