Pension clawback unacceptable: Swan

Treasurer Wayne Swan has warned the states and territories that the federal
government will not tolerate attempts to claw back the increased aged-care pension
through higher public housing rents.
Some states plan to lift rents next year in a move that would take about a quarter
off a $30-a-week boost to the single pension.
"We had a pretty robust discussion about this issue," Mr Swan told reporters after a
meeting with his state and territory counterparts in Canberra on Friday.
"This pension increase has been hard-earned and hard-won by Australian pensioners
and there is simply no way the commonwealth will tolerate a clawback."
But some states are yet to be convinced, even though the proposed increases were far
bigger than normal indexation.
Mr Swan said some states agreed with the commonwealth's decision but some did not,
although he would not name the recalcitrant states.
He has previously slammed the NSW government after it refused to give in to
commonwealth demands and rescind its planned rent increases.
"Discussions will continue," Mr Swan said.
National Seniors Australia, which represents the interests of nearly 300,000 people
50 years and over, has questioned whether the practice amounts to price-fixing.
It wants the federal government to amend the Trade Practices Act to prohibit states
from fixing the rental price of public housing.
"The expected increases may amount to price fixing as the indications are that the
states have colluded on the terms of a proposed increase," chief executive Michael
O'Neill said in a statement.
However, there was good news for pensioners and low income families, as new data
suggested a very tame inflation environment thanks to the strength of the Australian
dollar.
These two social groups are typically the first to be hit by rising cost pressures.
Australian Bureau of Statistics' data showed import prices fell by a further 3.0 per
cent in the September quarter - dropping nearly 12 per cent in the past nine months
at the fastest pace on record.
"Given that the Aussie dollar has risen even higher over October, consumers can
expect plenty of savings in coming months," Commonwealth Securities (CommSec) chief
economist Craig James said.
The consumer price index for the September quarter is due for release next Wednesday.
It is expected to show inflation grew 0.9 per cent in the quarter and a slim 1.2 per
cent over the year - remaining well below the Reserve Bank of Australia's (RBA) two
to three per cent target range.
However, the more monetary policy sensitive annual measure of underlying inflation
is expected to remain stubbornly high at around 3.5 per cent.
ANZ economist Alex Joiner said that with inflation back in the RBA's sights the fall
in import prices was welcome news.
"The relatively strong Australian dollar going forward ... should help the downward
momentum in core inflation rate that has so far remained persistently high," Dr
Joiner said.
The RBA is expected to raise the cash rate again at its November board meeting, but
Friday's data suggests that it should be limited to a 25-basis-point increase.
But while the central bank is removing its monetary policy stimulus, the government
has been persistently criticised by the opposition for continuing with its stimulus
measures, as well as the quality of the spending conducted through the states.
Mr Swan defended the spending on social housing and school modernisation, saying it
was within guidelines and largely meeting the government's timeframes.
"And that's a good thing. Because that's why we're getting some of the economic
results that we're getting now," Mr Swan said.
"It remains important to recovery as we move through the rest of this year and
through next year."
But he said the treasurers agreed that more houses were needed to help boost the
economy and meet population growth.
"The commonwealth has this view that we have got to get ahead of the curve here," he
said.