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Tuesday, 6 September 1983
Page: 376


Mr CARLTON(3.47) —Mr Speaker, as you have said, the matter of public importance being raised today by the Opposition is:

The continuing attacks by the Government on the aged citizens of the Australian Community, causing them alarm, distress and hardship.

I did not have to look very far this morning in order to get a particular example of the distress that is being caused to the elderly in our community today. I did not look for a particularly odd example; I just picked the first letter that I happened to read this morning in the Sydney Morning Herald from a Mrs B. Marshall of The Entrance Road, Gosford. I think I should read this letter to the House. Mrs Marshall states:

The Herald (August 27) said that 10 per cent of the value of a second home is to be taken as income in the new pensions assets test.

I have a house let at $45 a week to good tenants of long standing. I pay $13 a week in rates and $2 insurance. Within the past two to three years I have laid out $3,500 for renewing drains and guttering, plus painting, and spent more than $400 on a new hot-water service last year.

I don't know the value, but it is a fairly nice house and few houses are worth less than $40,000. Ten per cent of this is roughly $80 a week, which is to be incorrectly counted as income, and I still have to pay out $15 a week for rates and insurance, not to mention $4,000 recently paid out. I can prove every one of these figures, if required.

I am not a big landlord, merely a widow who married again, and so have an extra house, but that is not the point. Actually, I have long wanted to sell, as it is such a poor proposition, but have not been able to bring myself to put the tenants out.

I would think that no properties make 10 per cent net, after rates and maintenance, loss of rent, damage, etc. The only reason landlords keep them is for some prospect of capital gain.

The old pensions test assumed two-thirds of rent as income, which was wildly overstated, but words fail the new one.

That is not a remarkable case of an elderly person, a pensioner, who is really distressed about the proposals by the Government to re-introduce an assets test on pensions. She is not a person who is well able to rearrange assets, not a person in the early part of her life who would find these things, although distressing, nonetheless possible to overcome. But this is just one of many examples of people who are currently absolutely terrified of what will come about as a result of the Government's assets test. They also have many months to stew over this matter before the final details will be resolved and the assets test is finally introduced some time next year.

The Opposition, originally when in government, eliminated the assets test on pensions for very good reasons. It was almost impossible to distinguish one case from another in an equitable way. People found it extraordinarily difficult to process the declarations by pensioners as to their assets. There was also the distressing situation where clerks in the Department of Social Security were trying to do their jobs as best they could in dealing with elderly people often approaching infirmity, and were trying to come to just decisions about the disposition of their assets. If a decision of that kind is made in all good faith by a clerk within the Department of Social Security one has to have appeal provisions to ensure that justice is done. For that reason in 1976 the Fraser Government removed the assets test on pensions.

I will take another example, using figures this time, of the comparison between two couples with quite different amounts of assets who would be treated, in the one case totally unfairly by the proposed assets test of the Government. Let us take a married pensioner couple with $267,500-worth of exempt assets as defined under the Government's proposals but without any income. That couple would be entitled to a total age pension of $7,139.60 a year. In addition, they would be entitled to full fringe benefits worth, say, $20 a week. This couple is certainly asset rich by any standards. This couple with total exempt assets worth over $267,000 has a maximum pension income. Let us take a poorer couple- again I am not taking an extreme case-with total assets of $112,000 but arranged in a different way without any particular regard to trying to avoid anything. Let us say that, under these proposals, those assets generate a notional income of $5,200 per annum. That couple would lose $1,300 per annum of their pension and they would not be entitled to any fringe benefits. There we have a comparison between a couple with well over $200,000-worth of assets on a full pension and fringe benefits and another couple with assets of $112,000, subject to a loss of $1,300 per annum of their pension and no fringe benefits.

Obviously people all over Australia at the moment are in fear as to what is to happen to them under this assets test. Their fear is very genuine; it is palpable. It is coming through into the electorate offices of every member in Australia. It is not something dreamed up by the Opposition; it is very real and very distressing. It is something that is happening to a segment of the population which, in many respects, is least able to alter its lifestyle and rearrange its affairs. Certainly, as those people become much older, more frail and infirm, it will represent a desperate situation for them.

The test will discriminate against people who have sold their houses, for whatever reasons, and have put their money into other assets-people, for example , who are in nursing homes. The most frail members of our population-those who have sold their homes-have assets which are in place of their homes. They are in nursing homes, perhaps hoping to come out some day. Nonetheless, those people would have their pensions removed. Whereas if, by the pure chance of life, they had remained in their original homes they would not be subject to this assets test. That kind of injustice is just unbelievable in this day and age. I refer also to farmers whose own home on the farm would not be exempt from the assets test. We would have a situation where, if a farmer sold a farm and invested in unproductive assets such as jewellery, paintings, works of art or whatever, which would be exempt assets under these proposals, he or she could get the pension, whereas if he or she held on to the farm then the pension would be gone . This is a terrible attack on the elderly of Australia. It is almost unbelievable.

The Opposition knows full well what some members of the Government really believe about this situation from the remarks that were made by the Minister for Foreign Affairs (Mr Hayden), then Leader of the Opposition, in March 1982, when he responded to a speech given by Sir Phillip Lynch where Sir Phillip canvassed these matters. I might say that Sir Phillip's proposals, or canvassings, were not accepted by the Government of the day. But the present Foreign Minister, then Leader of the Opposition, said:

Mr Fraser must immediately clarify his Government's policy on Sir Phillip Lynch 's proposed wealth test on pensioners. As they stand Sir Phillip's comments yesterday signal the Government's determination to end means test free pensions for people over seventy, and to reintroduce a means test on assets and savings for the rest of our 1.8 million pensioners.

He went on to say:

It's another kick in the teeth for aged and retiring citizens, as well as half a million widows, invalids and supporting parents. Already many aged people this year are being forced to pay income tax for the first time, because rising inflation is pushing their pensions above the taxation-free threshold. Now Sir Phillip Lynch is indicating the Government wants to go a step further by cutting off pensions to tens of thousands of people.

The next paragraph is very significant. Again I am quoting from what the Foreign Minister, the then Leader of the Opposition, had to say:

The argument about millionaires receiving pensions is a cruel and emotive device to cover up the Government's real intentions.


Mr Howard —Who was this?


Mr CARLTON —This is what the present Foreign Minister, the then Leader of the Opposition, had to say in March 1982.

He--

He is referring to Sir Phillip--

is using this argument to justify ripping the pension off ordinary people with modest savings they have worked for all their lives. What Sir Phillip Lynch is really proposing is a wealth test on all pensioners.

One member in this House who would very much remember those remarks would be the honourable member for Lowe (Mr Maher), because those remarks were made by the then Leader of the Opposition during the course of the Lowe by-election campaign . If any member of this House owes his election at least in part to those remarks made by the then Leader of the Opposition it would be the honourable member for Lowe. It would be a good idea if he were in the House at this moment to hear what is being said on behalf of the aged people of Australia.

The Prime Minister (Mr Hawke) also made a commitment during the election campaign when he said that a Labor government would 'not take money out of the pensioner's cheque'. That was the commitment of the present Prime Minister during the election campaign. What would the pensioners have expected as a result of that commitment? Would they have expected a dramatic increase in the tax on lump sum superannuation which they have got? Would they have expected, in the May statement, the income test on pensioners over 70? Would they have expected the assets test that has now been announced? Would they also have expected in the Budget no increase in the taxation threshold at the bottom end which will mean that, over the next 12 months, more pensioners will be paying tax? That was another matter that was referred to by the present Foreign Minister in his statement last year.

This is an unco-ordinated set of actions on the part of the Government. It is hurtful to this elderly section of the community in a most appalling way-those people least able to deal with it. It is obviously unco-ordinated because the Government's actions cancel each other out. The tax on lump sum superannuation payments is made redundant by the assets test. The application of the income test to those over 70 is overtaken by the assets test. Where is the co- ordination in these policies? There is none. There is also an attack on our armed services. If one is compelled to retire under armed services rules and is under 55, one pays 30 per cent tax on everything. If one is one day over 55, one pays only 15 per cent tax on the first $50,000. That matter still has not been resolved.

The Opposition is taking action in the Senate today. That action is designed to ensure that this matter is taken up by the Senate Standing Committee on Social Welfare. Existing retirement incomes systems will be looked at, with particular reference to any changes which may be necessary to ensure equitable and comprehensive income security for Australians of retirement age. I am informed that that action will be supported by the Australian Democrats and Senator Harradine. On re-election, the Opposition would repeal Labor's proposed assets test and superannuation legislation as part of a total, co-ordinated approach to retirement income policy. We will not stand by to see this Government create such uncertainty, hardship and distress to the elderly section of the community, those who are least able to rearrange their assets at their time of life.