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Monday, 10 September 1984
Page: 698

Senator GRIMES —Today in Question Time Senator Walters asked me a question-and I think Senator Messner asked a question of my colleague Senator Button-about some figures produced by the Parliamentary Library on the tax liability of pensioners . I think it is worth while to give a preliminary answer. Of course, some pensioners under the existing scheme will have their tax liability increased. But I point out that what is important to pensioners is their disposable income. Their tax liability will be increased because they get more pension and more income, but the disposable income, using the example given by Senator Messner- the single pensioner with $20 a week of private income- increased by 13.1 per cent between 1982-83 and 1984-85. One may ask whether Senator Messner and the Opposition would prefer that we did not provide pension indexation or the $2.50 a week pension increase so that pensioners did not have to pay any additional tax.

As I pointed out in my previous answer, a non-pensioner with an income of $5, 811 in 1984-85-that is, the pension plus $20 a week-pays more tax than a pensioner with such an income because of the existence of the pensioner tax rebate of $250. This gives special tax treatment to pensioners and its primary purpose is to ensure that maximum rate pensioners with no private income do not have to pay tax. This, of course, is the case. In this year's Budget the Government increased the level of income at which the special rebate begins to shade out from $5,428 to $5,534. This will be of benefit to a significant number of pensioners, including the cases brought forward by Senator Messner. Of course , other measures have been taken to introduce rebates for unemployment, sickness and special beneficiaries to ensure that maximum rate beneficiaries in those cases would not have to pay tax. The maximum rate beneficiaries who receive no private income and who receive supplementary allowances and additional benefits for children were required to pay tax under the previous Government. It did nothing about them when it introduced the pensoner tax rebate. We did something about them last year and this year and we will continue to do so and to ensure that pensioners receive real increases in disposable income each year.