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Monday, 10 September 1984
Page: 727

Senator CROWLEY(6.14) —Today we are addressing the Social Security and Repatriation (Budget Measures and Assets Test) Bill 1984 which is almost in the nature of an omnibus Bill or a bracketing together of Bills. It addresses special provisions in the Budget for pensioners, increases in pensions and benefits, initiatives for unemployed people, assistance for private rentals, assistance for pensioners, beneficiaries and low income families with children, changes in the Repatriation Act to increase pensions and allowances for repatriation service pensioners and the commonly mentioned assets tests. All of these measures are very much in support of this Government's Budget commitment to maintain the contribution for those people in our community most in need; that is, those people we call poor. Of course, the poor people in this community include very large numbers of pensioners. In the Budget Papers it was announced quite clearly that the social welfare package will cost $430m in 1984-85 and $ 683m in a full year over and above the normal indexation arrangements.

The Government was faced with the real and continuing challenge of reducing the deficit it inherited when it came to government and at the same time trying to address some of the initiatives on which this Government went to the people and was elected. How does one reduce the deficit and still maintain gains for the community? In fact in this Budget how was one to maintain the gains that were put under way in last year's Budget, with other economic and fiscal measures taken by the Government at other than the Budget time? I think that the Government has achieved a very balanced Budget and a considerable contribution in the areas mentioned in this Bill. The deficit estimate for this year is $6.7 billion-a huge reduction on the deficit last year. While the Government has reduced the deficit, it has also reduced inflation by nearly half-from 11.5 per cent to 6.5 per cent-and it has brought down interest rates and seen the creation of 270,000 jobs; in fact by now probably a higher number of jobs than that.

Other steps taken by the Government are more specifically addressed by the many parts of this Bill. First, there will be a special increase in the basic rate of all indexed pensions and benefits for single people and married couples. The increase will be $2.50 for single pensioners and $4.20 for married pensioners; that is, the pension will now be up to 23.8 per cent of average weekly earnings. That is certainly not as far as the Government's stated aim of 25 per cent of average weekly earnings but it is an improvement on last year and it is part of the Government's promise to move to 25 per cent. It acknowledges that it has not been able to do that at one stroke.

The other thing that we must remember at this time is that in 1982 pensions had fallen to 22 per cent of average weekly earnings. When the Labor Government went out of office in 1975 pensions were 24.5 per cent of average weekly earnings. We saw an erosion of the pension as a percentage of average weekly earnings over the seven years of the Fraser Government, down to 22 per cent in 1982. This Government has to reclaim those losses but it cannot do it all at one time. It acknowledges that the 23.8 per cent that pensions now are of average weekly earnings is short of its stated aim of 25 per cent, but it is an improvement and it is part of the Government's promise to move to 25 per cent. It admits that it cannot do that in one year.

Another area of importance was alluded to by Professor Gruen and is well acknowledged; that is, the particular difficulties for people on pensions who live in private rented accommodation. I will just draw the Senate's attention to the assistance provided for renters. It is well spelt out by the Minister for Social Security (Senator Grimes) in his second reading speech. It states:

Rent assistance is available for pensioners, supporting parent beneficiaries and long term sickness beneficiaries (that is, those of 6 or more weeks standing ) who have little or no income apart from the pension or benefit and pay private rent or lodging.

The maximum rate of payment was up to $10 a week prior to this Budget. But in recognition of the particular difficulties faced by people forced into the private rental market, the Government has increased rental assistance by 50 per cent to $15 a week, and this measure will be introduced from November 1984. I will not tabulate all the specific gains under this Bill, but I think it is important to allude to the rental assistance for those people on pensions who rent in the private rental market. One hopes that the increase in rental assistance will not be matched by an increase in rent charged. This is a problem that governments have faced in addressing this issue but hopefully the increased assistance to pensioners for private rental assistance will be of benefit because it will not be matched by an increase in the amount of rent.

I turn now to the assets test. It is important to note that there has been very wide support in the community for its introduction. Senator Chaney alluded to the Government being prepared to introduce an assets test so as to keep business happy. I think that is a fairly sour way of acknowledging the support from the business community for the assets test. The West Australian of 9 June 1984 stated:

The Confederation of Australian Industry said yesterday it supported the Government tackling the problem of means-testing welfare.

The article goes on to say:

Earlier this week the Prime Minister, Mr Hawke, revealed that the chief executive of Elders-IXL, Mr John Elliott-who is also Victorian treasurer of the Liberal Party-had congratulated the Government on introducing an assets test.

The CAI, the article states, had gone on to say:

There was no realistic option apart from means testing to ensure that welfare spending was provided to those in genuine need.

The CAI gives support in principle to the Government for tackling this unavoidable and increasingly urgent issue.

The article does not explain at great length that the CAI and Mr Elliott were pleased that the assets test was introduced because it would be a boon for business, and I do not believe that that would be the only or a limited way they would understand it. The situation has been more clearly spelled out for us in an article in the Australian, again on 9 June, by Alexander Downer, who has since won pre-selection in South Australia for a Federal seat likely to be won by a Liberal. It is very nice to have a prospective incoming Liberal saying the following:

The Government is absolutely right in introducing an assets test.

* * * *

The Government has had the courage to address that issue.

* * * *

The consequences of this have been the redistribution of economic resources away from the areas such as investment, profit and wages, which are the catalyst for economic growth to a public sector which consumes the prosperity created by others.

He argues very nicely about the increase in the number of people who are aged and who will be in the aged category by the year 2000. He also refers to the increased expenditure required by welfare to provide income support for people in that category. He also points to the fact that if revenue is distributed away from support for business and productivity in the community simply to security payments, there will be a loss for the whole community. One does not argue with that. One is pleased to find a member of the Liberal Party and perhaps a prospective Liberal member of the Parliament very much acknowledging that and acknowledging too the courage of the Government in taking steps to introduce its own assets test.

Of course, it is necessary to have encouragement for business. This Government' s Budget is unashamedly good evidence of that. Not only have we put some $430m this year into social welfare payments over and above what was expected but also there has been considerable encouragement for industry precisely because the encouragement and improvement for investment and industry in this country are part of the reason we have seen some 270,000 jobs created. The very best way to reduce welfare payments is to have people at work, not only not drawing unemployment benefits but also contributing to general revenue through the taxes they pay.

I am surprised that Senator Chaney, who ought to know better, is trying to lead to the public of Australia today such a simplistic and puerile analysis. The rest of us, including Mr Downer, have a subtler approach to it all. I was also interested in the reason for which Senator Chaney reckons that the Government has introduced the assets test. He argued that it is an administrative nightmare , that it would not return terribly much money and then he proceeded to argue very nicely that it would in fact recoup $50m for the Government in the next financial year. He proceeded to say that this is a drop in the welfare bucket. I presume Senator Chaney is not asking the people of Australia to abandon $50m that can be redistributed to those more in need, particularly if we are taking it from those who have less need. But the Government has made it quite clear and Senator Grimes in this place, particularly in his second reading speech, made it quite clear that the assets test was introduced for another reason besides fairness, equity and possible redistribution qualities. He said:

It is time for us all to recognise that the real issue is not whether we should have an assets test, but what is the fairest and best form of assets test.

I entirely concur with that. It has been so well argued by the Government before . There really is not any dispute about whether we should have an assets test, and I am surprised that the Opposition should argue it at all. The question is: What sort of assets test? So the Opposition is actually arguing about whether there should be a limit of $100,000 or whether a pensioner's house should be included. More importantly, though, the Opposition does not address the other important reasons for introducing an assets test. That again was spelled out very well by Senator Grimes, who said:

Inevitably, the absence of an assets test provided greater opportunities for the circumvention of the income test. Avoidance schemes are now widely available and readily accessible. If no steps are taken to discourage the proliferation of these schemes basic inequities are increased, resources are mis-directed and public confidence in the pension system is undermined.

A point which needs to be recalled and people need to be reminded of very often- the Opposition certainly does although I think it is beyond its comprehension-is that the people in the community know very well that one of the other reasons we need an assets test is to prevent the rorting of the system that has been happening since the previous Government took away the assets test in 1976. This point was made very well by Minister Blewett in the House of Representatives when he said that the equity part is not the only object of the assets test, perhaps not even the prime object. He said that what is most important, as everyone knows, including even the honourable member for Mackellar, is that the assets test has been introduced to prevent the widespread abuse and avoidance that was happening since the previous assets test had been lifted. That abuse is one of the fundamental flaws in the system without an assets test. The Minister continues:

As a result, many pensioners who have the resources to provide for their own retirement end up getting a pension subsidy. Therefore, savings are not the main issue. They are an important issue, but they are not the main one.

We have had a rorting of the system, inequitable gains to people who did not need them and a loss of assistance to those who are most in need. Members of the Government have addressed this issue fairly honourably and some of the Opposition members, to give them their due, have been reasonable about it. Some in particular-I refer to the splendid man from Tasmania-have been positively disgraceful and any of the scaremongering and fearmongering tactics of the Opposition should be laid to rest.

Again and again Minister Grimes has said that claims about gold fillings being assessed or people knocking on doors-storm troopers as has been said-invading pensioners' homes are quite wrong-very misleading and do create fear and anxiety in elderly people, every one of whom has absolutely no need to be fearful of the assets test. Certainly no one need fear storm troopers or that gold fillings will be assessed. Such arguments are quite revolting and no honourable members or honourable senators ought reduce themselves to that level of debate. The facts are what people need. We should not have dishonourable lies and scaremongering. We have seen examples reported in the papers recently of very anxious pensioners who have withdrawn their assets, and in one case a pensioner had the horrible experience of those assets being stolen. Again, I think that that is a direct consequence of the scaremongering of some of the Opposition members. I think it is a disgrace.

Sitting suspended from 6.30 to 8 p.m.

Senator CROWLEY —I seek leave to continue my remarks later.

Leave granted; debate adjourned.