Federal Budget: Cost-of-living solutions for seniors

A recent National Seniors report found that 66% of older people were concerned about keeping up with the rising cost of living in the long-term, with 26% extremely concerned.

That is why we need a budget that provides direct relief coupled with longer-term policy reform to ensure our standard of living does not go backward.

National Seniors’ plan to address this, outlined in the Pre-Budget Submission 2024, is a suite of well-researched innovative policy recommendations that tells the government what you, our members, have been telling us over the past few years about how life for seniors and their families can be improved.

The Federal Budget will be announced on 14 May and this current budget cycle comes at a critical time for Australia. The pressure of rising living costs is being felt by all, including older people. The rapid increase in the cost of groceries, fuel, energy, rents, healthcare, and other essential items is stretching household budgets to the point of breaking.

Not everyone is feeling cost-of-living impacts equally. Our research found that cost-of-living pressures were being felt disproportionately by:

• Older people with low incomes
• Older renters
• Older people living in rural and remote areas
• Older people who are single
• Younger seniors (under 60).

Many older Australians on low, fixed incomes are especially doing it tough.

While rising interest rates can offer high returns for those with investments, fear of rising living costs will likely reduce consumer confidence and have negative impacts on the economy.

Our cost-of-living solutions for seniors cover fuel, energy, health, housing and aged care.

They include immediate relief for fuel and energy costs and continuing the deeming rate freeze to ensure pension payments and concessions are maintained in the short-term. We also recommend significant policy reforms to allow additional concessions and support to those most in need.

In the area of health, we argue for a formal Productivity Commission review of private health to identify ways to reduce premiums and out-of-pocket costs. We also argue for action on private health rebates for low-income earners to maintain and boost coverage. Additionally, we call for targeted support for dental care for those most in need.

In housing, we advocate for policy changes to support older people offering to house other older people, enable older people to downsize later in life, and boost financial support for struggling renters.

We continue to advocate for a targeted exemption from the Age Pension income test for care sector workers. We also want changes to Age Pension gifting rules to give seniors a greater incentive to make financial contributions to charities and younger generations.

Our recommendations will help to address cost-of-living pressures facing older people and their families and ensure they feel the government is in their corner.

You can read the full submission here, including the budget impact of our recommendations.

A significant focus of our budget submission is easing cost-of-living pressures.

Cost-of-living rebate

Cost of living is the number one issue facing Australians, particularly those on low incomes. A recent National Seniors survey of older Australians found that cost of living, including rising grocery and insurance costs, was the number one policy issue for seniors.

High inflation eats away at household budgets. Yet at the same time, inflation has contributed positively to the Federal Budget.

The government could deliver a rebate to households via electricity bill relief, as was provided to households in 2023. A base rebate could be provided to all households with a higher rebate to those most in need.

Cut fuel costs via the fuel excise

Automotive fuel has been one of the primary contributors to change in the Consumer Price Index (CPI) in recent times rising 7.9% in the 12 months to September 2023.

While the Australian Government has little control over the price of oil, it does control the taxes on the fuel we pump into our vehicles. It’s called the fuel excise and is a general revenue-raising tax for which motorists currently pay 49.6 cents for every litre of fuel they purchase — between one-quarter and one-third of the bowser price. The excise increases biannually in line with the CPI.

Rising fuel costs cause many everyday items to cost more.

To reduce the impact of rising fuel costs government should reduce the fuel excise by up to 20c per litre and consider pausing excise indexation while oil prices are high.