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Wednesday, 23 May 2001
Page: 26908

Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (5:02 PM) —The 2001 budget provides the government's fifth consecutive cash surplus, the longest run of cash surpluses in almost 30 years. It delivers additional funding for national priority initiatives including measures to provide increased support to older Australians, improve the welfare system and improve the health and living standards of all Australians. A number of the key measures in the budget, which was handed down last night, are being debated today. I am pleased that honourable members on both sides of the House support the package of bills. As part of tax reform, the government delivered a number of benefits to pensioners and self-funded retirees. These included real increases in pensions and allowances, lower income tax rates, lower capital gains tax rates, one-off non-taxable bonuses of up to $3,000 and refunds of excess imputation credits. Last night's budget and these bills build on those measures which the government has already delivered upon.

One of the bills being debated today increases the effective tax-free thresholds for senior Australians, including self-funded retirees and people who are of age pension age and receiving a Commonwealth pension. The higher rebates will allow single senior Australians to derive taxable income up to $20,000 without paying tax. This compares to $12,652 in 1999-2000. Those under age pension age will be able to derive taxable income up to $15,970 in 2000-01 without paying tax. This compares to $12,652 in 1999-2000. The bill also amends the Medicare Levy Act 1986 to ensure that senior Australians who are entitled to the increased rebates as a result of this bill do not have to pay the Medicare levy where their taxable income is less than $20,000. Australians under age pension age who receive a taxable Commonwealth government pension will not have to pay the Medicare levy where their income is below $15,970. The amendments made by these bills apply to the 2000-01 year of income, which means that these Australians will see the benefits of these measures in a lower tax bill or a higher tax refund after they lodge their 2000-01 income tax returns.

The Family and Community Services and Veterans' Affairs Legislation Amendment (Further Assistance for Older Australians) Bill 2001 forms part of a package of measures that further demonstrates the appreciation and acknowledgment of the government and the community for the contribution older Australians have made and continue to make to society. This bill directs special attention to those who, while on low or modest incomes, do not qualify for age pension. Previously, the Howard government extended access to the Commonwealth seniors health card by increasing the income limits under which a person could qualify. This bill goes further by increasing the income limits to $50,000 for singles and $80,000 for couples. The bill also provides for the extension of telephone allowance to holders of Commonwealth seniors health cards. Until now, only pensioners and some beneficiaries could qualify. As part of this legislative package, superannuation assets will be exempt from the social security means test for people between 55 and age pension age. This will encourage people not to give up and consider themselves retired at an early age and will help people preserve their superannuation savings for a better retirement in the long run.

In addition, the package provides for a one-off payment to the aged to be paid to those people who, on 22 May this year, have reached age pension age and are receiving a social security pension or benefit. A similar payment will be made to pension age service pensioners, income support supplement recipients and age pensioners receiving their payment from the Department of Veterans' Affairs. The one-off payment of $300 will be paid to social security pensioners and beneficiaries by 30 June 2001 and will not be taxable.

Turning now to the Compensation (Japanese Internment) Bill 2001, in the 2001-02 federal budget the Howard government has recognised the Australians—whether they be sailor, soldier, airman, nurse or civilian—who endured the dark days of the Second World War as prisoners of Japan. More than half the Australians who lost their lives during the war in the Pacific died as prisoners of war. They were driven into slave labour and forced on death marches, and they suffered in the most horrific conditions imaginable.

This legislation will give effect to key elements of the government's commitment to make a one--off cash payment of $25,000 to those Australians who were held captive by Japan during the Second World War and to the widows and widowers who supported their spouses after the war. The payment will be made to eligible recipients who were alive on 1 January 2001, namely, members of the Australian defence forces who were held prisoner of war by Japan between 7 December 1941 and 29 October 1945, civilians who were detained or interned by Japan during the same period and who were domiciled in Australia immediately before their detention and widows or widowers of former POWs or civilians held by Japan. In those cases where an eligible recipient has died since 1 January 2001, the payment will be made to their estates. The one-off payment will be non-taxable. The payment will be exempted from the income and assets test applied to the Veterans' Affairs service pension, income support supplement and any Centrelink income support payments.

I believe that in his contribution the honourable member for Cowan queried the matter of deeming, and I want to advise the House that the one-off payment to ex-POWs will not be counted under the income and assets test for people receiving income support payments from Centrelink or Veterans' Affairs. If a person invests the payment, income from the investment will be counted under normal income test rules. For example, if the person invests the money in financial investments, the investment will be subject to the normal income test deeming rules. This is the same treatment as for other types of exempt income and assets in social security and veterans' entitlements legislation.

A query was also raised as to why only former prisoners of Japan were included for the purpose of the $25,000 one-off payment. Obviously, it would always be desirable to include as many people as possible, but the conditions that were endured by prisoners of Japan were so horrific that the government believed that a very special case ought to be made for those people who were prisoners of Japan and also their widows or widowers. I am told that 36 per cent of people who were prisoners of war of the Japanese in the Second World War died in captivity. For my part, I had a great-uncle who was a prisoner of the Japanese at that time. That is the reason why this assistance has been given to people who were prisoners of war of the Japanese.

The honourable member for Cowan also queried why this took so long. That is a fair question, but we have had governments of both political persuasions in Australia since the Second World War and I suppose this was a case of `better late than never'. It is regrettable that it has taken as long as this, but the Howard government is the government which has finally redressed what is obviously an historic inequity.

The honourable members for Lilley and Swan claimed that press reports suggested that benefits to self-funded retirees would be available to people over 55. The government has clearly stated that these measures are available to senior Australians, and these are people who are of age pension age. The government has never suggested that they would be available to people who are 55 years old.

The same two honourable members also suggested that the government neglected to say that regulations were recently gazetted on 11 May 2001 to increase the rebates to $15,970. The second reading speech states:

Regulations have been gazetted to allow single pensioners who are under age pension age to derive taxable income up to $15,970 in 2000-01 without paying tax.

The government has not tried to hide this fact. These measures provide significant benefit. They enable single people over age pension age to earn up to $20,000 without having a tax liability, and they also remove the Medicare levy liability for these people whose income is below $20,000.

The package of bills which we are considering in the chamber at the moment has proven to be very popular. It indicates that this government is attuned to what the people of Australia want. We have recognised that as a nation we owe a very special debt to those people who are retired and who are pensioners. They have contributed to make this country the lucky country. They have contributed to the freedom, the stability and the way of life that have made Australia the envy of the world. All government members and the entire community are proud of this package of bills, and I am very pleased to commend them to the chamber.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.