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Thursday, 21 March 1985
Page: 591


Senator COLLARD(4.52) — We are debating the Social Security and Repatriation (Abolition of Assets Test) Bill brought forward by my colleague, Senator Messner. Since I have been in parliament, no one thing has so galvanised the community as the assets test. We are getting calls from concerned constituents all the time. It is a matter of great discussion among people in the community, particularly those approaching retirement. At one stage people used to look forward to retirement after a lifetime of work. They now look to retirement in a rather terrified manner. They are quite concerned about what is likely to happen to them. Any kind of assets or incomes test, by its very nature, is discriminatory. The assets test is proving itself to be more discriminatory every day. Senator Messner, in his second reading speech, and Senator Walters in her contribution, have indicated that this is so. The assets test is also unworkable. That is being brought to light every day. It will not be long before people start to make other arrangements. We then get to the stage in which the assets test is of not much use.

As Senator Messner has said, instead of encouraging people to rely on government we should encourage them to make other arrangements for their retirement. All the things that helped to make this country great-hard work, pride in workmanship, thrift and initiative-should be encouraged. Instead, people will have to think twice about whether they go down that track. What point is there for them to do that? Why should they put away money, work hard and branch out if, when they reach retirement and look forward to the security that most other people in the community have, they will be denied such security? Why would anybody work hard and put money aside? It must be accepted that in their lifetime they have probably contributed more to this country in many ways, not the least of which would be their taxation payments, than they would ever hope to recoup in the remainder of their life by receiving a pension.

The assets test is discriminatory. It discriminates particularly against small businessmen and farmers. The Australian Labor Party still does not understand the rural sector. It has proved that time and again, but no more so than with the assets test. It does not understand what it is like to be assets rich and income poor. That does not seem to get through to the ALP, yet such conditions prevail, particularly in the rural community. Senator Messner, in his second reading speech, brought up the anomaly of the farmer whose property is unable to generate income sufficient to support him and his spouse in retirement and their son or daughter and his or her family who have been working on the property for little remuneration. The plan is usually that the son or daughter will take over the property and continue its operation. They are usually unable to afford payments to the parents because of the low rate of return on such properties. That is not unusual. Because of the deprivation provisions of the legislation, the parents are unable to qualify for the pension and legally transfer the farm to the children, which is usually the only practical action to be taken.

The Government provides the infamous pensions loans scheme or, as it has become affectionately known, the pay as you die scheme. This allows pensioners in this situation or with other illiquid assets to borrow the pension with interest of 13.5 per cent during the lifetime against the security charge being applied to the farm. In the best of circumstances, an example of which Senator Messner quoted, and assuming a life in retirement of 15 years, this could build up to a debt of $400,000. It could become a considerable problem for the inheritor to refinance, probably causing the eventual sale of the property and the destruction of the intention to maintain the family farm operation. In that circumstance the security charge becomes a quasi death duty, does it not?

Let us consider the diabolical bind in which the farmer finds himself if he has transferred the legal ownership of the property to the children. Not only is he caught by the deprivation provisions of the assets test; because he no longer is able to effect a charge on a property owned by his children, but he also is unable to qualify for the pension loans scheme. His only resort is to seek a pension under the hardship provisions about which Senator Grimes talked. However, if he finds that his assets are in excess of $5,000, a modest savings account, he will not be eligible under that provision either. As Senator Messner said, there is probably no cleverer three-way attack on farmers yet devised by the Government than this.

Concern has already been expressed by Senator Walters about the valuation of home and farm and about how it is arrived at. The Prime Minister (Mr Hawke), in his policy speech of 13 November 1984, said:

And I give four unequivocal commitments about the assets test:

The first is that they will never see social security inspectors in their homes.

He gave three other commitments that are not relevant to this argument. He gave the unequivocal commitment that pensioners would never see social security inspectors in their homes. I do not know how a phone call would be viewed, but we are getting many complaints about the phone calls from people who will not identify themselves but ask questions. Those who are aware of what is going on ask who is speaking and find out that it is an officer of the Department of Social Security. If it came to a fine point of law, it could not be said that social security inspectors had entered pensioners' homes, but such phone calls negate the intent of the Prime Minister's promise. There certainly seems to have been a change overall in the modus operandi. The Minister for Community Services (Senator Grimes) in a news release put out on 26 September 1984, said:

Let me again make it quite clear that there will be no home inspections.

The valuers whose services we use will be working to the Social Security Act, not the Tax Act.

On 6 November 1984, in reference to Mr Peacock, the Minister said:

He knows that, under the Social Security Act, public servants are not permitted to enter pensioners' homes without their permission.

That rule applies now and will continue to apply after the election.

Under the assets test, I state categorically that 'there will be no entering of pensioner's homes to value, or check valuations, of their personal effects and household contents. The assets test form does not even ask for details of such items'.

He continued:

I also guarantee that valuers from the Taxation Office will not be entering pensioners' homes without their permission.

A new aspect has entered this argument. It was stated on 26 September that valuers would be acting only under the Social Security Act. Now it is said that valuers from the Taxation Office will not be entering pensioners' homes without their permission-a complete departure from the original proposal which also indicates that taxation valuers have entered into the argument. There is now no entry without permission and there are tax inspectors, all in addition to the unequivocal commitment of the Prime Minister. Now the Minister for Veterans' Affairs (Senator Gietzelt) and the Minister for Social Security (Mr Howe) are quoted in the Press as asking for visits of tax officers. So, the longer the assets test runs, the worse it becomes for those who are unfortunately finding themselves involved.

In the southern States-it does not pertain so much in Queensland-we have many soldier settler farms. That is a different story which I shall discuss shortly. We have this idea of taxation inspectors and the 'drive past' method of valuation. As I understand it, a lot of these soldier settler farmers in Victoria and in New South Wales are on irrigated land and a drive past valuation cannot possibly take into consideration water rights which are an essential part of the valuation of these properties. We have quite a departure from the original commitment. I do not know whether Social Security inspectors are entering homes at this stage, with or without permission, but they are certainly making phone calls and tax inspectors are on the job. We also have three types of valuation-valuations for local government rate purposes, valuations provided by local valuers, and tax inspectors, unbeknown to the people owning the properties, driving past and making valuations without any discussions with the owners as to who owns what on the property, what equipment is leased and what is on hire purchase, and without even worrying about the water rights.

A lot of these places are soldier settler farms. Those ex-servicemen who have assets have made a double contribution to this country, a contribution that we all accept. They have been prepared to bear arms in the defence of this country. Some have gone overseas and have paid a greater price than a lot of us will ever be asked to pay. On top of that they have come back and worked hard to build up their assets for their future and the future of their families. They have made a double contribution and they are getting hit again. My colleague Senator Messner and I put out a joint release some time ago saying that at least World War I veterans should be absolved from the assets test completely.

Senator Grimes cited the rorts going on. The Opposition will not say that there are no rorts. How can we? There are rorts in every aspect of society. If we get down to the lower levels-if we want to put it that way-the wage earners, there are rorts in sick pay, in workers compensation and so on. Of course there are rorts, and I am not justifying them in any way. But the examples enunciated by Senator Grimes are extreme and the $100m which he is claiming the Government has gained certainly would not be coming from those people. It would be coming from the small businessmen, from the farmers and from the ex-servicemen who, in their own way, have been battlers just as much-or more so. They have worked harder and longer hours than probably any other section of the community and, in doing so, they have employed the greatest number of people in employment in this country. Let us not forget that major contribution they have made to this nation. The small businessman and the farmer employ the greatest number of people in this community. They have been very much battlers. They would not have got where they are or accumulated a few assets had they not battled damn hard, harder than most people in nine-to-five jobs will ever realise.

The attitude that Senator Grimes enunciated seems to be typical of the attitude of the Australian Labor Party in general: 'Nobody has any right to be successful and, if they are successful, let us get into them'. This country is on a downhill slide. Most thinking people accept that, yet this Government is crucifying the very section of the community that can get this country going again. It is a ridiculous attitude for the Government to take and, as I said earlier, it is completely discriminatory and unworkable and is proving more so. We have more and more public servants, a non-productive section of the community, tied up in looking at the assets test, seeing that it works, spying on people and so on. It is an abomination on this land, and I fully support the Bill that has been brought forward by my colleague Senator Messner.