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Wednesday, 29 April 1987
Page: 2214


Mr MacKELLAR(5.51) —As the Minister for Social Security (Mr Howe) has indicated, the Social Security Amendment Bill contains amendments to the Social Security Act. The amendments that we are looking at cover a very wide ambit: Changes to the reciprocal agreement with the United Kingdom and New Zealand; changes to the penalty provisions for security breaches; and alteration of appeal provisions for the assets test-amongst others. The entitlements affected concern the rate of unemployment, sickness benefits, veterans' entitlements, unemployment benefits and disability legislation. So this Bill does cover a very wide ambit.

Because the Bill does this we need to look at some of the more general questions-questions of a philosophical nature which underline the prominence and significance of the Act which is submitted here today for amendment. The huge outlays on social security have, in a very real sense, turned public attention to the need to seek limits to the presumption that the duty of modern government is to find more and more money to support more and more social security schemes. Whichever way we look at it, the administration of the schemes is a most costly and complex business. This legislation makes that clear. Oral decisions will no longer suffice. Administrative decisions will no longer suffice. Administrative decisions will be in writing unless recorded on a computer. That is correct but there certainly will be a testing of administrative quality as a consequence.

Paper work generates paper workers and increases the intensity of administrative activity. Probably for the first time in the history of our nation, the costs of the social security system have come under very broad-based criticisms. I do not believe that the Government has heeded the basic thrust of the concern so widely felt throughout the community. Too often, the critics have been met with the proposition that critical thinking is not motivated by compassion. Too often it has not been seen that the critics are recipients who have to deal at times with a very cumbersome administration.

The fact is that administration of this complex system is always going to be a problem. Changes in the rules for administrators basically will not deal with the thrust of the critique. Newspapers and the Government like to imagine that the critics draw their strength from the so-called dry economic theories. I have found that most people find it difficult to know what the media is talking about with its classifications of `dry' and `wet'. Those who indulge in the use of those labels never seek to explain them. So the Government makes sport with labels. In doing so, it is merely setting up smokescreens to draw public attention away from its own factional differences. Those divisions often reflect the same concerns on social security issues.

Honourable members on this side of the House are absolutely as one on the need to support our nation and the international security system. We are not compromised by having a section which supports Soviet policies at the expense of the United States. I point out to the House that that is the situation which characterises the Australian Labor Party. Nobody on any side of this Parliament would argue about the basic necessity of meeting human need, whether arising from old age, poor health, misfortune or even lack of forward thinking. The issue is to make judgments about the meeting of social security needs in a way which enables the nation to thrive and prosper in conditions which ensure the basic economic health of the nation.

Social welfare specialists, who spend their professional lives dealing with the problems of the disadvantaged, cannot be expected to do other than articulate the needs, anomalies and problems of individuals. Businessmen who are concerned with the viability of businesses and farmers in the business of making farms viable or facing problems of falling prices and higher costs, are not to be expected to carry the torch for defining the problems of social security. That is the business of government-getting the balance right between creating national incentives for people to be effective contributors to the national wealth and helping those who for whatever reason of misfortune or by unfortunate necessity are non-productive.

Income producers have a claim on government loyalty and government concern as much as the income spenders. Of course, the task of government is to bring about a practical balance between the two streams of interest. In this context of producing a better economic performance, there is considerable debate about the impact of the welfare system. It affects all nations in the Western world. Annexed to this legislation is a social security agreement with the United Kingdom and New Zealand. The agreement, which is a remarkable one, makes possible social security payments to residents of Australia, formerly resident in Britain, on a basis equal to the Australian beneficiary who has lived his life here. When the Australian dollar goes up and down the transfer payments are adjusted without disadvantage to the pensioner. It illustrates the general status of the social welfare system as an integral part of the democratic way of life.

No one challenges this arrangement but there is much debate about the point at which the costs of social security become so out of kilter with the capacity to pay. There is some real interest in this area. That capacity to pay is attested by the ease or difficulty which confronts governments in the taxation system. Taxes can be raised only from those in the national work force producing income. Their prosperity is a function of the vitality of the economic system. This is pretty obvious, on reflection. But we are all too ready to ignore the issue when examining the pro and con arguments. We tend to talk of welfare as something self-contained, when welfare spending is possible only because there are resourceful people working and earning income.

We have had very considerable debate about the processes of national economic management. A growing number of people take the view that national morale in income production is at a dangerously low ebb. It is in these circumstances that we look at the balance between welfare spending and the viability of the economy. Very considerable opinion argues that the economy under this Government has been made inefficient by the loss of incentives generated by the mistaken policies of the Government in handling the economy and in particular the taxation system.

The legislation before us attempts to tighten up on the assets test hardship provisions which require a formal request but we are left uninformed by the Minister as to just what the requirements are. The Minister, in his second reading speech, does not mention this issue at all. One could even suppose that the Minister is running scared because he does not mention assets tests. That fact emerges from the outline distributed with the Bill-an outline which was authorised by the Minister. At first glance we might think that the Minister, in describing the scope of the legislation, would have used the outline in the explanatory memorandum. Why does he choose not to mention the assets test changes? Why does he not explain them to the House? Are we expected to engage in a guessing game? Why does he not like to tell us what has prompted the change in section 6ad of the Act relating to the assets test? Why does the Minister pretend that members of this House have no interest in knowing the reasons for the change?

The Minister opens up the issue which we have debated hotly-the reason for having the assets test in the first place. This was a measure which, with the capital gains tax, was designed to ensure an improved public funding arrangement. But because these ideas are lacking the support of a broad-based and fairly-administered taxation system we are still struggling to find adequate funding for social security. Because there have been such negative effects on economic incentives there are continuing pressures on the welfare vote. The fact is that the Government has had a poor attitude to people in the private sector whose whole endeavour is to produce income and to honour their obligations to the system by paying taxes fairly imposed to provide income for welfare payments.

The incentive for people to produce income has been hit by all the loadings that have been imposed on initiative. The Government is in two minds. It was very quick to introduce a policy to index wages, a policy which has created great tensions in the productive sector of our economy. Trade unions now feel that they have been deceived by the Government and employers feel that the Government has taken little heed of economic realities. Therefore, it is not surprising to find that there is an attack on the welfare system. The Government has been very slow in addressing the issue of balance.

Every member on this side of the House has shown concern at the cavalier way in which the Government has treated the income producing sectors of Australia. The mistaken policy of wage indexation has created problems of survival for employers and has sent Australia into anguished debates on the issue of government welfare spending. Therefore, it is no wonder that the Minister avoids mentioning the provision of section 6ad. It makes a laughing stock of the second reading speech and the parliamentary process when the Minister plays games like this. A second reading speech is an important element in legislation. This is becoming more so, as I understand there is a trend developing which favours the use of the second reading speech in eliciting the intentions of the legislation. So we can say that the Minister appeared to be deliberately avoiding the issue of the debate-the underlying issue in fact-by avoiding reference in his second reading speech to amendments to the assets test provisions. He, like all of us, is caught in the reality that it is unwise for governments to write a blank cheque for social security. Every Australian receiving social security benefits should be aware that the income that he or she receives is derived from the income generated by the productive sections of the economy. As I have indicated, the great question being asked is: How much can the nation afford to pay for social security benefits? That is a question that this Government finds itself reluctant to ask and that reluctance has placed a heavy burden on the national budget and has strained the economic system.

In this context we on this side of the House have all agreed that there is a serious problem which cannot be avoided. So it is not surprising that judgments will vary as to the impact of the system, as to priorities within the system and as to balance between budgetary priorities and the other priority claimants, such as defence. There is a view that it is a contradiction inherent in the attitude of successive governments which offer more innovative additions to social security outlay, while at the same time calling for cuts in national administration. Now the electorate has seen the error of those ways and there is very genuine competition on all sides of politics to strike the balance.

Another element in the whole situation is a growing resistance electorally to the shift of power to Canberra. This induces considerable questioning of the necessity for the sizable administrative apparatus which has been set up in the Australian Capital Territory. Even State Premiers share the fear that the policy direction of this Government is not to question this accretion of power to Canberra but to retain and enhance it. It is this philosophy of centralisation which places obstacles in the way of more efficient State government. The simple reality is that State governments are close to the people and take it as their responsibility to do political sums on the most pressing needs. By Federal arrangement it is not easy for a member of parliament from Western Australia to understand the problems in Melbourne or Sydney and, of course, vice versa. This mania to build up power in Canberra is now being electorally resisted. Hence we on this side of the House are prepared to look at a realistic dispersal of decision making to the State governments, which have a crucial job in ordering social priorities. Again, one would have to point out that there are difficulties of emphasis on our side about how far we should go and this is not unreasonable.

This legislation opens up a wide ambit despite the obvious effort at non-disclosure in the second reading speech. I believe it is opportune for all members of the House to address this issue on the broadest terms. If we are to do this effectively, we must get away from the silly labelling that has been going on by media oversimplification. Whilst the Minister for Immigration and Ethnic Affairs (Mr Young) may abuse members on his side of the House, he really should address these very basic problems in a more considered way in order to get away from the labelling and get down to what this Parliament should be about-a reasoned and serious debate about very serious balancing questions.