Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 10 September 1984
Page: 741

Senator WALTERS(9.12) —Tonight we are discussing the Social Security and Repatriation (Budget Measures and Assets Test) Bill 1984. The prime purpose of this Bill is the implementation of the assets test. However, before I get on to the assets test, I wish to say just a few words about the proposed increase in age pensions. We all know about the promises that the Prime Minister, Mr Hawke, made before he came to government. Senator Sir John Carrick has also talked about them. We all remember that election in March when he said with a grand flourish: 'We will not touch the pension cheques of age pensioners. We will not touch their superannuation'. Letters were sent to us here in the Parliament from several groups of superannuants saying that they had received a reply from the Prime Minister prior to the election promising that he would not touch superannuation payments. He also promised to raise the age pension to 25 per cent of average weekly earnings. He also promised that pensions would be adjusted six-monthly so that there would not be a lapse of four months on the immediate six months consumer price index-the lapse to which pensioners objected so much. He also promised that there would be an office of aged care. They were lavish promises. Indeed, when he was making these promises the Prime Minister said:

. . . I am not in the business, and the Labor Party is not in the business, of making promises that cannot be fulfilled.

The sensible thing to do, he said, was to make sure that your commitments do not have to be broken. They were fine words. We all remember them very well. I am sure that pensioners particularly remember those words because they believed that he meant what he said. This is the man who says that his credibility is high. This is the man who says: 'People know me. They can trust my word.'. Can they trust his word? There would not be an Australian left who regards that man with any credibility, who would trust his word again.

He promised to raise pensions to 25 per cent of the average weekly wage in his first Parliament. How much did he raise them in this Budget? The Prime Minister tells us very clearly that he is going to an election between now and March so there will not be another Budget. What did he do in his final Budget? In fact he raised the pension by 35c because the other $2.15, as pensioners well know, combats the Medicare fiddle. Senator Sir John Carrick explained that Medicare fiddle very clearly to us tonight. So pensioners are left with a 35c increase in their pension towards the 25 per cent of average weekly earnings that they were promised. A pension equivalent to 25 per cent of average weekly earnings would have meant an increase of $4.25, not 35c, so we can well understand why the pensioners will never trust that man again.

What is that 35c to cover? That 35c now covers the indexed sales tax on petrol, cigarettes and beer. After the Budget came out, someone said to me: 'I suppose I can put up with the 10 per cent tax on wine because at least he has not touched cigarettes and beer'. What a hoax! What a con! Rather than increase taxes on petrol, beer and cigarettes at Budget time and collect the odium that results, this man indexed them to rise every six months so that people are unaware of it and so that come Budget time they say: 'I can put up with the wine tax because at least he has not raised taxes on cigarettes, petrol and beer'. What a con!

But the Prime Minister did say-and everyone will remember it very clearly-that he would not touch pensions. Honourable senators will remember that before the election Mr Fraser said: 'People will be better off with their money under their beds'. Honourable senators will remember the derision which arose from that statement, which we all know so well has proved so accurate. Pensioners would be far better off with their money under their beds because this man has taken it from their pension cheques.

What has the Hawke Government done to pensioners over 70 years of age since it came to power? It took a lousy $52 a week from those pensioners. They were no longer means tested. He said: 'I am going to means test the lot' and took a lousy $52 a week from pensioners aged over 70. It would have been so easy for Mr Hawke and this Government to have said: 'From now on anyone who turns 70 will be means tested'. But no, he said: 'We will go back and take it from them'. This upset the planning of every pensioner over 70 who was not means tested. Every pensioner aged 70 or over who was collecting that $52 and was not meanst tested was affected in planning for the rest of their lives. As I have said in this place before, their sons had organised their financial arrangements. Many pensioners had to alter their place of living so that they could cope with their financial arrangements when that $52 was taken back by the Government.

Why were those promises broken? What excuse could Mr Hawke and the Labor Government give for all these broken promises? We were told a cock and bull story about a $7.6 billion deficit that was supposed to have been left by the previous Government. The story was told so well, so thoroughly and so repeatedly by this honest Prime Minister that his own back benchers and new candidates believed him. Senator Cook came into this place and said that in the 1982-83 financial year the previous Government had left a $9.6 billion deficit. When pulled up by honourable senators on this side of the House he was forced to come back into the Senate and apologise, saying he had made a dreadful mistake. The figure he quoted was not the deficit that was left by the previous Government because it left a deficit of $4.5m, not $9.6m. Senator Cook had swallowed the brainwashing so thoroughly that as a new candidate he gobbled it all up and after being elected he came into this House and tried to put the story across.

The biggest lie of all time was perpetrated on the people of Australia. As a result the people of Australia thought that it was necessary for the Government to break its promises, but they are now waking up to the fact that this Prime Minister can no longer be trusted. We have the situation that the family allowance and the dependent spouse rebate have not been increased since the Australian Labor Party came to power. That shows how it cares for the traditional family. It has increased spending on the dependent spouse rebate to include de factos, but it has not increased that rebate since it has been in power. As a result the value of the dependent spouse rebate has gone down by 10 1/2 per cent since the Government has been in office. The family allowance has also gone down by the same amount.

Perhaps it would be appropriate to deal now with the assets test, something which this Bill deals with. The assets test, according to Professor Gruen, who was one of its architects, could also be classed as including death duties. When he was told that this pay as you die scheme that the Government has brought in could be classed as death duties, he did not resile from that and said: 'You can call it that if you like'. It did not worry him because he believed in death duties and thought this measure most appropriate. Pensioners will be paying gift tax and they will be the only section in the community that is not allowed to give its children gifts. They are also the only group in the community that has to pay death duties and that will be fully taxed-double taxed-on lump sums. We have gone through Mark I and Mark II and we are now up to Mark III of the assets test. We all remember the lovely proposal relating to antiques, holiday homes, yachts and cars that the Government tried to bring in. After Senator Grimes introduced that measure, we all remember Mr Hawke, speaking at the Press Club in front of television cameras, saying-before he had told his Ministers-that this measure was all a mistake, that Senator Grimes had done a terrible thing, that it was all so unjust that he would change it all and he would get a committee to look at it.

Senator Crowley stood up here today and said: 'Yes, of course there are some inequalities in the system. I am not suggesting it is all perfect; there are just a few inequalities'. That is all very well if one is not affected by such inequialities and if one is on the right side. But for a person on whom such inequalities have been perpetrated, it does not do much good to have Government members saying: 'Of course there are a few inequalities. So what? You cannot have a system without them'. Yes, we can have a system without them. That was why we dropped the assets test.

The simple inequality at the moment is that anyone can own a home of any value and have the same amount of money as any other person in other assets. Senator Crowley said not many people own a home worth $1m. Let us bring it down a little ; let us cut it in half. A pensioner could have a home worth $400,000 or worth $ 500,000 and other assets worth $100,000 if married or worth $70,000 if single. Such a person is treated in exactly the same way as are people with a modest home worth $40,000 and the same $100,000 or $70,000 worth of assets. Those are simple inequalities, but there are many others. I will give one example that was brought to our notice by the Business Review Weekly. There are some very interesting articles covering many pages in the Business Review Weekly that I am sure Government members would be interested in reading. One article states in part:

Mr and Mrs D, in their late 60s, own their family home and have other assets valued at $140,000. Of this, $100,000 worth of investments earn $10,400 a year, or $200 a week. Under the income test--

that is, the present one-

the couple is entitled to a weekly pension of $78.30.

Under the assets test, they are entitled to $73.30 a week. They decide to sell the family home and move into a luxury high-rise apartment, which costs $25,000 more than the proceeds of the sale of their family home. To finance this, they liquidate $25,000 of their income-earning assets. On the remaining $75,000 they earn $150 a week.

Under the income test, the couple's weekly pension entitlement is $103.30. Under the assets test, the weekly entitlement, given non-principal home assets of $115,000 would be: $119.10, and so does not apply.

There are many inequalities in this new scheme, and it is time the Government and its Department had a good look at them and did not just brush them off by saying: 'The inequalities will not affect terribly many people. The majority of the people will be all right. The inequalities must exist. We must have inequalities because we cannot come up with a scheme that will be equal all round'.

What is the Government saving the taxpayers out of all this? We have already heard that last year while it muddled through mark I and mark II of the assets test it spent $25m. It was all wasted. The Government employed people who are no longer required. It sent out all sorts of pamphlets which are no longer required . This year, the first year of the implementation of the assets test, it is not saving the taxpayers a bean. It will cost them $30m. So we have $55m in costs so far. What will that save us in the long run? We are told it will save us $60m in the third year at a cost of $55m. By gee, that is good business! That is really good business for a socialist government! Is the cost to people, the cost of sacrifice, the cost of suffering and the cost of planning all worth that $55m? I will finalise my comments by saying that the Business Review Weekly states:

. . . if the bill becomes law, it will etch its way into the entire social fabric of the nation and change not only the way we think about lump sums in retirement, but also the way companies and businesses arrange their superannuation. In addition, if we want to retain fairness in our socieity, it will cause us to look at the way we give public servants a lot more than most others when it comes to retirement . . . the assets test has been structured to effectively become a tax of lump sums by a different name.

It will cause governments to have a look to see why we give public servants a lot more than we give most others when it comes to retirement. It is because of this inequality that the Opposition will not support this Bill.