End of the free ride

June 16, 2014
over 60 always out

The federal government’s decision to slash $1.3 billion over four years from state-based pensioner and seniors concessions has caused an understandable furore. A lot of age and disability pensioners, as well as sole parent and carer pensioners desperately need those concessions on public transport, council rates, energy, water bills, and vehicle registration. But frankly I hope the savage cut spurs state governments into reviewing their concessions policies. A lot of people who get concessions don’t need them. I’m talking about well-off retired and semi-retired seniors who qualify for the Seniors Card upon turning 60. For example, why should I be able to travel all day on public transport in Sydney for $2.50 just because I’ve passed my 60th birthday and work part-time while unemployed people on the Newstart Allowance must pay full fare? And that includes unemployed people in their 50s.

Why should self-funded retirees too young or wealthy to qualify for the Age Pension be subsidised by the taxpayer to get out and about? The aim of the NSW Seniors Card when it was introduced in 1992 was: “to encourage older people to enjoy an active and healthy retirement.” But the 60 to 64 year-old retirees of my acquaintance don’t really need the inducement of the $2.50 all-day transport pass to bus it to the Sydney Writers’ Festival or catch the train to the Opera House – though of course they love their Seniors Card. When they’re not exploring Sydney they’re trekking the 200 km pilgrim’s trail in Spain, climbing to the Everest base camp, or taking a cruise to the Antarctic (a 10 per cent discount for seniors). Hasn’t the government heard that 60 is the new 30? And that quite a few 60-year-olds and indeed 70-year-olds are well off?

In some states, a generous array of concessions on government charges is offered to people once they turn 60 and retire or cut back their work hours to part-time. And no means test or asset test applies. State museums, art galleries,  parks, and zoos offer senior discounts. WA, for example, which prides itself in having a Seniors Card scheme that is “one of the most generous in Australia,” gives seniors, regardless of income or assets, an annual cost of living rebate worth $163 for singles and $245 for couples; as well as free off-peak travel, energy and water bill rebates, and up to 50 per cent off their council rates. They can also get up to $200 for a “personal safety device”. In all, the available state concessions were worth around $1450 a year. Go west, retiree.

Many older people really need these concessions: about 14 per cent of people on the Age Pension are considered to be living in poverty; and much higher proportions of those on the other pensions are also in dire financial straits: disability pensioners (42 per cent in poverty), sole parent pensioners (45 per cent). So there’s no excusing the federal government for ripping away the small amount of help it gives states to run the discount scheme for Pensioner Concession Card holders – the groups most likely to need relief from big bills and transport costs. But the states’ concessions schemes reach beyond these groups.

So far the Queensland state government, reversing its original decision, has decided to make up the $54 million shortfall for the coming financial year though it doesn’t know where the money will come from. And the NSW government has also announced it would make up a $107 million shortfall over the next financial year with a view to further negotiation with the commonwealth. Good luck with that.

It would seem reform and targeting of state concessions is inevitable given the severe constraints on State government budgets. And it would seem sensible to start with eligibility for the Seniors Card. At the least, lifting the eligibility age to 65 to qualify for government concessions is worth considering. This is already the case in Queensland. A separate card in Queensland is issued to eligible 60-64 year-olds to gain seniors discounts from private businesses. What business wants to offer seniors is up to business and doesn’t affect state coffers (though I wish they’d be more generous to the unemployed). State governments could take it a step further and apply a means test for the Seniors Card. Not only might non-pensioners be excluded but even some people on a part Age Pension given generous pension eligibility rules mean couples with super of $1 million can qualify.

It’s hard to know whether these restrictions on the Seniors Card would produce meaningful savings for governments. In NSW transport concessions alone will cost more than $176 million next year but how much goes to subsidising younger or well-off retirees is hard to disentangle. Also, it’s unclear whether governments would be prepared to wear the flak. In NSW, for example, the government regularly uses its Senior Card data base to communicate with 1.2 million over-60s by mail and on-line, a handy PR tool.

The Seniors Card is like a drug – once you try it you’re hooked. But after the high comes the guilt. If the savings to the public purse prove worthwhile, then put an end to our trip.

What’s your view? Do seniors deserve discounts because of their age? Please Comment but this week there may be a delay in your comments going online.

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