Andrews backs NSW’s call to mobilise ‘grey army’

Seniors and pensioners can fill vacancies in home care, hospitality and agriculture if the federal government removes financial penalties that occur as a result of work, Mr Kean says.

And Mr Andrews agrees.

The Victorian Premier met a retired former chef who gets several calls a week from struggling businesses asking him to work a shift or two, he said on Tuesday.

But the hospitality veteran, who has 40 years’ experience to offer, can’t oblige as it would result in him and his wife losing $150 from their pension.

“He wants to work … in what is a magnificent industry, one that employs so many people and is critical to our visitor economy and to the way we’re viewed around the world,” Mr Andrews said.

“I don’t reckon we can afford the luxury of saying, ‘No, you can’t work, we’ll lock you out’, while we’ve got such post-COVID skill shortages in every single industry.

“The notion that we’re penalising people, or keeping them out of the workforce, while every industry is begging for staff, it just doesn’t make any sense to me.”

Federal Treasurer Jim Chalmers has said he has considered policy changes, such as lifting the pension income test, but that it must be weighed up against the cost of effectively increasing the national welfare bill.

“Ideally people would, if they wanted to, work an extra day or two. They can currently earn up to 490 bucks a fortnight before their pension is affected,” Mr Chalmers told ABC.

“[But] we’ve also got to weigh up the costs of doing something like this, which is essentially making the pension available for people who are working more and more. And so that comes at a cost too.”

Mr Kean supports a push to lift the income level at which pensioners get taxed, arguing that many older citizens would work if they did not face the threat of losing their benefits.

He said the federal government could consider offering pensioners an income-tax break or could reconsider the rate at which they get taxed.

The call comes ahead of Thursday’s national Jobs and Skills Summit where the federal government will discuss increasing the number of skilled migrant visas and other measures to tackle critical skills shortages.

“We have a grey army of workers who want to get out there and work, but there is no incentive to do so,” Mr Kean told the Financial Review.

Single pensioners taking home the maximum pension receive $987.60 a fortnight. This rises to $1488.80 for a couple. Pensioners can earn up to $490 per fortnight without their pension being affected. But they can lose 50¢ for each dollar they earn over that threshhold each fortnight.

In Australia, only 76,000 of the 2.6 million people on the age pension do any paid work, largely as a result of financial disincentives. This equates to about 3 per cent of aged pensioners.

But in New Zealand, where pensioners are not penalised for employment income, about a quarter of all individuals aged over 65 are engaged in some form of employment. Mr Kean reasons that if Australia had a participation rate of over-65s similar to that of New Zealand, it would result in an additional 450,000 available workers.