Federal Election 2019: Clive Palmer’s plan to increase age pension would leave $1 trillion budget hole

Potential political kingmaker Clive Palmer would blow a $1 trillion hole in the federal budget in a decade from just one controversial policy, exclusive modelling has revealed.

Potential political kingmaker Clive Palmer would blow a $1 trillion hole in the federal budget in a decade from just one controversial policy, exclusive modelling has revealed.

Financial analysis, conducted for News Corp Australia, shows a massive budget hit by 2030 from the United Australia Party’s pitch boost to the weekly age pension by $150.

Under the policy, pensioners would receive an extra $7800 a year while singles would have $1143 a fortnight and couples $1871 every two weeks.

But funding the age pension would cost taxpayers an extra $302 billion over 11 years, according to modelling by Australian National University researchers.

The total age pension cost would hit $1017.2 billion — or $1 trillion — by 2030, the modelling reveals.

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United Australia Party leader Clive Palmer wants to increase the weekly age pension. Picture: AAP

Welfare and seniors groups dismissed Mr Palmer’s policy as too expensive and simplistic, arguing a $75 a week boost to the Newstart payment for jobseekers was more urgent.

The UAP leader has emerged as a potential kingmaker in a swathe of marginal seats across the country after a Newspoll showed he was polling 8 per cent on average across four key electorates.

The embattled Queensland billionaire, 65, is in talks about a preference deal with the Liberal Party that could all but guarantee him a Senate seat.

The modelling, by ANU’s Centre for Social Research and Methods, shows UAP’s plan would increase the cost of the age pension by $21 billion in its first year, taking the total cost to almost $70 billion in 2019-20.

The extra cost would then spike to $35.7 billion a year by 2030 as more people became eligible for the pension, taking the total cost that year to $123.1 billion.

A $75 a week boost to the Newstart payment for jobseekers would be better, say welfare groups.

A party spokesman last night refused to say if it had modelling on the policy’s potential cost.

He said it would push, if elected, to raise the age pension by $150 a week per person, to be indexed at CPI over future years.

“It will cost the government $150 per pensioner per week,” he said.

The few other policies announced by the UAP to date include a pledge to abolish the Murray Darling Basin Plan and a promise to launch 20 per cent tax breaks for Australians living more than 200km outside capital cities.

Other policies, listed on the party’s website, include revising the government’s refugee policy “ to ensure Australia is protected and refugees are given opportunities for a better future and lifestyle” and that party officials should not be lobbyists.

A Labor spokesman criticised UAP’s advertising splurge.

“Instead of spending $30 million on an advertising blitz to help him return to parliament, Clive Palmer should pay the entitlements to the 787 workers who were sacked from his Townsville-based nickel refinery,” he said.

Seniors groups say $2 billion a year to get rid of the waiting list for home care packages is more crucial.

Labor has previously pledged to review all welfare payments within 18 months if it wins the election.

A Coalition campaign spokesman said the party “has no plans to review the age pension”.

Council on the Ageing Australia chief executive Ian Yates said all parties spoke to his organisation about such policies but “Palmer United hasn’t, or whatever he’s called these days”.

“We certainly wouldn’t oppose some increase in the pension but we would like to see Newstart increase because the largest blocks of people on Newstart for long periods of time are mature-age workers,” he said.

Extra rental assistance for seniors or $2 billion a year to get rid of the waiting list for home care packages was more crucial, he said.

Australian Council of Social Service chief executive Cassandra Goldie agreed the “most urgent and effective step” to reduce poverty in Australia, particularly for people aged 55 to 64, was to increase the rate of Newstart.

Originally published as Federal Election 2019: Clive Palmer’s plan to increase age pension would leave $1 trillion budget hole