Opposition Leader Mark Latham has again demonstrated his policy weakness by making an $8 billion error in his pensions policy.
Mr Latham made the following commitment yesterday, both in his speech and in the accompanying policy document:
“Labor reaffirms its commitment to ensure the basic government aged pension does not fall below twenty five per cent of Male Average Weekly Ordinary Time Earnings.”
The current policy, legislated by the Coalition in 1997, is that pensions are linked to the higher of CPI or twenty five percent of Male Total Average Weekly Earnings (MTAWE).
MTAWE is the measure of earnings across the board including those in part time, casual and full time work. It is currently around $46,678 a year.
The wage measure referred to by Mr Latham, Male Average Weekly Ordinary Time Earnings, reflects the earning of a full time male worker working a standard 35 hour week. It is around $51,828 a year.
Applying Mr Latham’s 11 per cent higher wage measure to the age pension program of about $19 billion gives Labor a $2 billion gap to fill every year, or $8 billion over the forward estimates.
The $8 billion figure does not even include the implications for the $2.8 billion annual program of service pensions which are also linked to MTAWE.
A former Labor Treasurer was sacked for not knowing what GOS meant. His comments did not amount to an $8 billion promise.
Either Mr Latham does not know what MTAWE means, or he really is committing Labor to increase pension payments by $8 billion.
Which is it? Incompetence either way.