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Thursday, 14 August 2003
Page: 18615


Mr BILLSON (4:35 PM) —Dunkley hosts the largest proportion of UK settlers of all the Victorian electorates. A number of times, I have spoken of the reckless discrimination directed towards them by the British government in failing to index the pensions of UK pensioners who have migrated to Australia. I have been supportive of all efforts to pursue a remedy to this, but in light of the recent court decision on an action calling for this discriminatory policy to end—an action instigated by Mrs Carson, a UK expatriate who is a resident of South Africa—it looks like we are not going to get a lot of assistance for our UK settlers in the short term.

To put this in context, there are almost a quarter of a million UK settlers in Australia who are disadvantaged under the current UK government policy. To be fair to the Blair government, this is a policy that has been passed from UK government to UK government of all different persuasions. The net result, though, is that the living standards of UK settlers who have chosen to live in Australia are being diminished as each day goes by. The spending power of their pensions is being diminished because those pensions are capped at the value that they represented at the time the person left the United Kingdom and settled in Australia. The broader taxpayers in Australia, as a result, top up these pensions for income support purposes to the tune of well over $100 million per year. Many UK pensioners fall outside those means tested income support arrangements and simply see their retirement savings, which they have contributed to over many years, diminished over time.

To add insult to injury—the injury being the financial disadvantage inflicted on these people—the UK's Inland Revenue assumed that these pensions were being indexed. I refer to the experience of the Shrubsoles in my electorate. The Shrubsoles have been very active in trying to pursue this matter on behalf of the many UK settlers in Australia. In fact, they published in the International Expressan advertisement calling for an end to this discriminatory practice. They received much support not only here in Australia but in South Africa, Canada and New Zealand—four countries, most like the UK I would argue, where people suffer the indignity and injury of not having their pensions indexed. The result of that is that these people are being disadvantaged.

The latest revelation comes from Inland Revenue. So odd, so peculiar, is this practice of non-indexation by the UK government that Inland Revenue, its own tax collection arm, did not even know about it. The Shrubsoles, because they are carefully looking at their means of income, identified that the tax assessments operated by Inland Revenue assumed that these pensions were being indexed. So I would encourage the quarter of a million UK settlers in Australia to have a look at their Inland Revenue PAYE coding notice. I am holding an example of the notice: in the right-hand column you will see—under note 27, state pension, state benefits—an amount in pounds sterling that, because of the UK government policy, has been frozen. Everybody seems to know that except Inland Revenue.

So what have Inland Revenue been doing? They automatically index this amount, assuming that the UK government is doing the right thing by all its pensioners. Inland Revenue were unaware that the UK settlers who have chosen to live in Australia, New Zealand, Canada and South Africa are being discriminated against. Inland Revenue's own computers were not even aware of this. So UK settlers in Australia, particularly those on visas that require them to have an independent means of support—therefore, not only the state pension at the level it was frozen but also other forms of income, whether it be an annuity or a defence force pension—have had those pension benefits `indexed' over the last few years.

I would encourage all UK settlers, particularly those who are on a self-funded retiree visa in Australia, to have a very careful look at their tax statements and to get onto Inland Revenue over in Cardiff and say, `Not only are you damaging me financially; you are now ripping me off.' This is where the insult is added to injury. These pensions are assumed to have been indexed by Inland Revenue, and UK settlers are being taxed on that basis even though those pensions are not being indexed. So I would encourage all UK settlers to check out their tax returns, get onto Cardiff, make it clear to them that they are not happy about the indexation issue but that they are particularly upset that they are being taxed at a needlessly higher rate, because they are being discriminated against by the UK government, along with the folks who have settled in South Africa, Canada and New Zealand.

This practice that the UK government is implementing has to stop, but I am not optimistic. A letter from the Secretary to Social Security says:

However, the government's priority should be to concentrate any additional resources that may become available on those pensioners resident in the UK.

If you are a pensioner in Argentina, your pension is indexed. If you are a pensioner in the United States, your pension is indexed. But if you are a UK settler in Australia, you are discriminated against. It is outrageous and we have got to check this tax rip-off as well.