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Thursday, 23 August 1984
Page: 297


Senator WALTERS(8.26) —I expected in this debate to hear some Australian Labor Party senators defending their Minister for Social Security ( Senator Grimes) on this motion of Senator Messner's. However, it would appear that in common with the Prime Minister (Mr Hawke) all the Minister's back benchers have deserted him once again. The Opposition, on behalf of all those people who were deceived by the Prime Minister prior to the last election, is taking the Government to task for dishonouring all its promises. I am sure that the Minsiter for Social Security will remember the heady days of the Hawke election promises. They filled pages and pages of the papers. Indeed, the Age published a cartoon representing Mr Hawke as the original pied piper leading the Australians down the garden path. Like the pied piper, it was all a hoax and Australians are just beginning to understand that. The broken promises were justified, according to Mr Hawke, by the biggest lie of them all. I refer to the shocking deceit perpetrated by Mr Hawke on the supposed $9.6 billion deficit, a figure concocted and repeated so often that Senator Cook when he first came to this place swallowed his leader's own propaganda and unintentionally misled the Senate. He believed that we had left the Government with a deficit of $9.6 billion. Later Senator Cook apologised to the Senate and said he did not understand the position. He believed his own side's propaganda. It had been repeated by the Prime Minister, the Treasurer (Mr Keating) and every other Labor spokesman so often that Labor candidates believed the falsehoods they were told.

This is another Budget, and in the past week more promises have been made to be broken. It is typical of the Hawke Government that this motion once again deals with broken promises. Those broken promises affect those who are least able to fight back, the aged people. I quote from a couple of Mr Hawke's statements prior to the election, as contained in ALP policy statements. He said in one of those statements: 'I am not in the business and the Labor Party is not in the business of making promises that cannot be fulfilled'. What a hoax and a joke. Mr Hawke continued: 'But the sensible thing to do is to make sure that the commitments you make are ones that are not going to have to be broken'. The credibility of the Prime Minister, with his broken promises and the sorts of statements I have quoted, has to be understood by the people, and indeed is being understood.

Let us examine what he did promise the elderly, the aged pensioners, in his first term of office. He promised to raise the basic pension to 25 per cent of average male earnings and to continue to raise it by indexation. Next, he promised not to reduce pensions. We can all remember, as I am sure you do Mr Acting Deputy President, when Mr Fraser said the pensioners would be better off hiding their savings under the bed than trusting Mr Hawke. Nobody on the Government benches has yet been big enough to apologise to Mr Fraser and tell him that he was quite right. Immediately the Labor party came to power the $52 was taken away from those over 70 years of age. A means test was slapped on and they lost $52. An assets test was next introduced-not just one but we had Mark 1 , Mark 2, Mark 3 and Mark 4. I am not sure what we are up to now but the assets tests were changed as regularly as the average bloke changes his socks.

We were then told that the Hawke Government would lift the tax threshold of pensioners by $465 to $5,893. Again, what a dreadful hoax this was. The pensioners were told that their pensions would be adjusted on the basis of the immediately prior six month consumer price index movements to cut out the present lag of four months to one month. Again, what a dreadful hoax. Pensioners also were told that the great Labor Government would establish an office of aged care, but again not a thing was done. On top of all that, pensioners were also told that their superannuation would not be taxed. We all know what happened to that. We also had a Mark 1, Mark 2, Mark 3 and Mark 4 of the superannuation debacle.

Let us look at each of those areas separately. I mention first the promise to raise pensions to 25 per cent of average male earnings and to continue to raise them in line with indexation. That has not occurred. We are now up to 23.5 per cent, not 25 per cent as promised in the first term. As we have been promised an election any day there is obviously no intention of raising pensions to the 25 per cent level. As Senator Messner has just indicated the only contribution towards attempting that raise is a 35c increase. That amount of 35c is what is left from the $2.50 given in this Budget when we do away with the $2.15 of the Medicare fiddle. Senator Grimes acknolwedged that in Question Time today. He said that yes, there was a $2.15 extra cost attributed to pensioners for Medicare and that therefore, pensioners had got just 35c out of that claim of Mr Hawke's that the pensions would reach 25 per cent of average male earnings.

We come now to the assets test. The Government said that it was not going to interfere with pensions. As I mentioned Mr Fraser said that it would be better for pensioners to hide the money under the bed. It certainly would have been. Money was pinched from the over-70-year-olds to the amount of $52, means-tested. It would have been so simple to say that only those turning 70 years from that time on would have to be means tested. But no, the Government took the money from those who already had it. The Government took the money from those who had planned for the rest of their retirement years. Those plans have now been destroyed.

As I said we then had the various assets tests. These interfered with all the planning of the pensioners. I believe that is quite a despicable action. The aged pensioners are the only sector that now has death duties. The Gruen Assets Test Review Panel report actually stated that. Professor Gruen actually said that we could call them death duties if we liked. That is a pretty clear description. He said: 'It doesn't worry me if you call it death duties'. He believed that that was a fairly accurate description. What is this saving the taxpayers? We are not saving a cent this year. Indeed, it is a cost because we have to pay all those investigators going around checking on pensioners making sure that their assets are well under the limit that they are permitted. We are told that not only will their ordinary assets such as their car, the contents of their house and anything else they may possess be included but also their life insurance policies will be classified at surrender value and counted as an additional asset. That is a good one!

We then have the next promise to lift the tax threshold to $5,893. Not only has that not been carried out but there is also a double tax after the amount of $5, 533 is reached. The pensioners not only pay the usual tax on every dollar over that amount but pay the additional 12.5 per cent of their rebate. It is not just a matter of having reached that tax threshold but also a matter of double taxation. We then come to the promise to adjust pensions on the basis of the six months immediately prior to the consumer price index movement to overcome the present lag of four months that Mr Hawke was complaining about. At present as we all know there is automatic twice-yearly adjustment in May and November to cover for loss through inflation over that period. The May adjustment covers inflation for the six months from July to December of the previous year. As the Prime Minister said there is a lag of four months which he promised to do away with. He has not. The May payment should take into account the six months ending in April. That promise has again been ignored completely. No attempt has been made. The same situation, of course, applies to the November adjustment.

I now move to the promise to establish an office of aged care. It was all just rhetoric. There is a considerable overlap between the departments and the pensioners who have asked for some time for an office of aged care. The Government, Mr Hawke and indeed, Senator Grimes, promised that. Again that promise has been ignored. Next the Government promised it would not tax superannuation savings. The Government said: 'People have made their sacrifices all through their working lives and we won't touch it'. In the Australian Financial Review of 18 April 1983 it was stated:

The Prime Minister, Mr Hawke, has confirmed that there will be no increase in the tax rate for lump superannuation payments.

This statement was made following the economic summit. I am sure all honourable senators remember that wonderful economic summit when the Government conned unions and employers into sitting in the other chamber. They all came and Mr Hawke said that all the promises would be carried out because he and the Labor Party were not in the business, as he said, 'of making promises that cannot be fulfilled'. He was not going to have his credibility interfered with. He said:

What the sensible thing to do is to make sure that the commitments you make are ones that are not going to have to be broken.

The Government conned the Summit. Following the Summit the Australian Financial Review stated:

The Prime Minister, Mr Hawke, has confirmed that there will be no increase in the tax rate for lump superannuation payments.

There has been considerable speculation that the Government intended to increase the rate after deciding to restrict the level of superannuation payouts for federal politicians.

A speech by the Minister for Social Security, Senator Grimes, to the National Economic Summit in which he referred to the tax advantage enjoyed by superannuation only seemed to fuel speculation.

Senator Grimes has since said that his comments were misinterpreted.

Mr Hawke said on Friday that comments he had made some weeks ago about the review of existing expenditure and taxation have been given a currency they did not deserve.

I do not suppose that he said that either. It continues:

He said there was 'no basis' for the speculation that the Government intended to raise the 5 per cent tax on lump payments.

Mr Hawke privately told members of the ACTU last week that the Government would not move against the tax.

That is not all. I have a letter from Captain Fitzsimmons of the Australian Federation of Air Pilots. He sent us a copy of a response from the Minister for Finance, John Dawkins. Get a load of this:

Bob Hawke has asked me to reply to your letter concerning superannuation entitlements. We have no plans to alter the existing arrangements concerning lump sum superannuation schemes or the taxation of lump sum payments. Any future consideration of a national superannuation scheme would not interfere with the entitlements of people who were participating in existing private or public schemes.

That is from Mr Dawkins. What is Mr Dawkins's credibility like? I think Mr Tuckey really explained in the other place what Mr Dawkins's credibility is like . What is Senator Grimes's credibility like? He says that he was misquoted in the Financial Review.


Senator Grimes —I didn't say that at all.


Senator WALTERS —He said that he did not say what the Financial Review quoted him as saying.


Senator Grimes —I didn't. Read it again.


Senator WALTERS —I will read it again, with pleasure. I will read it from the dock. The article headed, 'No rise in super tax-PM' states:

The Prime Minister, Mr Hawke, has confirmed that there will be no increase in the tax rate for lump superannuation payments.

There had been considerable speculation that the Government intended to increase the rate after deciding to restrict the level of superannuation payouts for federal politicians.

A speech by the Minister for Social Security, Senator Grimes, to the National Economic Summit in which he referred to the tax advantage enjoyed by superannuation only seemed to fuel speculation.

Senator Grimes has since said that his comments were misinterpreted.

Mr Hawke said on Friday that comments he had made some weeks ago about the review of existing expenditure and taxation had been given a currency they did not deserve.

He said there was 'no basis' for the speculation that the Government intended to raise the 5 per cent tax on lump payments.

Mr Hawke privately told members of the ACTU last week that the Government would not move against the tax.

That article was written by Andrew McCathie of the Australian Financial Review.


Senator Grimes —Table it.


Senator WALTERS —I will have great pleasure, Mr Acting Deputy President, in tabling that information, as Senator Grimes has asked me to do. I seek leave to table the document.

Leave granted.


Senator WALTERS —Let us go on to yet another broken promise about which Senator Grimes is concerned-the promise to establish an office of aged care. As I have said, it is all rhetoric. Has Senator Grimes established an office of aged care? I have heard him promise it many times. Obviously he has not given any explanation as to why he has not done so. During many committee hearings we have talked about the proposed office of aged care. The pensioners have looked forward to its establishment. But nothing but a tremendous silence has come from the Minister in this regard.

There is not a great deal more that I need to say. The Minister is obviously very sensitive about the fact that he has been caught promising things that have not come about and things that were not going to happen but that happened a short time later. It behoves him to get up at the completion of the debate on this motion moved by Senator Messner and explain the actions not only of himself but also of the Government that he represents in this place.