Isra-Mart srl: Self-funded retirees 'collateral damage' under carbon tax

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A significant group of older Australians are worried they could become collateral damage under the Labor Government's carbon tax.

Details of the compensation package so far revealed by PM Julia Gillard and Treasurer Wayne Swan have referred to a "battlers' buffer" in the form of increased pension and welfare payments plus tax cuts for low and middle-income earners. But what of those already struggling to meet increased living costs on fixed incomes, who do not receive a pension and pay little or no tax?

They know the costs of food, transport, housing and a raft of manufactured goods will rise further under a carbon tax or emissions trading scheme, because that is the flow-on effect a price on carbon dioxide emissions will have. It is why the Government is attempting to make the controversial plan more palatable by giving sneak peeks at the compensation package while details of the actual carbon price, payments to households and trade-exposed industries are still being negotiated with the Greens and independents.

But, will self-funded retirees and some mature-age workers, particularly part-time employees who qualify for the seniors' tax offset, fall through the cracks, or have they just been overlooked by the spin doctors behind the sales pitch?

Hopefully, it's an oversight and it will soon be rectified so that this segment of the grey brigade who have paid tax throughout their working lives can at least look forward to the same measure of assistance offered to the other low and middle-income earners.

Ms Gillard has already been forced to back-pedal from her initial promise that 7 million Australian households won't be worse off under her carbon tax.

She had told ABC Television that "7 million Australian households won't see a cent lost through carbon pricing''.

In announcing the scope of assistance on Sunday, Ms Gillard said "the vast majority we assist actually won't pay any price because of the assistance that they receive".

But when questioned, her office was quick to point out she had meant to say that of the nine out of 10 households to receive assistance, the "vast majority" would not be out of pocket.

Treasurer Wayne Swan has also refused to say how many of the 7 million would be fully compensated via tax cuts or increased welfare payments.

Households earning more than $120,000 would receive limited or no compensation, with the compensation package aimed at low and middle-income households. A typical family with two children is considered low-income if the combined wage is less than $60,000. Those earning between $65,000 and $160,000 are deemed middle income.

Meanwhile at least one Federal MP has taken up the cause for independent retirees and older workers.

Based in Gladstone, the central Queensland mining and major manufacturing centre now also playing host to the multi-billion dollar liquified natural gas industry, the LNP Member for Flynn, Ken O'Dowd has called for an assurance that this significant group will not be forgotten.

"I challenge the Prime Minister or the Federal Treasurer to confirm they will not be overlooked," he said in a media release this week.

"Julia Gillard and Wayne Swan have referred to a 'battlers' buffer' for pensioners and low to middle income earners, but what about the many self-funded retirees who don't receive a pension or pay tax?" Mr O'Dowd asked.

"There are many throughout the Flynn electorate who are worried about the impact of the carbon tax and whether they will be forgotten."

Tax cuts or small pension increases would not help these people who faced rising living costs which would keep on rising under a carbon tax.

"Labor used to stand for workers and working families, but no more. Their carbon tax will send Aussie jobs offshore and force up food and petrol prices, plus other household bills," Mr O'Dowd said.

Many workers in the electorate's major mining and aluminium industries, whose jobs were most at risk, would also be ineligible for compensation. He said his electorate was at "Ground Zero" in terms of the carbon tax because it stood to lose most with the threat to thousands of jobs in the aluminium, coal, and cement industries.

"The cost of living is already very high here and unless older residents are all compensated under any carbon tax, many will be forced to leave – some are already leaving," he said. It's a compelling argument which would also apply in other parts of Australia, so hopefully his challenge will soon be answered and these people will be able to sleep a little easier.