Supplement backdown ‘to save PM’s job’

Malcolm Turnbull has sought to shore up backbench support by promising the pensioner’s energy supplement to new recipients.

Mr Turnbull revealed the change yesterday. Picture: Kym Smith

Malcolm Turnbull has sought to shore-up backbench support by announcing his government will retain the pensioners’ energy supplement to ease the pain of higher power prices on the nation’s most vulnerable.

But the move sparked questions over his government’s political strategy, after the Prime Minister said the policy backflip had been planned since the May budget.

Labor campaigned heavily in last month’s Longman and Braddon by-elections on the government’s plan to strip the benefit from new recipients.

Liberal MP Craig Kelly, the chairman of the Coalition’s backbench energy committee, said the government should have announced the policy before the crucial polls, which delivered a vital boost to Bill Shorten.

“Obviously it would have helped in Longman and Braddon, to dispel Labor’s misleading scare campaign that every pensioner was going to have their energy supplement cut,” Mr Kelly said.

Mr Turnbull revealed the change yesterday, amid a fresh push by Peter Dutton to splinter away Mr Turnbull’s supporters with big-ticket promises to address rocketing energy prices.

In a press conference to announce his big-business tax cuts would be abandoned, Mr Turnbull revealed the $1.7 billion energy supplement would remain open to new recipients.

“It is absolutely clear to us that with the issue of energy prices being so prominent, we will not move to repeal the energy supplement,” he said. “Now, as you can imagine, this is not a rash decision. We have provided for that in the contingency reserve, so there is no adverse budget impact by that change in policy that I’m announcing now.”

The energy supplement — worth $14.10 a fortnight for singles and $10.60 a fortnight for a marriage couple — was introduced by Labor as compensation for the carbon tax, which was later abolished by the Abbott government.

Recent modelling by the Parliamentary Budget Office revealed about 592,000 age pensioners would miss out on extra cash by 2020-21, rising to more than 1.5 million in 2028-29, if it was abolished as planned.

Labor’s social service spokeswoman Linda Burney said the Turnbull government had been trying to get rid of the benefit for more than two years, and yesterday’s backdown “is only about saving his job”.