28 September 2009
ABC PM

MARK COLVIN: It's the battle of the Premiers versus the pensioners.

The Federal Government is fighting a rearguard action to stop the States keeping for themselves up to a quarter of the recent increase in the aged pension.

The fight centres on the rent paid by pensioners who live in public housing.

It normally increases along with the pension, because it's calculated as a percentage of tenants' income.

The States and Territories say they've agreed to a 12-month holiday for this latest pension increase, which they say is a good deal for public housing tenants.

But as Shane McLeod reports, that's not enough for the Federal Government, which wants pensioners to keep their increased income for as long as possible.

Shane McLeod reports.

SHANE MCLEOD: Pensioners around inner city Waterloo in Sydney today were circumspect about what the increase in public housing rent will mean for them.

Most have just received their first pension payment reflecting the increase in the Pension announced in this year's Federal Budget.

News they'll soon be paying more for their public housing, comes as no surprise.

FEMALE PENSIONER: It's not much, it's about $5 they increase, but they increase very often for one year for example, three, four times they increase.

SHANE MCLEOD: Public housing rents are generally calculated as a percentage of tenants' income. It's usually up to 25 per cent, which the New South Wales Housing Minister David Borger says for those living in public housing is a fair calculation.

DAVID BORGER: More than 90 per cent of residents in public housing don't earn a market income, don't work for a living, they're on some sort of pension or benefit. Now this is obviously a difficult issue, I obviously sympathise with pensions. It's never going to be easy on a pension.

But equally, it's much harder for those people that are paying high private rents; as I said a one bedroom unit in Parramatta $280 a week, a public housing dwelling, it's less than $80 a week.

SHANE MCLEOD: Normally as pensions increase, so does the amount of rent paid but the most recent increase awaited so long by pensioners, is the subject of a special moratorium.

It won't be added into the calculations for at least a year and the Federal Families, Housing and Communities Services Minister Jenny Macklin says the Federal Government would like it to be held off even longer.

JENNY MACKLIN: We want to make sure that pensioners in public housing get the full value of this pension rise and from my point of view it is totally unacceptable that the states are only allowing the full value of the pension rise to go for a year.

SHANE MCLEOD: Jenny Macklin, speaking on AM this morning.

But the states don't want to hold off any longer.

New South Wales' David Borger says it's worth $12 million for state coffers; money that could be spent on more housing.

DAVID BORGER: At this stage all States, bar one, intend to charge rent on the additional $30 in 12 months time. For the first 12 months no rent will be charged, after 12 months it will be charged and that money will be put towards building housing for single pensioners who are struggling in the private rental market.

SHANE MCLEOD: The Queensland Premier Anna Bligh is discussing the terms of the deal with the Federal Government on behalf of all the States.

She also believes the moratorium is a fair deal, even if the money that will eventually be paid in rent goes to other purposes.

ANNA BLIGH: They'll get a 12 month holiday from any increase, but ultimately, living in public housing means people still have to pay rent and the 25 per cent of their income will remain the same as it always has been.

SHANE MCLEOD: Public housing advocates say the longer the States can hold off, the better.

Maree O'Halloran from the Welfare Rights Centre in Sydney says the Federal Government has made special considerations for other pension recipients.

MAREE O'HALLORAN: The Federal Government reset the formula so that people living in nursing homes and hostels and aged care residents don't have to pay as much of their aged pension over and got to keep more of this $30. If that's possible to do, then I know it's possible for the state governments to reset their formula as well.

SHANE MCLEOD: Jenny Macklin says suggestions the extra rent will be spent on more housing are beside the point.

JENNY MACKLIN: Well the Australian Government has just provided around $6 billion in additional funding to enable the States to build around 19,000 new units of public housing. This increase is for pensioners and should be allowed to flow through to pensioners, not be taken up by rent.

SHANE MCLEOD: Pensioners, as always, will be making the most of their newly increased income before the States start to get some of it back.

MARK COLVIN: Shane McLeod.

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This transcript has been posted by The National Tenant Support Network (National TSN) is an independent, unincorporated not-for-profit initiative delivering a range of services to social and affordable rental housing stakeholders throughout Australia and New Zealand.