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Wednesday, 3 October 1984
Page: 1121

Senator GILES(3.43) — We are debating this afternoon a matter of public importance, the first part of which reads: 'The Hawke Labor Government's revised assets test', which I agree is a matter of public importance. But the second part rather spoils the effect when it goes on to state, 'which continues its attack upon the retirement security of aged Australians'. I take up initially the final point made by the previous speaker, Senator Messner, who insists that this Government is treating non-earners in this community as pariahs. Of course, that is totally incorrect. What we have seen over the last 18 months is strenuous attempts by this Government to try to overcome the years and years of neglect of the previous conservative Government which did not treat its elderly, its non-earners and its other disadvantaged as pariahs; it just shelved them and refused to face up to the very serious problems that were developing in the community.

Over those years we asked, as members of the Opposition, time and time again what was to be done about the increasing evidence of rorting of the social security system, the amazingly contrived arrangements that were being perpetrated by insurance and other financial institutions around the nation to persuade elderly people to avoid declaring income over those years by placing what in many cases were small amounts of capital in non-interest bearing accounts. This was becoming a scandal and the previous Government was simply unprepared to do anything about it. Perhaps we have not as yet hit on the perfect solution to these problems. But at least we are moving, at least we are facing up to these difficult questions, and at least we are trying to introduce some equity into the system. I say to Senator Messner that Claude Forell is not an orphan in believing that this policy is at least an improvement on the neglect and the head-in-the-sand attitude that was taken by the previous Government towards this problem. There was an inevitability about the fact that some action would have to be taken. It needed a government with some intestinal fortitude to take it. The needs criteria had been agreed between the two main parties. They were issues on which we never argued. But the means by which needs could be identified and by which justice could be introduced into the system have certainly been a matter of severe disagreement over the years.

We have seen, of course, a greatly escalated demand on governments of all complexions for income maintenance; not only for pensioners of course, but also for other people in the community who depend upon the Government for the maintenance of their standards of living. I do not believe, as has been suggested by Senator Messner, that there is something scandalous, something immoral or something not quite right or just about depending on the Government for income maintenance. It is a matter which is considered to be one of the central tenets of social justice, surely, that those who are unable to support themselves, to maintain a dignified standard of living as a result of their own efforts, should be assisted to do so by governments.

Over the last 40 or 50 years we have seen a great change in what is known in Australia as the dependency ratio. In fact it is members of that group within the community who are very largely dependent on governments and the philosophies of particular governments for the standard at which they will live, the standard of education they will receive as young people, the standard of income maintenance they will experience when they reach old age, when they become invalids or are for some other reason unable to contribute to the economy of the country. Projections were made for Australia during the Borrie National Population Inquiry about what this dependency ratio might be during the next few years. It is a matter for debate, I suppose, as to how the dependency ratio should be actually equated. But the usual and accepted method on the whole is to add the percentages of that group in the population whose members are under 14 years of age and the other group in the population whose members are over the age of 65 years.

The projections indicate that the numbers of those aged over 65 will rise very slowly as a percentage of the population, from 9.6 per cent in 1981 to 11 per cent in 2001-not a very dramatic increase when one looks at what has actually happened over the last 20 years. For example, in 1966 the dependent age ratio was 61.25 per cent, which was not even as high as in 1961 when the dependent age ratio was 63.46 per cent. At this stage we can look at a dependent age ratio of about 52 per cent, which will drop over the next few years as a result mainly of the fairly low birth rate during the late 1960s and 1970s and the very low birth rate during the late 1920s, 1930s and the early 1940s. So the dependent age ratio which exists now of about 53 per cent will still be only about 53 per cent in the year 2021.

The implication of this, of course, is that we do not as a nation have a great deal to fear in regard to our economic resources in relation to the standard of living that we can guarantee to the aged people in our community over those years. In fact the period in which there was a very marked escalation in the number of aged people as a proportion of the population was during the 1960s. As far as very old people are concerned, according to Professor Borrie, even in the year 2031 the relation of young old people, that is, old people between the ages of 65 and 75, to old old people, that is, those over the age of 75, will be 64: 36; a negligible change from the ratio today which is 65:35. Of course, what we see with the aging of the population is a greatly increased level of activity and a higher level of health generally amongst aged people.

I am sure there are many honourable senators here this afternoon who have every intention, as I have, of becoming a very healthy 80-year-old, in not too many years time. Of course, our insistence on a decent method of administering pensions in this country is not simply a matter of cost; it is a matter of equity between particular groups in the population who have a claim, and we believe a thoroughly justified claim, on the public purse. As I have said, this is a matter which has the agreement not only of the majority of educated and thoughtful writers commenting on the assets test but also of a great number of pensioners, both individuals and pensioner associations, who are very well aware of the fact that there have been manipulations of assets over the years that simply are not available to the vast majority of pensioners who have nothing to live on except their age or invalid pensions.

I am grateful for the opportunity this afternoon to air this matter, especially in view of the fact that this debate is being broadcast, because I believe it is an opportunity to provide some light and some accurate information for those people in the community who have been seriously misled, and very deliberately misled I believe, over the period since we started seriously discussing the necessity and the desirability of introducing an assets test. I believe that the very modesty of the recoupment that we expect immediately is evidence of this Government's bona fides in its approach to the issue. We have acknowledged all along that the direct savings will be relatively small, perhaps in the vicinity of only $50m in the first year, and will of course affect only the pensions of a very small percentage of aged people.

However, other implications of introducing this assets test go back to those issues that I discussed earlier in relation to equity, the fact that it will affect very few pensions. I believe the Department of Veterans' Affairs was able to show exactly how the system could be engineered by people who had means, and significant means, and who were able to dispose of those means so that there was no apparent income from them. They had the advantage of those means, as would their families subsequently, without any effect on their pensions. However, the principle of a social wage or a social income applies just as much to the aged as to any other group in the community. It is a principle which, in addition to making certain to the extent it is possible that pensions and other income supplements from the Government are set at economically feasible levels, also provides to the extent that it is possible a decent and dignified standard of living.

Actual incomes are not the only way in which governments can greatly enhance the quality of life of particular groups in the community. Measures that have already been taken by the Labor Government have made great differences, for example, to the level of inflation. Of course, this is of grave concern to the elderly who live only on pensions and who are concerned greatly at the price of staple items such as food and clothing that they must buy out of those pensions.

Surely the fact that interest rates have come down must affect not only young people in the community and those of middle age who are still buying homes but also at least some pensioners who have been forced to borrow money in order to buy necessities and in whose interests the lower interest rates certainly operate. Our concern to provide housing for all of the lower income sectors of the community must surely also be an advantage to aged people. Our great concern to increase the stock of public housing-a stock which was allowed to fall in a quite catastrophic and scandalous manner during the last 7 or 8 years-is another matter which is of considerable and crucial importance to many pensioners. Despite Senator Messner's lack of acknowledgment of this fact, a recent meeting of Ministers for Social Security, Health, and Veterans' Affairs announced a major program to which the Commonwealth will contribute $300m over the first three years, a not inconsiderable amount, and one which it is rather difficult to ignore. This amount will be substantially increased when the State and Territory contributions are included as they maintain their commitment to the programs.

Of course, community care under existing cost-share programs is contributed to by State and Territory governments as well as the Federal Government, but has been lacking badly in some States. Like housing, over the last eight years community services have not increased to anywhere near a level which would provide access to them for more than the current small proportion of the aged community. This package of measures being introduced under our home and community care program includes expansion of existing services to the aged at home, delivered meals, home maintenance, home nursing and paramedical services. Additional services which will be considered for funding include personal care, transport, linen and laundry services and community based respite care. There are already models for all these measures which are humane and efficient methods by which the quality of life for the aged can be substantially enhanced within the home and which add to the range of options available to the elderly and to their carers who may be in need of regular or occasional assistance.

Total government spending on general home care services in 1984-85 will rise to over $90m, an increase of nearly 50 per cent. Measures of great importance to significant groups and individuals amongst the aged include an increase of 10 per cent in recurrent subsidies to approved hostels for the frail aged and an increase in the respite care subsidy to approved hostels. There will also be assistance with bed retention fees in nursing homes to keep beds for patients who are temporarily absent and to provide for admission to those beds of aged who can be cared for at home but whose carers are in need of respite, or those aged who need only a few days or weeks of nursing in the sense of constant trained attention.

These initiatives will go a long way to ensuring peace of mind. They are measures the need for which should have been obvious to the previous Government but about which no action was taken. Hostels caring for elderly patients with dementia, Alzheimer's disease, as referred to by Senator Messner, are to receive increased special assistance. This should avoid the necessity for at least some of the substantial proportion of aged suffering from this disease to be admitted to nursing homes simply because of the extra supervision and security that they need.

The home community care program will also involve the development of inquiry and information services within the Department of Health. These services, in conjunction with the development of assessment teams, will ensure that elderly people receive services appropriate to their needs and to their preferences.

I will return briefly to the assets test and the criticism that has been made of it by the Opposition and by other people in the community who simply cannot or will not understand what is being advocated and how we will implement it. I think I can do no better than to quote briefly an excellent article by Philippa Smith, published in the Sun Herald on 30 September, headlined: 'And now to fill in the assets test form'. It is simply stated, and I strongly advocate that people who are still feeling puzzled or worried about the assets test should try to get hold of this article. I will quote as much as I can in the time that is left to me.

Senator Martin —What is the source?

Senator GILES —The Sun-Herald of 30 September, an article by Philippa Smith. It states:

From November information about the assets test will be sent to all pensioners in Australia.

There will be two sets of information and forms.

The first will go to 85 per cent of pensioners, and gives details of the test and the threshold limits. It will have to be completed only--

I repeat, only-

if the pensioner believes that his or her assets are over the threshold.

If not the pensioner is advised to 'do nothing' and the pension will continue uninterrupted. If the amount is over the threshold they are asked to request an assets test statement form.

About 300,000-or 15 per cent-of pensioners will be asked to complete and return a four-page statement of assets.

At first glance the form may appear a little daunting, but it has been designed to lead the pensioner through each question step by step. The forms have been redesigned and simplified after market research and consultation with pensioner groups. As one pensioner said 'all forms are bad-but this one is better than most'.

The department said its decision to have this two-pronged approach was designed to reduce the intrusiveness and the numbers of people who need be worried by filling in the forms.

The 15 per cent who will be asked to fill in the assets statement form have been identified by the following criteria:

Pensioner homeowners who receive income from real estate holdings:

. . . .

and pensioner non-homeowners who receive income from real estate . . .

In conclusion, I do not think I can do better than quote a pensioner who, when asked 'How do you, personally, feel about the proposed changes?' replied 'The only thing I have to worry about is that if I had the money I would worry. I don 't have any assets to worry about now'. In that respect that pensioner is very similar to the vast majority of pensioners in Australia today.