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Friday, 1 June 1984
Page: 2354


Senator MESSNER(11.23) —The statement which has just been brought down by the Minister for Social Security (Senator Grimes) must really stick in his throat. It is the sort of statement over which he must have really suffered terribly in approving in the course of the Cabinet discussions. These are the words of the Prime Minister (Mr Hawke), not the words of the Minister for Social Security. This is an unctuous, self-righteous statement, trying desperately to set the scene for an election at the end of the year and trying to avoid all the hard questions that the Government has claimed in recent months to be the issues which it was addressing in the course of the introduction of this outrageous test. It was outrageous when it was proposed last August. It has now turned into an absolute farce. The Prime Minister, in the course of his remarks, has done much to try to satisfy and smooth over all the concerns of the people with his oily words, his unctuousness and self-righteousness. He donned even the sackcloth of the penitent to claim how he had been misrepresented. This statement is outrageous in its failure to acknowledge the real concerns of the pensioner community and of the whole community about the long term propositions which this Government has in mind.

I will return to that theme a little later, but first and foremost let us note a few of the objectives of this statement. Its first purpose is obvious; that is , to present us with some kind of soothing sermon which will set the scene for an election at the end of the year. That is very clever, but it is no more clever than the Prime Minister is in setting such a scene. We see the prospects of an election right in front of us. With the kind of language that is used in this statement, obviously it is coming sooner rather than later. If it comes, clearly the Government can expect a huge kick in the ballot box, which is where it deserves it. The general purpose of this statement is to smooth things over until the election. I note that the Press has already picked up this item. A headline entitled 'Assets test back-off means post-election hard options' appears in today's National Times. Where the newspaper is wrong is that this Government will not have the opportunity to put that into practice because there will be a new government in power after December. Bearing in mind the courage that this Government does not have, and for the benefit of some of my colleagues on the other side who are so interested in the needy and who are members of the Standing Committee on Social Welfare which is investigating the question of retirement income security, I think I should quote the last sentence of Geoff Kitney's article in the National Times today. It sums up the whole statement that the Minister read today quite perfectly:

If it is intimidated-

that is the Government-

by the noise into abandoning its commitment to greater equity, then it will be justly condemned.

The Government is justly condemned by its own statement; not by the Minister's statement. It is condemned by the Prime Minister's statement, by Mr Hawke's oily words. Let us look at some of the other outrageous premises upon which this statement is built. First and foremost, the Government seeks to blame the Opposition for all the confusion in the pensioner community over the last several months. Yet that does not stand up to analysis, as we will look at in a moment. Even if one looks at this silly statement from Mr Hawke one will see the following statement which completely denies that point altogether. It is stated on page 23:

I regret the confusion, and anxiety, that many pensioners have experienced through the uncertainty of recent months. I have previously acknowledged our part in the responsibility for part of that uncertainty, in the shortcomings contained in last August's incomes and assets test.

'Shortcomings'! What an outrageous word to use in these circumstances for such a disastrous scheme that was introduced by this Government. The statement continues:

I readily make that acknowledgment again.

'I am telling you from the Mount', says the Prime Minister, 'that you are better for our having started again and got it right, than you would have been if we had remained rigid and wrong'. If there is any admission of the validity of the Opposition's activity over the last several months it is that statement. It is a firm acknowledgment of this Government's error or mistake-I should say that it is an absolute farce-in the way it has behaved over developing now five different marks of this assets test. We should not forget that this matter is merely a means to an end; it is not an end in itself. The statement is aimed to cover over the waves of the political fortune of the Australian Labor Party over the next few months in order to create during this period a data bank from which information will be collated about the affairs not only of pensioners but also of a whole group of people-invalids, supporting parents, sheltered workshop allowance recipients and those who receive the handicapped children's allowance- in order to get a very clear impression of the assets of that group of people in the community. Should the Government win the election, which of course it will not after this disastrous performance, it is clearly its objective to use that information as the basis for a more reprehensible assets test. The article in the National Times has drawn our attention to that fact.

The point is that the Government has already admitted in this statement put down today that it has other measures to raise more revenue. We do not see those things being admitted in the statement. We do not see what other things will be introduced. Surely, in the light of the information the Government will be collecting, those things entail capital gains tax, wealth tax, death duties and gift duties. In one way, the Government has already introduced a gift duty on pensioners, although it fails to do so in respect of other people. That is set out in the statement and, to the Prime Minister's credit, he has at least admitted that much.

Given all the smears aimed at the Opposition and given that it is being blamed for what it has done over the last several months, the fact remains that had the Opposition not taken the line that it did, had it not done the things it did, had it not prevented the passage of the legislation last December, which the Government wanted to ram through this House without any debate, the assets test announced last August would now be law. Yet the Opposition is smeared for saving the people from what is now admitted by the Prime Minister as being a terrible mistake. That is clearly the justification for the Opposition's actions over the last several months. The Opposition does not resile in any way from its stand on this matter, and we will use every means at our disposal to bring before the people of Australia the real issues tied up with this proposal. These issues still remain in question because it is obvious that the Government is using this proposal only as a means to an end towards the introduction of other measures later on, if it sees before it an election possibility.

Let us just look at one or two items of real interest in this statement. First and foremost, we see that the Government will index the amount of assets over and above the family home and it is going to use the consumer price index to measure that. That suggestion was specifically cast out as being inappropriate in the report of the Gruen Panel of Review of Proposed Income and Assets Test. I notice that that suggestion is supported by the Australian Democrats, yet it was completely denied by Professor Gruen in his report. He indicated it was inappropriate because it in no way measured the rate of increase of assets such as stocks and shares. The two are totally irrelevant. They do not connect at all . So in what way can that be an efficient or effective measure of the rate of increase of assets? It is a total and absolute farce, as well as flying directly in the face of the Gruen report.

I believe that the Government stands condemned particularly in its statement on the question of how much revenue will be raised. Do honourable senators remember those statements made last August, when it was claimed that in 1984-85 $310m would be brought in by way of the assets test? What will the figure be now? Not in 1984-85, but in 1985-86, it will be $45m. That is $45m, compared with the original estimate of $310m.


Senator Dame Margaret Guilfoyle —That is not net saving, is it?


Senator MESSNER —As my colleague has pointed out, that is after taking into account some, but not all, factors. The most significant point is that in the next financial year there will actually be a net cost to the revenue due to the establishment of the assets test machinery.


Senator Chaney —They will take that from the poor.


Senator MESSNER —Of course it will come directly from the poor because no machinery will be in place to take it from anybody else. So it will cost $30m next year. This comes directly on top of the $11m that has been admitted by the Government in Estimates committee hearings as having been spent already on the installation of the necessary machinery. That is $11m down the drain already, quite apart from what will occur when another $30m is spent next year. This is an absolutely disastrous proposition. That is not the most important concern to which we should address ourselves. Again, the Prime Minister, in his oily words, is saying in his statement: 'Oh, really, we are not going to intrude into your lives by obtaining this information'.


Senator Elstob —Oh!


Senator MESSNER —I am giving as good a representation of the messiah as I can. Senator Elstob may pray to him; we certainly do not. The point is that, given that some $30m will be spent on the establishment of the system, how many people will be required in the Public Service to police it? The original estimate last August was nearly 3,000, and I take it that is still an accurate number that will be required in the Public Service.


Senator Grimes —No.


Senator MESSNER —Senator Grimes grimaces in his usual way and says no, but where will the Government spend the $30m if that is not the correct number of people? I would like him to explain that, but he cannot because the Prime Minister has written the statement and has avoided these hard questions. If an extra 3,000 public servants are needed in the departments administering the tests and policing the system, we have to count that against the number of people who will actually lose their pensions or will be affected by the test in some way. The Government's last estimate, as put down in the Gruen report was just under 30, 000 people. So we will have the enormous spectacle of 3,000 public servants policing the recovery of pensioners under the assets test from 30,000 pensioners .


Senator Dame Margaret Guilfoyle —So you can be a modified tall poppy.


Senator MESSNER —One has to be a modified tall poppy, but what about the modified public servants who will have to do all this work? The point is that we will have a policing ratio of one policeman in the Social Security Department to look after 10 pensioners. In what way would that not intrude into the affairs of the pensioners? It is obviously aimed at driving hard into the affairs of the pensioners partly to obtain the information which the Prime Minister would have us believe he wants. Clearly, the Government has other objectives in mind, and I return to my original theme. This statement is a delaying tactic to camouflage the Prime Minister's electoral ambitions, with the object of ensuring that if the Government is re-elected it will have the opportunity to impose other taxes thereafter.


Senator Grimes —Ha, ha!


Senator MESSNER —Senator Grimes laughs again. He will laugh next January when he is sitting on this side of the House as Opposition spokesman for social security . We have seen emerge in this statement, another canard which we have been seeking to put down for some weeks now, and that is, that the business community somehow supports the Government in its activities in this area. There is a direct quote here from the Prime Minister in regard to the support of his actions in this by the Business Council of Australia. He says: 'Look, really this must be a very good test because we are going to hit only the people who are supporting the Business Council. Therefore, if they are prepared to put up with it, so should the rest of the community'. Of course, what this Government totally ignores-this is the major point that we have been seeking to make all along-is that the way in which we should be approaching the question of the control of social security expenditure in the future is by encouraging people to look after themselves and to provide themselves with opportunities and incentives to do that in both the tax system and the social security system. The great mass of those who will be caught by this proposal are not the really rich, not the really wealthy in the community and not those who are engaged in tax avoidance or evasion schemes, they are those who have sought to build up their assets in a modest way during their working lives to set aside something for their old age so they will not become a burden on the community. That is the group that will be affected by this proposal. The Prime Minister should not lie by trying to draw attention to the Business Council of Australia supporting that group. If the Attorney-General, Senator Gareth Evans, were here he would probably say that the sort of statement that the Prime Minister has been making in this paper is tendentious, and I would have to agree with him. I believe the whole paper is tendentious and stands condemned on that basis.

Let us look at one other aspect of this wonderful statement that has come from the Prime Minister today; wonderful in the sense that it ignores all the realities of the problems that have been created through this Government's actions in the last 12 months and it deals with the dreams of Prime Ministerial ambition. That is what this paper is about. The thing that has emerged of most concern to this community is the introduction of death duties by stealth through the introduction of the pay as you die scheme. Much has been said and written about this proposal, but I would like to draw your attention, Mr Acting Deputy President, to the circumstances of the people who may be caught in such a situation where they have to 'borrow'-as it is termed in this statement-their pensions from the Department of Social Security, and which will be taken from their estates upon their death. Consider the case of a person aged 65. Assuming a current long term bond rate of 14 per cent for the moneys which he would need to borrow in order to keep himself alive for the rest of his life, in just five years he would owe the Hawke Labor Government $35,000. He would be mortgaged to the Hawke Labor Government for $35,000. At the age of 75-10 years further on- that figure would rise to $102,000 to which he would be mortgaged to the Hawke Labor Government. Should that person reach the age of 80, which, of course, is a common occurrence today with rising standards of medical treatment, that figure would be over $232,000. Mr Acting Deputy President, if we took the matter to the extreme-I am sure there will be some people caught in these circumstances-and if we take the age up to 95, that figure becomes $1.97m, to which people would be mortgaged to the Hawke Labor Government not only in their own lifetime but also into the lifetime of their children and their children. That is a concept which this Government has not in any way made clear in its remarks and it adds to the farcical nature of this statement that has been brought before us today.

There is only one other item that I would like to mention, and that is the reference in the paper to the re-introduction of a gift duty on pensioners.


Senator Walters —Just for pensioners.


Senator MESSNER —Yes. It is typical of this Government's approach to the whole question of the assets test in the last 12 months-and, of course, in some of its other ways with the introduction of the over-70s income test and the lump sum superannuation tax-that it has hit in its taxing measures only one group in the community, and that is the aging and those who are dependent upon welfare. I remind the Senate that it is not merely the aging who are caught in these circumstances, but also it is the invalids, it is those on the sickness benefit, it is those who are receiving the handicapped children's allowance, it is those who are working in sheltered workshops and it is widows. All of those people will be caught in these circumstances.

I make the point very clearly that this Government has obviously not thought through its proposals, to the point where it is prepared to impose a taxation measure against all in that group-widows, invalids and the aging-but it is not prepared to take action against tax avoiders and tax evaders. It is well chronicled in this place how little action this Government has taken on tax avoidance in the last 12 months, and yet it proclaimed its credentials in this area before the election last year as being so great and this was going to be one of its first areas of concern, priority and action. But of course we have seen no legislation whatsoever since 1983, except some piddling bits of retrospective legislation which have absolutely had to be thrown out by the Senate on the very grounds of objection to major principle, which was obviously introduced into this chamber tendentiously by the Prime Minister with the purpose of ensuring that he would be provided with a double dissolution issue for the election that he wants by December 1984. That is what that was all about . It was nothing to do with tax avoidance or evasion; it was just political camouflage to set the Opposition up for an election later this year.

We cannot, by any stretch of the imagination, say that this Government has attacked tax avoidance, except in the case of the elderly, the infirm, the widows and those who are in sheltered employment. It is those people that this Government sees fit to attack, and it is that group of people which Mr McKenzie, from the Australian Council of Social Service, reported to the Press a few weeks ago following the meeting of the Economic Planning Advisory Council, which were regarded by this Prime Minister as totally irrelevant to the issues before EPAC, to the point that the Prime Minister said that that group of people was not part of the economy. If anything destroys this Goverment's argument in this unctuous piece of nonsense that is now before us, it is that statement because the Government is not concerned with the needy, it is not concerned with the poor and it is not within its purview as part of the economy because it is concerned only with two groups. This corporate view of government which this Prime Minister has-'We will do what the Australian Council of Trade Unions tells us to do, what the unions tell us to do'-is at the core of this Government's policy. It is that which is in this Government's craw. It is implementing, in a craven way, the unions' policies. It is this corporate view which is causing so much concern in this community. That is what the Hawke Labor Government is about. That is what it stands for and that is why this paper does not deserve any kind of debate except the absolute condemnation of the Senate.