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Monday, 10 September 1984
Page: 737

Senator Sir JOHN CARRICK(8.44) —The Senate is debating the Social Security and Repatriation (Budget Measures and Assets Test) Bill 1984. Normally such a piece of legislation would direct itself to the benefit of the family, to helping the single income family, the mother with children. It would allow a striving family to persist and to overcome the problems which it faced. Senator Lewis very rightly pointed out that this was the hub of any social security test or measure. The fact is that the Bill completely ignores such matters. It could be said with truth that it is another tombstone, indeed a very large tombstone, in the graveyard of Labor's broken promises. Let me examine that. There is still some kind of illusion that the Hawke Government keeps its promises, that the Prime Minister, Mr Hawke, is someone whose words can be trusted. The fact is that any search of the policy speech and the statements made by Labor in a bid to gain office in March of last year will show dozens upon dozens of broken promises. Today there is a cynical disregard by the Hawke Government and by the Prime Minister in particular for the public and a disregard for the amorality of the broken promises.

Let me look at this situation as it affects pensioners. It has been alleged, and incredibly so, that this Budget is beneficial to pensioners. No government in the history of Federation, that I can recollect, has done more to destroy the basic security, the basic ability to plan, of the aged. No government has thrown into insecurity more people in Australia. One of the great things that Australia should strive to do is to enable people, as they approach retiring age and as they plan their retirement, to say: 'These are the immutables. These are the things that will not vary. We will depend upon governments to keep these things in place because if they don't the whole basis on which we have planned our retirement and our family support will collapse'. That is the test. What happened? The Australian Labor Party went to the people and said: 'We will not disturb the social security situation. You people who are over 70 and getting a non-means tested pension should not worry. Don't worry; you will be safe'. Those people had planned along that basis. They had disposed of their assets and made their lifestyle to fit this promise. What happened? The Labor Government was no sooner in office than in the mini-Budget it abolished the existing system, and 52,000 people, who were formerly pensioners, lost their pension. Is this evidence of keeping promises by the Hawke Government? Is this the kind of Prime Minister whom one can trust in the next round of policy speeches?

The Prime Minister is eager to have an election soon. His eagerness must be diminishing as the environment around him gets a little colder. He will be going to people and making a string of promises. The biggest question the community will be asking is: 'You said to us that your Government, of all governments, would run its full course. You said it was the absolute moral duty of governments to run their full course for three years. Why is it that you are running 20 months instead of 36 months?' Of course, the answer the Prime Minister will not give is that he is running scared; that he has cards up his sleeve for after the election which are not in this Budget. The mechanism that is put in this Budget will not be put into place to work before the election. He will wait until after the election. These are the tests which we must make.

In terms of ordinary people, let us look at the Government's promise and performance. A total of 52,000 aged pensioners aged 70 years and over lost their pensions. A great number of those pensioners would have voted for him because they believed they would keep them. It was made perfectly clear by Mr Hawke personally that there would be no attack on the means test. He said: 'That is not the way to do it. There are other ways'. But now in the second or third version of an assets test which we have before us what an attack there is. An assets test is to be established. I will examine that in a minute or two. Mr Hawke said: 'Put us in and in our term of government we will raise the base pension to 25 per cent of the average weekly wage'. Of course, he has not done that. His alibi is that the Government has not been in for three years, but that is of its own choosing. The Government is not staying in office for three years because it knows privately that it will not do these things if, by any mischance , it is re-elected.

Mr Hawke said that a Labor government would lift the tax base so that pensioners who moved towards a higher rate of taxation, through inflation, would not be taxed. That has not been fully done. This is a fundamental test of Labor. Here is a government that came to power promising people that they could plan for their future, plan for their families and dispose of their assets as they wished, without any fear. What has been created now is gross insecurity and uncertainty. Never whilst a Labor government is in power will any retired person with any certainly be able to say: 'I have done these things which are providing me with a basic income and I can depend that they will do so in the future', because the Government has shown that that is not so.

Let me refer to the simplest of all the confidence tricks because the community must understand what has been done with regard to Medicare and the consumer price index. We have what is called a CPI-a consumer price index-and a statistician works out what has happened to prices. Labor has said that inflation has fallen drastically and therefore it has to raise pensions only marginally, if at all. But the fact is that the CPI has been artificially dropped by 2.6 per cent. I emphasise that prices have not fallen at all. The prices that every one of us must pay for everything that we buy-for all goods and services-have not fallen at all. Medicare is a direct tax and private health insurance is an indirect tax. The Government has said: 'If you take it out of your pocket and pay by way of private insurance we will recognise it and it will provide 2.6 per cent of the CPI. However, if we, the Government, force you to pay a Medibank levy-we take it out of your wages, not out of your private pocket -it will not be included in the consumer price index and the effect will be that we will pretend, and everybody will pretend, that the inflation rate has gone down by 2.6 per cent'. Even proponents of the thimble and pea trick would not try that kind of nonsense. Of course, do not forget that it also affects the average weekly wage. Wages will not go up because the 2.6 per cent figure is an artificial reduction. The Government boasts that the inflation rate is about 7 per cent but on the ordinary score it is at least 9.6 per cent.

Nothing has happened to change prices; prices are the same but wages and pensions are not keeping pace because they are fixed to a formula. Any government that can hold back that fact from the people is a government from which one must withdraw one's confidence. That was an incredible piece of audacity and, of course, it is now underlying the whole of the Government's framework. When the Government pretends that it has moved up the pension a notch or two towards 25 per cent of average weekly earnings, it does not say that the average weekly wage is held down by the same 2.6 per cent. In fact, it has done nothing of the sort and it is an illusion.

When we look at the whole Budget and this Bill, one thing appears certain: There is nothing for the family unit-a man, his wife and children. Above all, there is nothing for the single income earner in the Budget. One would think that if this were a government for the family there would be some increase in the dependent spouse allowance. Inflation has gone up by about 9 per cent to 10 per cent in real terms and the dependent spouse allowance, by remaining stable, has been devalued, as has the Australian dollar at this moment by the magic of the float-another piece of independent genius.

Senator Robert Ray —Do you disagree with it?

Senator Sir JOHN CARRICK —I ask the interjector whether he disagrees with what I am saying about broken promises. Listen to the silence. That, of course, is the most eloquent of answers. Where is there any increase in family allowances, which provide support for children, formerly known as child endowment? Inflation has gone up to 9 per cent or 10 per cent and existing family allowances have been devalued.

The situation is much more insidious than that. This Budget is really the final piece of three attempts-the mini-Budget of May last year, the Budget of August last year and this Budget. Do not make any mistake about this: The overall robbery from taxpayers by the action taken in the mini-Budget means that another $2,000m was taken in for this year. That figure is the Government's figure, as set out in the mini-Budget, and not mine. It took in $2,000m more; and that is why it now has a bolstering of its revenue. But what kind of government is it that can do that and give nothing to the pensioners, nothing to wives and families and nothing towards family allowances? In a recession, when families are suffering badly and there is unemployment, there needs to be a bit of humanity.

Let us look at what is happening in regard to an assets test. Last year in the August Budget or thereabouts the Government said: 'We are bringing in an assets test. We are renewing an assets test. We will stop all those wicked people double dipping. We will not allow them to do that and we will take tens of millions of dollars from them and give it to the poor because the needy need it' . That is brave stuff. Indeed, if it is done, it is good stuff in terms of giving to the needy. But let us see what else the Government said. Ministers said: 'What we are thinking of is about $200m to $300m of savings'. The Minister for Social Security (Senator Grimes) in this place is on record as saying: 'It will affect something less than 400,000 people'. Let us get that straight. There are about two million pensioners and the Hawke Government was quite happy and complacent in taking away or reducing the pensions of 400,000 pensioners, which is a huge proportion.

Of course, the Opposition in this place pursued that assets test, showed it to be the nonsense that it was and to be utterly ridiculous and inequitable, a thing that would not solve the problem, a thing that would allow people to fiddle the till and get away with it and a thing that would punish honest people . Indeed, the Prime Minister, Mr Hawke, had to admit in public that his Government had been wrong. He set up the Gruen Panel of Review of Proposed Income and Assets Test, which was supposed to provide a solution. The Gruen panel's first action was to say: 'The basis upon which this Government is arguing is quite wrong'. The Government was arguing that it had to do something about the growing cost of social security because in the decades ahead, as we go into the 1990s, the year 2000, the year 2010 and so on, the burden will rise and rise. The Gruen panel said that at least until the year 2030 or 2040 that would not be so because Australia is facing at the same time a falling birth rate and any increase in age pensions would be offset by all the costs of a child's education, adolescence and all of these things.

So down went the first dolly. The Gruen panel said that the basis of the Government's argument was wrong. The Gruen panel wanted to include the family home in the assets test. We, the Opposition, showed the terrible injustice of that proposal. The Government panicked and has altered it. Now, because the Government is within a few months of an election that should not be happening- and maybe it will receive a surprise in regard to it-it has retreated for the moment. It is setting up in this Bill a large mechanism. There was talk of 1,500 extra employees. I think the Minister has said there will be 300 administering the scheme in the longer term and about $30m will be put aside to implement the scheme at its base. So it is meant to be a very large scheme. Therefore, one must believe that its aim is to deal with and achieve benefit for the Government from a very large number of people-something like the 400,000 that the Government talked about before, and the $200m to $300m that it talked about before. There is the incredible situation that the costs and the income under this Budget will virtually equate. There will not be any gain. There will not be money to take and give to the most needy at the other end of the scale. Even for the years ahead nothing like that is evident.

What is the Government doing? Quite clearly, it has said that this assets test is designed for one purpose, and that is to stop double dipping. It is to get very considerable sums of money from one end of the pensioner scale and to use it wholly or partially for those at the other end. If one were to apply more money to the other end of the scale, to the very poor, one could not argue with that. There is no doubt that there is a real need in Australia to look to the really poor. I commend the Government for its aid to single parents and others living in rented premises. There can be nothing more desolate and impoverished than the poor, who are battling with children or living alone in rented premises . Most of the aged and most of the pensioners are supported in some way by families. Either they have a house or their relatives take them in, and they can , of course, have considerable benefits; but the person alone who is not being helped by anyone is the main target, and I commend the Government for some minor help in that regard.

Two things are said about this legislation: On the one hand, it will yield big money somewhere in the future; secondly, we senators in the Opposition are wrong to say that the assets of all pensioners will be open to scrutiny. The Government says: 'Oh, no, we will not put people into the pensioners' homes'. It is trying to say that nobody has any need to fear scrutiny. That is an argument to the nth degree of the ridiculous. If it is said that this scheme is going to be an honour scheme-that is, that people are honour bound to tell the truth, and if they do not tell the truth no punishment will come to them-that is nonsense. The whole basis of the Hawke Government's approach is that those who do not deserve to get the pension will not get it. The Government cannot have it both ways. According to the Government's view-it is not my view-those who do not deserve to get a pension can make any statement they like regarding their assets , but they will not get the money. That cannot be true. In any case, I think the Government is resting on the basis-I would be interested to be corrected by the Minister in due course-that it has not got the power, under this Bill, to enter homes. If anyone believes that is a total power, he has not heard of the powers of the Commissioner of Taxation or the powers under the basic Social Services Act to inspect bank accounts, assets outside the home, holiday homes, to go through municipal councils' records to trace people's assets in the ordinary way that can be done. So nobody should believe that there is no threat. The aged who have made plans and disposed of their incomes can never be sure, while Labor is in power, that they will ever be safe.

Let us test that theory, because the Labor Party is talking about helping the poor. One of the most insidious things it did in the previous Budget was that, whilst failing to index direct taxes, it indexed indirect taxes and excise. Let us look at the sort of mind that does that. The way to help people is to index taxes so they are not pushed from the 36c level to the 46c level when they do not deserve it. That would be equitable, but did the Government do that? Not on your life! This new Budget has pushed tens of thousands of people into the 46c bracket. The Government said: 'We are not going to face the odium at every Budget of pushing up the price of beer, cigarettes and petrol, the small amenities of the ordinary person, the retired person. We will get away with it by very snide means. We will index those things once and they will be indexed forever'. The Government has indexed excises. It is not good enough to index taxes to stop them going up. It has said: 'Let us index excises so we will get more and more money.' So the Government takes that money from everybody, including the very poor, yet it says it does not have the money to increase pensions. Clearly the Government has created an illusion of an increase in pensions. If one takes account of the 2.6 per cent Medicare levy-that has been admitted by the Government-it is obvious that the pensioners have been robbed of a very significant increase.

Let me look at what happened in the past. The Fraser Government removed the property test in 1975-76 because it realised the impossibility of getting a test that would work with equity. It realised also that the best way to create wealth in this country for everybody is to encourage voluntary providence, for everybody to become little capitalists if they can, to save if they can, and to take their money and dispose of it in the way they want to. That, after all, is Australianism to the backbone. It is the right of any Australian to work hard, to save, to take that money and to use it in any way he wishes-to give it to his kids, to pay off the mortgage, or to leave it in his will. That is the fundamental right of every Australian. Yet there is a double test on this. There is to be a most horrible tax-indeed, something like 31 per cent-on lump sum superannuation. So everybody who has been planning with the certainty that that would never happen-2.2 million Australians-now face a completely different situation.

All of those who thought there would be no property test have found suddenly that there is one. It is an impossibility. When the pension was introduced it became clear that more and more people would be able to get a pension, that it would become more and more like a basic superannuation. By the time it had run its full course, something like 89 per cent-almost the whole community-of all people who were eligible by age for a pension were getting one. That was the express desire of the Australian people. There is no way that any government can wind back the clock. To do so on this, however much one might think, in simplicity, that one can save a bit of money in one area and transfer it to the more needy, is to cause more and more inequities on the journey. Every family has a different problem. Every retired person has a different range of responsibilities and things to do with this money-keeping other people, helping out their families, doing all sorts of things that are part of living. If the Government is going to destroy the ability of retired people to do this, it is destroying their very spirit. Once their independence, their striving, their right to feel dignified and secure is destroyed, their spirit and their reason to live are destroyed.

We, as a government, having looked at this situation, came to the conclusion that that was an impossibility. What we have said is quite clear: When we are returned to government we will repeal this legislation before us today. We made that quite clear today. I repeat: If a government is carrying out the will of the electorate, that government must direct itself to measures that support the family, the man, his wife and children, measures that will bolster the standard of living of families, whether they consist of working wives or mothers struggling at home. A government should give more support through family allowances and dependent spouse allowances that will help but not hinder. This Bill has done the very reverse. It has done more than that. It has revealed to the Australian people something that every one of the two million pensioners must understand, that is, that whatever promises the Hawke Labor Government may give, they are not worth the breath that articulated them.

The fact is that all the promises on this matter that were made by the Hawke Labor Party and by Mr Hawke prior to the election have been broken since then. With a Labor Government in office, aged people and those planning for retirement face the fact that they can never be sure of their future. They can never be sure that they have done the right thing. They can be sure of only one thing- that the Government is determined to chase any savings they have, to seek out any providence they have and to stop them from doing the kinds of things they want to do. When a government does that to Australia, it destroys basic Australianism and it deserves to lose office.