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Monday, 16 March 2009
Page: 2711

Mr MORRISON (7:34 PM) —When it comes to the debate concerning self-funded retirees, independent retirees, clearly the government just does not get it—and clearly they did not get it when they were in opposition either. The issue here is a question of recognition, a question of acknowledgement, for people who have worked hard and made sacrifices all of their lives and provided for their retirement. They have asked for nothing over that time. But in their advancing years, when they are continuing to make contributions to our communities and support their families, the government’s answer is basically to give them a kick in the guts. The government’s answer is to bring forward a bill—at a time like this—which seeks to ‘disacknowledge’ an incredibly important and valuable section of our community.

The Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009 will introduce changes to the adjusted taxable income test for the Commonwealth seniors health card. It seeks to include in that income test income from a superannuation stream with a taxed source and also income being salary sacrificed to superannuation. The change will apply to Commonwealth seniors health cards issued under the Social Security Act and the Veterans’ Entitlements Act. Currently the income thresholds applying to the seniors health card are $50,000 for singles and $80,000 for couples. These changes to the way eligibility is assessed will push up to 22,000 seniors over the income limit and strip them of their Commonwealth seniors health card. Some 22,000 Australians—some of whom, I am sure, will be listening to this debate tonight—are about to have one of the few things provided to them, in return for their decades of work and a lifetime of sacrifice, stripped away by a government that considers itself compassionate and acknowledging of the services of older Australians.

This amendment to the rules governing access to the Commonwealth seniors health card was announced by the Treasurer in the May budget. At the time, he claimed that these changes would realise savings of around $85 million over the four years of the forward estimates. That is the 30 pieces of silver for the betrayal of self-funded retirees that is presented in this bill.

The Commonwealth seniors health card provides access to concessional pharmaceuticals under the Pharmaceutical Benefits Scheme. It allows bulk-billed GP appointments and access to a range of discounted healthcare services. The Commonwealth seniors health card is available to Australian resi-dents who are of age pension age and who qualify because their income is below the relevant threshold limit. The current income thresholds are not indexed, although they can be increased at the discretion of the government. In 1999 the Howard government changed the income test limits for the Commonwealth seniors health card to criteria based on taxable income. At the time, the reason given for the change was to allow more self-funded retirees to access pharmaceutical concessions. The Howard government also increased the income threshold in 2001. The current income thresholds have applied since that time.

I heard an earlier speaker say that he considered it is a somewhat generous arrangement that is provided—that there is some act of generosity, that somehow there is something undeserved about these concessions that are provided to independent retirees. According to those speaking opposite, this is some undeserved payment that is just handed over, and Commonwealth seniors health card recipients who are independent retirees should be grovelling in thanks for the meagre things provided to them. Quite differently, the Howard government saw support for self-funded retirees as an appropriate acknowledgement. It is an insufficient one, frankly, but it is a very important acknowledgement. The measures in this bill seek to strip that away, to remove that all-important acknowledgement.

These changes will hurt a lot of self-funded retirees. These people have set aside a part of their income all their working lives in order to provide for their own retirement. After all, isn’t that what we are trying to encourage in this country? Aren’t we trying to encourage people to stand on their own two feet? Aren’t we trying to encourage them to be self-sufficient, whether it is in their housing, their employment, starting businesses, providing for their family or supporting their communities? Aren’t we trying to send a message to those outside this place whom we represent to say: ‘If you do the hard yards, if you do the work and provide for yourself, then we will acknowledge that. We will value that as a great service not only to you, your family and your wellbeing but to this country’? But you will not find that acknowledgement in this bill, Mr Deputy Speaker.

These people are not wealthy. There is some bizarre view among those opposite that the people who will be subject to these changes are driving around in flash cars and taking long, extended overseas trips and somehow we need to rob from the rich to pay the poor. You find that theme through all of what we are seeing from this government—outdated class warfare and ideological battles, which simply have no place in considering a measure such as this. ‘We need to rob from those incredibly wealthy self-funded retirees who have all their money tied up in investments. They’re doing pretty well, so we should slug them so we can pay for our spending sprees, our cash splashes, our payments that are being sprayed all around the country.’ Who is going to pay for those cash splashes? In this bill, self-funded retirees are going to pay for them. These are everyday self-funded retirees who have prudently planned for their own retirement. I repeat: they are not wealthy; they are just looking for some support and acknowledgement of the costs that they face as they move into their advancing years.

These changes will force many self-funded retirees to lose their card from 1 July of this year. The impact of these changes will be significant for many of my constituents. I have been contacted by many of them in the past few weeks as they have become aware of this bill. They are worried, and for good reason. Representations made to me by my constituents state that retirement savings will be depleted at a faster rate due to increased medical expenses as a result of the card being stripped away from them. Others have told me that many senior citizens require many more prescription drugs to retain a reasonable standard of wellbeing. One constituent told me that his wife required $130 worth of medication a month before she was granted access to this card.

Denying seniors these savings on medicines could have detrimental consequences. Many self-funded retirees in my electorate have concluded that they and others in their position will be disadvantaged when the Treasurer withdraws their right to the card this year. There are 3,277 Commonwealth seniors health card holders in my electorate of Cook, in Sydney’s Sutherland shire. That is the sixth-highest number in the 150 electorates represented in this place. I would say to you, Mr Deputy Speaker, that self-funded retirees—along with the two million small businesses that we now have in this country, courtesy of the economic policies of the Howard government—are the new forgotten people of the Rudd government. They are not acknowledged, have become invisible and have simply slipped off the radar.

Let us think about some of the benefits that they will be denied as a result of this measure—and they will be proactively denied them. This is not an unintended consequence of this bill. The government knows that 22,000 self-funded retirees, who have worked hard all their lives, are going to be denied these benefits. That is the purpose. It is to strip benefits away from these people. They will lose pharmaceuticals obtained under the PBS, currently costing Commonwealth seniors health card holders $5 per prescription. After those people lose their cards, these same medicines will cost them around $31.30 for each script. Cardholders also benefit from the PBS safety net with the Commonwealth seniors health card. Seniors reach the safety net when they pay a total of $290 for prescriptions. After that point is reached, prescriptions are free. Without a Commonwealth seniors health card, the safety net rises to $1,141 and a fee of $5 per script applies. Seniors with a Commonwealth seniors health card receive the benefit of the seniors concession allowance, currently amounting to $500, to assist with the payment of essential services for which pensioners are granted concessions. After 1 July, many seniors will lose this.

Seniors in possession of the Commonwealth seniors health card are also eligible for an $88 per annum telephone allowance for their home phone service. Many self-funded retirees will no longer be eligible for this allowance. There are also concessions offered by state governments and local governments to holders of the Commonwealth seniors health card, and those affected by these measures will be denied those benefits. That is the design and the purpose of this scheme.

This bill would be bad enough in good times, but in times such as these, with the losses that independent retirees have faced, they are, frankly, inexcusable by this government. Many of those self-funded retirees have seen the value of their retirement savings significantly decline due to the effects of the global economic downturn and more specifically the economic downturn here in Australia, and because of measures pursued by the current government. Superannuation funds have reported significant losses during 2008 and even now in 2009. Many self-funded retirees are going back to work. After working all of their lives for their retirement, because of the impact on their incomes as a result of the losses sustained to their investments, they are now going back to work. That is what we saw in the unemployment figures released last week. We saw an increase in the participation rate not for good reasons, not for reasons produced by good policy, but for reasons produced by the need for self-funded retirees to go back to work. After working their entire lives and finally being able to realise that dream of spending time at home with their families, pursuing their interests, supporting their community and doing all the things that they had denied themselves for their entire lifetime, they are now going back to work because of the conditions we are now faced with.

These self-funded retirees are hurting and this government is not acknowledging that hurt in this bill. Many suffered when the Rudd government imposed its unlimited bank deposit guarantee, the bungled guarantee, because the fund managers froze their investments. I remember standing in one of the many retirement villages in my electorate hearing story after story of people whose funds were frozen simply because this government could not get its act together on the bank guarantee. In their haste and their bungling and their misunderstanding they rushed through a measure, one of the most immediate consequences of which was to freeze the retirement savings of independent retirees. Two hundred and seventy thousand of them had their funds frozen as a result of the bungled decision of this government, and we saw a stampede from investment funds to other places as a result of that ill-considered and ill-timed measure.

The ill-conceived decision by the Rudd government has affected tens of thousands of everyday Australians. What did the Treasurer have to say? I think the Treasurer’s sentiment is also reflected in this bill. When he was confronted by these 270,000 Australians who had had their funds frozen as a result of his and the Prime Minister’s bungling, the Treasurer said, ‘If they needed help they should go and line up at Centrelink.’ That is the answer. He has no conception that these Australians have spent their entire lives in ensuring that they should never have to line up at Centrelink. That has been why they have worked so hard, because they have felt they should carry their own burden and try to carry the burden of as many other people as they possibly can, particularly in their own circle, within their own family and certainly in their own community. So it is wrong for a Treasurer to now say to them after all these years: ‘You know what? Why don’t you just go and line up at Centrelink? Why don’t you go and do the thing that you have worked your entire life to not have to do?’ His comment on that was equivalent to that quip which I think will live in the minds of most who have an interest in politics in this country when the then Prime Minister, Paul Keating, said to them, while unemployment skyrocketed, ‘Go and get a job.’ That is what he had to say, and this is what the Treasurer is now saying: ‘Go and line up at Centrelink. Yes, I know your investments are frozen and I was responsible for that. I know that your retirement savings have been depleted as a result of this economic downturn. But go and line up at Centrelink; just get in the line.’ These people worked hard not to get in that line and what they are looking for is an acknowledgement of their situation and not to be forgotten by this government.

Other self-funded retirees have had their savings tied up in shares and other equities and have found, in addition to the declining value of their portfolio, that the income stream derived from dividends has also dried up. Blue-chip companies have announced that their dividends will be reduced, and many self-funded retirees are heavily reliant on dividends from their investments for income. The average super fund lost 6.6 per cent in November 2008 and losses continued in 2009, losing a further two per cent in value in January. The value of the median fund fell by 16.2 per cent in the first seven months of the 2008-09 financial year. Australian super funds have lost $160 billion since the start of the global economic downturn. Figures published in the Weekend Australian in early January showed that 2.3 million retirees were 20 per cent poorer than they were a year earlier. One trillion dollars has been wiped off the value of Australian shares in the 12 months between November 2007 and November 2008. The Australian Stock Exchange closed at 3,244 points on 11 March 2009, which was 2,111 points down since March 2008.

This is all about recognition and it is all about an acceptance of the plight being faced by independent retirees. We have a government that is quite prepared to splash cash around with no thought of the consequences for the burden of debt it is going to impose on future generations. We are at $200 billion and counting. We are yet to face a budget with this government going through the current economic storm and the consequences that have been wreaked upon our economy because of their decisions. We are going to see that budget in May, and let us watch the debt skyrocket then. This will be a terrible thing. One of the groups that have been most affected and forgotten in the midst of all this by this government is independent retirees. The Association of Independent Retirees said that the economic downturn is starting to bite heavily in the living standards of many self-funded retirees. Their president, Theresa Kot, said in December, ‘With interest rates plummeting and the value of investments in free fall, self-funded retirees are alarmed to watch their efforts over the years in building an asset base to secure their retirement continue to dissipate with no relief yet in sight.’ Not only is there no relief but there will be a big kick coming from this government on 1 July. There is no relief, but a further burden is going to come onto them as this measure takes effect. Taking away the Commonwealth seniors health card from many of these self-funded retirees will only add further worry and anxiety to the lives of these Australians, who frankly do not deserve it.

In May, following the announcement of the government’s budget, the Association of Independent Retirees said it had no idea how many self-funded retirees would be disenfranchised by this decision. We now know that the number is well over 20,000. It called for the eligibility threshold for the seniors health card to be adjusted upward to an appropriate level—we heard from an earlier speaker that he thought it should be further revised downwards—but the government has ignored this request.

The coalition has a strong tradition of giving support to older Australians. It kept faith with those who contributed so much to the building of our country. The coalition improved eligibility for Australian government concession cards to reach a point where more than 85 per cent of people over age pension age qualified for a health card, a Commonwealth seniors health card or a pensioner concession card. That was a proud boast of the coalition government when it was in office. We delivered. We delivered for independent retirees, and I will tell you why we delivered for them: because we get it. We understand it. We understand their sacrifice. We understand their contribution.

The sacrifices and contributions of independent retirees, at least in my mind, are summarised by a constituent who came to see me the other day. This is a bloke who built his house in the forties in Como. He lived in a tent with his wife for seven years while he built his house. He worked in his own businesses over the course of his life, and he set himself up for his own retirement. That story is repeated many, many times around this country. It is a story of sacrifice. It is a story of commitment. It is a story of perseverance and dedication. These are stories we should be celebrating and acknowledging in this place, but in this bill we are not doing that. In this bill, we are treating these great Australians as undeserving, as overcompensated and as people who, frankly, do not warrant even our thought, let alone our support. So I ask the government to seriously reconsider this measure. Self-funded retirees do not deserve it. They deserve greater respect, greater recognition and greater acknowledgement, particularly in these economic tough times. They should no longer be the forgotten people within Australia under this government.