How long can NSW state and local governments continue to offer pensioner concessions now that the Abbott Government has terminated the COAG National Partnership Agreement on Certain Concessions for Pensioners Concession Card and Seniors Card Holders

Abbott Government 2014-15 Budget Papers excerpt:

The National Partnership Agreement on Certain Concessions for Pensioners Concession Card and Seniors Card Holders states that:

the Commonwealth and the States and Territories (the States) recognise that they have a mutual interest in improving outcomes for Pensioner Concession Card holders and Seniors Card holders, and need to work together to achieve those outcomes.

and

There are two components to the Agreement:

(a) The first component relates to the Commonwealth’s contribution to the provision of certain concessions to pensioners. This dates from the 1993 agreement whereby the Commonwealth and the States agreed that certain concessions would be provided by the States to all Pension Concession Card holders without discrimination between cardholders, in return for indexed Commonwealth funding.

(b) The second component relates to the Commonwealth’s contribution to the provision by State governments of Designated Public Transport Concessions to all Australian Seniors Card holders using public transport services, irrespective of the Senior Card holder’s state of residence. This component commenced in 2008-09 as a Commonwealth initiative under the ‘Making Ends Meet’ plan for older Australians, people with disabilities and carers.

and

a) Certain concessions for Pensioner Concession Card holders means those rebates made available to all Pensioner Concession Card holders, regardless of payment rate or type, for local government rates including land, water and sewerage; energy; motor vehicle registration and public transport concessions. Public transport concessions must be provided to all Pensioner Concession Card holders regardless of their state of residence. This requirement does not apply to state-funded concessions provided to Pensioner Concession Card holders using long distance transport services.

(b) Designated public transport concessions to Seniors Card holders means concessions provided by State or Territory governments to out-of-state Seniors Card holders on the same basis as they are provided to resident Seniors Card holders, subject to any exclusions agreed in writing by the Commonwealth and the relevant State Portfolio Minister. [National Partnership Agreement on Certain Concessions for Pensioners Concession Card and Seniors Card Holders]

This COAG agreement was not due to expire until 30 June 2016. The agreement was worth about $99.9 million to New South Wales in 2012-13 and, as part of this funding is indexed it would possibly be worth more this year.

So what New South Wales pensioner concessions are involved?

In NSW pensioners are eligible for a concession of up to $250 on the combined ordinary rates and waste management charge applied by councils. However, councils are only reimbursed for 55% of the actual cost. [Comrie J, NSW Local Government Rating And Charging Systems And Practices, April 2013]

Pensioners who are owner/occupiers of the home in which they live may also be eligible for a rebate on water charges of up to $87.50 per annum [NSW Local Government Act 1993 - Sect 575]

Pensioners are also eligible for the Low Income Household Rebate which provides:

$225 (excluding GST) a year to eligible customers who hold an electricity account. This will increase to $235 on 1 July 2014; and

$247.50 a year to eligible long-term residents of caravan and mobile home parks and residents of retirement villages who receive electricity bills from village operators. This will increase to $258.50 on 1 July 2014. [NSW Trade & Investment, 2014]

Currently NSW pensioners are exempt from motor vehicle registration fees (including HVIS inspection fees) on one vehicle. [NSW Roads & Maritime Services, June 2013]

Bus and train travel concessional fares are available to pensioners living in New South Wales, including metropolitan Pensioner Excursion tickets and the $2.50 Country Pensioner Excursion ticket . [NSW Government, Transport for NSW, 15 April 2014]

Without on-going funding from the Federal Government, one has to wonder how long state and local governments will be able to continue to recognise all these existing pensioner concessions at their current levels.

UPDATE

The Daily Examiner 19 May 2014:

PENSIONER discounts for rates could knock more than half a million dollars off the Clarence Valley's bottom line over the next four years if measures in the Federal Budget are passed.

A council spokesman said the council offered rates and water rates subsidies to pensioners partially covered by federal and state government grants….

Council's corporate director Ashley Lindsay said the federal budget, if passed, would have an immediate and lasting impact on the finances of all councils, including the Clarence Valley.

He said the biggest impact was through the budget measure to pause annual increases for financial assistance grants, which have historically been indexed in line with the consumer price index and population growth.

He said that in 2013-14, the council received a total $10,240,000 in general purpose and roads grants from the Commonwealth Government.

"Based on the assumption of the CPI running at 2.5% a year from 2014-15 to 2017-18, the impact of this measure to pause the CPI indexation on the financial assistance grants will cost council about $1.063 million in reduced grant income over four years," he said.

He said another substantial impact on council's finances came from the Commonwealth's decision to remove a rate subsidy it provided pensioners and other concession card holders.

Council provides concession card holders with discounts on their general rates and on their water and sewer charges….

Under changes announced in the Federal Budget, the Commonwealth will drop its contribution to rate subsidies to concession card holders, meaning the council will need to increase its contribution to 50%.

In 2014-15 that is estimated to cost the Clarence Valley Council $121,582.

Over four years, the council would be out of pocket $504,688. Mr Lindsay said the re-introduction of indexation of fuel excises would further impact on council's finances.

He said a one cent a litre increase in diesel prices would add $11,600 to council's costs and a similar price rise for E10 prices would add another $2900 to the fuel bill.

Member for Page Chris Gulaptis said the big issues for the states was the loss of $80 billion for health and education.

"To be truthful I haven't considered things like the pensioner concessions," he said….