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Wednesday, 17 June 2009
Page: 6273


Ms BURKE (11:01 AM) —I rise to support the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009, which is before the House today. The 2009-10 budget contains many significant measures aimed at pulling Australia out of the global recession and securing our long-term prosperity. It is one of the toughest and most important budgets in a generation. The global recession, combined with the increase in middle-class welfare under the previous government, has meant that we have had to make hard decisions—many difficult decisions to ensure the long-term integrity of the Australian economy.

This budget also provides an opportunity to address important and long-overdue social reforms enabling the establishment of a paid parental leave scheme and the reform of our pension system. The secure and sustainable pension reform package prepares Australia for the difficult social and economic challenges of the future, including the issue of our ageing population. In delivering these reforms we are seeking to address three key issues with the current pension system: the inadequacy of pension payments, particularly for single pensioners; the overly complex and restrictive nature of supplementary payments and allowances; and the unsustainable structure of the system for the long term.

My electorate of Chisholm is home to about 20,000 age pensioners, disability pensioners, carers, special needs pensioners and veteran income support recipients. These reforms will make a genuine difference to the lives of each and every one of these pensioners. They will benefit not only from the increased payments but also from the fact that these reforms make the system simpler, fairer and more flexible. Of course, in delivering these reforms we are picking up the slack from the Liberal and National parties, whose chronic neglect of pensioners over 12 years is there for all to see. It has been left to the Rudd government to implement the necessary reform and provide relief to pensioners during the global recession. Only a Labor government can appreciate that tough economic conditions are not an excuse for ignoring the plight of Australia’s 3.3 million pensioners. The conservatives have proven that they lack the understanding and ability to deliver such reforms. In raising pension payments and reforming the system the government are directly assisting those in need, but we are doing so in a way that is sustainable; we are doing so in a way that deals with the challenges of an ageing population; and we are doing so in a way that will secure the integrity of Australia’s pension systems now and into the future.

The centrepiece to our secure and sustainable pension reform is the biggest increase in the single pension ever seen in Australia, an additional $32.49 per week for age, disability and carers pensioners on the full single rate. This is in addition to the assistance being provided to pensioner couples, who will be receiving an extra $10.14 for the full rate couples combined. This is an important increase that will ease the financial stress for single pensioners rights across Australia. In line with the Harmer review it lifts the ratio between singles and couples pensions from 60 per cent to 66.33 per cent combined—that is, two-thirds of the combined couples rate. To many of us $32.49 per week may not sound like a lot of money. It is, however, a significant investment by the government and its impact on the lives of single pensioners cannot be underestimated. To assume that a single can live half as well as a couple has been the basis of the pension for a long time. But ask any pensioner who is living on their own out there and they will tell you that they are not doing it a lot cheaper than a couple. This measure has picked up recognition of that fact.

Just last week I had the pleasure of hosting a morning tea for a wonderful bunch of seniors from the suburb of Glen Waverley in my electorate. I have been staggering these morning teas around my electorate. Like the Deputy Speaker, I have got a fairly ageing community in my electorate so I cannot invite them all at once because there would just be too many people coming along. So we had about 100 people turn up to a morning tea and it was a fantastic day, full of interest. We discussed many, many things, from the international implications of climate change to local planning issues. You do not get to specify in these environments what is and is not the bailiwick of a federal member, and you discuss everything. Naturally the pension system was one of the more prominent issues discussed on the day. To quote one constituent, a woman who I have never met before—she has been in contact with my office but she is not a party member and certainly was not put there as a plant by me: ‘This government have provided more in their first term to pensioners than the other mob did for 10 years.’ She went on and gave some more flattering praise and I was pretty happy she had come. But, on the whole, for most of the day this sentiment was echoed by the majority of people in attendance on the day. Several were quite vocal in thanking the government for permanent increases in their pension as well as the additional stimulus money provided in December last year. It was terrific to see these people concerned not just about themselves but about future generations. We had quite a long discussion about the Building the Education Revolution and the issue of providing more money for education as well.

It is important to note that these payment increases are supported by the findings of the government’s Harmer review. It is a responsible measure and above all a considered increase that will alleviate some of the day-to-day financial stresses facing our pensioners. It is delivering reform in an area where our predecessors stalled for 12 years, fully aware of the challenges facing the pension system but failing to implement any serious reform.

As a fiscally responsible government, we have to ensure there is a mechanism to pay for the increase in pension payments. That is why we have to ensure payments within the pension system are financially sustainable. In doing so, we need to be mindful of the challenges Australia faces as a result of our changing demographics, particularly the fact that we are an ageing population. Indeed, by 2050, the balance between old and young Australians will have changed significantly. One in four Australians will be 65 or older compared to around one in eight today. Our life expectancy will be somewhere in the 90s. These factors are why the government is taking the tough but responsible decision to progressively increase the age pension qualifying rate to 67 years from 2017. This is, indeed, a tough decision but a necessary thing to do.

Even the opposition agree that the qualifying age needs to be increased, although they failed to take action while they were in government, despite conducting two comprehensive intergenerational reports on the very subject. This is an issue not confined to Australia. Many other countries have increased or are planning to increase the pension age in light of their ageing population, including the United States, Germany and the United Kingdom.

This is a vital reform that ensures the pension, while providing an adequate standard of living for pensioners, can be afforded by taxpayers into the future. The gradual introduction will allow affected individuals time to plan for their retirement. As the financial adviser Noel Whittaker has put it:

All they—

the government—

are doing is raising the age at which you can apply for a pension from 65 to 67. As it affects only people born after January 1, 1957, they have at least 15 years to prepare for it.

In other words, these reforms are not dictating the time at which a person is able to retire, as some in the media would have us believe. Additionally, by 2023, when the new age pension is implemented in its entirety, working Australians will have had 30 years of the superannuation guarantee, introduced under a Labor government, to build our own private retirement savings. So it is incumbent upon us as government to ensure the integrity of the super system over time so we are not putting a double impost upon people seeking to retire.

There are around 20,000 pensioners in Chisholm who will immediately benefit from the increased payments legislated for in this bill. Aside from that fact, an objective observer looking over the data for my electorate may come to the conclusion that many of my constituents may not benefit from the pension system as much as those in other electorates across Australia. This is true to an extent. Chisholm covers suburbs in the east of Melbourne that have certainly grown in affluence over the past decade or so. Many seniors in Chisholm have built up strong earnings over the years and are classified as self-funded retirees. One of the stark realities of the global financial crisis, however, has been that the superannuation investments of this group have taken a huge hit. This was an area of discussion at my seniors morning tea, as I do have many people who are self-funded retirees in my electorate who have sacrificed over the years to ensure that they have a substantial retirement investment to live off. They are finding it harder and harder and they are finding that they are dipping into capital more and more to make ends meet.

The Australian newspaper reported on Tuesday that, despite staging a remarkable recovery in April of 3.06 per cent, the strongest monthly return this century, most super funds are expected to post a financial year loss for the second year. At the end of April the returns of balanced super options for this financial year were down an average of 13.71 per cent. This is a savaging of the retirement savings of many self-funded retirees. Indeed, my office has received a large amount of correspondence from self-funded retirees who are understandably quite disturbed to see their investments spiralling downwards as a result of the global recession.

This highlights the importance of there being a strong safety net underlying our income support system both now and into the future. This safety net comes in the form of our pension system. Every Australian knows that they could one day be forced to rely on a pension, a fact that has been made all too obvious by the global financial crisis. Again, many people are coming into my office quite perplexed and distressed at actually having to go into a Centrelink office for the first time in their life to seek a part pension. But I am certainly encouraging people to continually look at their retirement statements, their investment statements, because they may be entitled to some part pension, which goes part of the way to assisting predominantly with a reduction in utility bills. But everything helps at this point in time. This means that introducing the reforms outlined in this bill before the House today is essential.

We all know that carers make significant sacrifices looking after those who are incapable of caring for themselves. The parliament has just recently handed down a pretty seminal report into carers. I want to commend the committee for doing that work. We often do not hear of the great work of the committee system. This demonstrates the parliamentary committee system working in action. The carers report is a terrific document.

One of the most important and widely welcomed measures in the Secure and Sustainable Pension Reform package is the introduction of an annual $600 care supplement payment. This payment replaces the previous ad hoc carer bonuses and will allow carers to manage their own financial circumstances. Within my electorate, like many others across the country, I have many groups that come together under the banner of carers. One group that meets regularly in my electorate is a stroke support group. The stroke support group was started up by an amazing person within my electorate, Helene. Helene for the past 20 years has been caring for her best friend, Diane. She is not a family member—not a relative, not a child, not a husband. Her best friend, Diane, had a stroke at a very early age which left her completely incapable of looking after herself. The only option for Diane was to go into a nursing home. Helene would not hear of this and changed her home, which has accommodated this amazing duo over these years. It was an interesting exercise at the beginning of this experiment, because it was quite unusual that someone with no relative relationship whatsoever to an individual had taken on the primary care role of that individual. Helene has suffered through cancer herself, and Di has had ongoing medical issues, but the two of them have managed to stay in the home all this time, managing to continue to see their children and grandchildren. My hat has always gone off to this remarkable woman—indeed, this remarkable pair of individuals, who have demonstrated that you can do it, but it does come at a rather large cost.

This payment will be of great assistance to those sorts of people. This payment will ensure that people can maintain their dignity within the home and it will not be this ‘will I or won’t I’ experience each year. It means they will be able to budget more effectively and plan their household finances and expenditure with an added sense of certainty. In Chisholm there are over 2,000 carers who will benefit from the annual supplement payment. Nationwide there are approximately 500,000 eligible for the payment. Through this reform the government is recognising the selfless contribution carers make to the lives of the most vulnerable in our community and the fact that many are under significant financial pressure.

Just outside my electorate, in the adjoining electorate of Deakin, there is another terrific institution. The MS Society is housed there and so is BrainLink. Again, a big part of these two organisations is caring for the carers. People with an acquired brain injury fall into a fairly stressful category of people in need and are often young people who will need care for a very long time. BrainLink provides an amazing array of services and support. I have had the privilege of meeting some of the most dedicated and phenomenal carers through that group. I know that this assistance has been greatly welcomed by that group.

This bill implements key elements of our Secure and Sustainable Pension Reform package. These are long overdue reforms. They are reforms that improve the adequacy of the pension system, make its operation simpler and more responsive and secure its long-term sustainability. Age pensions, disability pensions, carers, wife pensioners and veteran income support recipients will all benefit from increases in their pension payments. Just as importantly, this bill ensures Australia will be in a position to meet future demographic challenges, including our ageing population. It introduces reform that will ensure the long-term durability and integrity of our pension system. I commend the bill to the House.