Treasury urged State Govt against pensioner rate concessions
UPDATED: The Weatherill Government was advised against subsidising council rates for the most vulnerable even before the Federal Government decided to remove $30 million in state pension concessions.
The revelation comes as the administration today relented to effectively continue funding eligible concessions for council rates, increasing payments and re-targeting eligibility criteria in a move that will hit the state budget’s bottom line when it is handed down next month.
A 2012 Treasury briefing to then-Treasurer Jack Snelling, obtained by InDaily, emphasised that “the need for State Government to provide a concession on council rates is questionable”.
The note was intended to school up the Treasurer ahead of a meeting with then-president of the Local Government Association Kym McHugh, who was seeking increases in State Government funding for pensioner concessions on council rates.
The $190 annual concession has not been increased since 2001-02, when it was raised from $150 a year.
The LGA wanted the Government to index annual increases.
But the briefing, authored by then-Acting Assistant Under Treasurer Stuart Hocking, instead urged the Government to consider removing the concession altogether, given “individual councils have the ability to provide a concession on their council rates”.
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“As councils are responsible for setting the rates in their respective jurisdiction, they are arguably the most appropriately placed to deliver concessions,” Hocking wrote.
“The level of concession could then be tailored to the level of rates applied in their local area, and the needs and demands of their respective residents.”
The revelation comes, however, as the Weatherill Government concedes defeat in its stoush with the Abbott Government, after the Coalition last year scrapped $30 million in annual funding for non-specific pensioner concessions.
Premier Jay Weatherill and now-Treasurer Tom Koutsantonis today consented to a new “Cost Of Living” Concession to replace the $190 rates concession, which they say “only provided funding to pensioners, low-income earners and self-funded retirees who owned their own home”.
The new scheme will be expanded to eligible tenants, and increased to $200 for eligible pensioners and retained at $100 for eligible self-funded retirees.
However, self-funded retirees earning more than $51,500 for a single or $82,400 for a couple will not be eligible.
As InDaily forecast, that’s consistent with a 2011 Centre for Economic Studies review, which noted that the existing concession for self-funded retirees was “poorly targeted”, with qualifying households already earning more than the average South Australian income.
The Cost Of Living concession will cost the State Government $36.5 million, up from the current scheme’s $34 million per year.
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“This State Government will always fight for and protect our most vulnerable citizens,” Weatherill said.
“As a result of this reform, more South Australian pensioners will be better off.”
The new concession will be payable per household, with payments for the 2015-16 financial year to be made by cheque, expected to be distributed to homeowners in “about September” and to tenants “by early 2016”.
Tenants will need to apply by October 31, however homeowners who currently receive the council rate concession need not re-apply.
“Unlike the Abbott Government this State Government keeps its election promises to pensioners,” said Koutsantonis.
The 2012 Treasury briefing was obtained under Freedom of Information by Greens MLC Mark Parnell in 2012, although it was not relevant to his inquiry at the time.
Parnell told InDaily the Greens “weren’t prepared to be party to SA pensioners being the meat in the sandwich in a political dispute between the state and federal governments”.
“Neither of the old parties have covered themselves in glory over this,” he said.
“Tony Abbott has made cuts to the most needy in two consecutive budgets, but the State Government’s not being entirely honest.”
He said it appeared the state had wanted “for some years to get rid of this concession”, and it’s “fairly clear they’ve taken the opportunity to blame someone else for something they were very likely to do themselves anyway”.
McHugh, who last year retired as Mayor of Alexandrina, told InDaily he recalled the meeting with Snelling, wherein the LGA sought a concession increase and the Treasurer “wasn’t interested, basically”.
“At the time there hadn’t been an increase or indexation for 11 years … he intimated that the Government weren’t interested in any indexation or increases,” McHugh said.
“My recollection is the Government’s view was if they were going to increase help to pensioners, it would be through rebates on utilities.”
He said the SA State Government “supports councils less than any other state does, as far as subsidies, grants and the rest of it goes”, so “I don’t think we’re better placed than the state to give that rebate”.
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