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Wednesday, 24 October 1984
Page: 2297


Senator MESSNER(11.30) —I note that Senator Cook is particularly interested in the polls. I am not sure that he has seen today's Bulletin poll but it shows a decline in the Labor vote to about 50 per cent-a 5 per cent drop. No doubt he has a good reason to understand why that has happened . I want to address myself to the expenditure of the Department of Social Security. In particular I refer to an interesting exchange between myself, Senator Walters and the Minister for Social Security, Senator Grimes, during the course of the Estimates committees on matters relating to invalid pensions. It was revealed during the course of the Estimates committees that there had been an increase in the numbers of invalid pensions granted by the Government-a significant increase of some 40,000 since April 1983. This is reflected quite strongly in the Estimates this year in the Budget Papers in which we see that one of the highest growing areas of expenditure by the Federal Government is invalid pensions and allowances. We see that the expenditure for the year ended June 1985 will be $1,466m compared with an actual payment in the 1984 financial year of $1,252.7m-in other words, an increase of $213m, or about 17 per cent over the previous year. That is a very substantial increase-one of the highest rating increases in any area of social security expenditure in the current year' s Budget. I naturally exclude those items for which, because of the relatively small absolute amounts of money being spent, any rise at all registers very highly in percentage terms. But excluding those items, this is one of the fastest growing areas of Government expenditure.

Clearly the Government over the last 18 months, since it came to office, has been trying to demonstrate how responsible it is in cutting back expenditure, particularly in the area of social security. It has been making great play about its actions. The assets test, the over-70s income test and the lump sum superannuation tax have all been designed to try to cut back on social security expenditure. Government members have been saying: 'How responsible are we? We are making sure that the aged today will pay so that we will be able to spend more on the poor and needy.' Perhaps they are doing that but the area in which they have been spending the most is the area of invalid pensions. This merely represents a transfer from one category to another say from the unemployment benefit to invalid pensions. The point has to be made that in the area of invalid pensions the administrative decisions are made by the Government. It has total control. This emerged very clearly during the course of investigations by the Estimates committees. We discussed the matter with the Minister, Senator Grimes, and I asked him why it was that in the State of New South Wales there had been a very rapid growth in he granting of invalid pensions. When I made the point that doctors in New South Wales apparently had been acting rather more generously in granting invalid pensions than in the past, Senator Grimes said, at page 193 of the Hansard of Estimates Committee B:

One of the problems that arose was that the CMOs-it is no good beating about the bush on this-were rejecting large numbers of cases and the Administrative Appeals Tribunal was overturning the decisions of the CMOs.

Senator Grimes made the point that clearly the Commonwealth medical officers who had responsibility for making decisions in this area had been making them and subsequently having them overturned. During the course of this exchange I asked the Minister whether he thought that doctors in New South Wales were being a bit hard on people. He agreed that he thought they had. He also then made the further point that he had given instructions that in fact they should be more lenient in granting invalid pensions. I make the point that this is a direct intervention of the Minister in causing an increase in social security expenditure. It is in an area in which there has been no action nominated on the part of the Government; nor has it been made clear in any policy statement of the Labor Party that in fact this was intended. It seems to me to be rather strange that the Government is prepared to do this kind of thing while at the same time it is not prepared to impose great sanctions on the vast social security frauds that have been evidenced in recent times in television programs and in other places. At the same time, it imposes great burdens on the aged in Australia's population who in recent days have been inundated with forms in connection with the assets test. These kinds of actions on the part of the Government appear to be contradictory or, at the very least, without thought. We fail to understand how the Government can say that it is heading in one direction when it is actually achieving the direct opposite by increasing social security expenditure by its own decision.

In the course of the discussions in the Estimates Committee the Minister, Senator Grimes, told us that many of the decisions in relation to invalid pensions that were made by Commonwealth medical officers were being overturned on appeal to the Social Security Appeals Tribunal or to the Administrative Appeals Tribunal. We then asked whether the Minister would provide us with statistics on this to demonstrate what was happening. With the Estimates papers we were sent a table which shows the numbers of invalid pension medical appeals conceded or upheld in the last three years. I will cite these figures as they are of interest in this context. In 1981-82 the total number was 3,467. That rose very sharply in the next year, 1982-83, to 4,917. So far, that seems to justify the Minister's argument that there had been a very big rise in the number of appeals passing through the various tribunals. But in the next year, the first year of the Labor Government, 1983-84, that number had dropped to 3, 299, less than the number that had applied in the 1981-82 year. The question that seems to be begging to be answered is: If there has been a substantial fall in the number of appeals conceded, why does the Minister see it as necessary to instruct the medical officers in the Department of Health and the Department of Social Security to be more liberal in their approach to granting invalid pensions? The two things do not seem to hang together. I wonder why the Minister deemed it necessary to take the action that he has. He has given us the basic, blanket statement that most of the decisions by Commonwealth medical officers to refuse applications were overturned on appeal, but I do not understand on the figures why or how it is that he can justify the action that he has taken.

The assets test generally is a matter of very great interest to the community at the moment because of the huge tide of information-seeking forms that have been flooding into pensioners' postboxes in recent days. The reaction that it is causing in the community is one of great concern and very great confusion. It is quite clear from the information that is flowing into our offices as members of the Liberal and National parties that it is not so much the people who have just recently retired who are the ones most affected by this proposal. It is not the ones who have been retired even for a short period, such as two or five years. It is those people who are approaching their final years, those well into their eighties, who find a great deal of difficulty in coping with this enormous bureaucratic form filling system that has been thrust upon them.

There is absolutely no doubt in my mind that that group is the group that will be most affected as a result of the introduction of the Labor Government's assets test. I make that point because over the last 18 months a great number of people have come to see me about the matter. Time and time again they are the people who through their lives have been thrifty, who have saved and have sought to look after themselves. They are now entering their eighties and because of their advanced aged and advancing frailty their situation demands some kind of alternative accommodation. They can no longer stay in the large family home, but need to move into a nursing home or perhaps into an elderly citizen's cottage. Frequently, people in these circumstances are widowed. They sell up their properties. In Sydney or Melbourne it is not too unreasonable to expect that people might get at least $100,000 or $120,000 for their homes. They have never been able to gain access to that amount of money through their working lives or their lives in retirement, but suddenly in their eighties they find that they have that amount of money coming to them. They buy access to a nursing home or to an elderly citizen's home for a much lower amount, perhaps $20,000 or $30,000 or thereabouts. Therefore, they have an investible surplus for the first time in their lives, at a time when left to their own devices they could at least live out their final years in some kind of comfort. But no, the Government now rolls along and says: 'Right, that extra money that came from the sale of your home will now be treated as an asset and you will be penalised and receive no future support from the Government by way of the pension'. These are the kinds of people who will be directly affected. They are not millionaires. They do not belong to Senator Gietzelt's list of 124 pension cheats. They are ordinary people who have reached the advanced stages of their lives and are being terrorised by this Government in their final years.


Senator Peter Baume —They want a fair go.


Senator MESSNER —Of course, all they are looking for is a fair go from this Government. That is what is so devastating to them. Before the election 18 months ago having been lured into the promise of better times ahead these people find themselves in terrible trouble as a result of having given their fate to the Hawke Labor Government. These people are faceless, silent and generally not active or organised. This group is suffering most at the hands of this Government. It is not comprised of millionaires; it is not comprised of people who are ripping off the system. These people will be most damaged by this Government's ill thought out activities. Apart from those effects, we must bear in mind the longer term arguments that are of devastating proportions for the future, but those matters have been canvassed long and hard on many occasions.

The advanced age group represents a real challenge to the Government in providing for the needy. The term 'needy' does not need to be defined in respect of how much money a person has in a bank account or otherwise, but by people's ability to look after themselves, their need for attendant care, nursing home care, hospice care or the general support of their families as well as in institutions, whether governmental or non-governmental. That is the real challenge that is ahead of us. The aging problem will not hit Australia like a typhoon in the twenty-first century, some 40 years away. The real problem of the aged is with us now. It involves that group of people who are living longer as a result of the advances of medical science; who are staying far longer than they did 20 or 30 years ago, and who therefore are in greater need of support. That is the challenge in looking after the aged that is with us now. It will not be dealt with by the kind of heartless action taken by the present Government which strips such people of their last semblance of dignity in the last years of their lives. The problem will not be solved in that way. In fact, such action can only worsen the problem and cause the aged more difficulties in their last years.

Let us examine alongside the problem of the aged, the combined effect of the introduction of Medicare. This Government promised that under Medicare pensioners would have free access to public hospitals and could obtain treatment whenever they wished. The reality is that in the State of Victoria, for example, some 8,000 people are awaiting elective surgery in the public hospitals. This is happening all over Australia. The number of people who cannot obtain services in public hospitals is growing rapidly as a result of the Government's mistaken introduction of Medicare. Those people who, quite naturally, in their last few years are concerned about their health and their ability to obtain rapid medical and hospital treatment, are finding that to cover their individual circumstances they have to abandon thoughts of any support from Medicare by taking out private health insurance.

I put the point clearly to the Minister for Veterans' Affairs (Senator Gietzelt ), who surely must see it. He must realise that those who have abandoned private health insurance in the last couple of years, following the Government's promises about Medicare, now find that they must return to private health insurance funds at a stage of their lives when it may be more difficult to prove that they qualify for health insurance under the rules of private funds. Many aged people are finding it difficult even to obtain such assistance. We must also consider the cost of the insurance itself, which must be considered on top of Medicare payments if a person in this position is paying the levy. At the core of the great disillusionment of many aged persons at their treatment by the present Government is their worry and concern about costs and other considerations.

These are the facts of life. They are not theoretical concepts. However, as we have already seen, the assets test is a theoretical concept. It will cost $55m to establish the scheme and this year $18m will be returned to the scheme. In other words, the Government is spending the money subscribed by taxes, including taxes from the poor in our community-namely a sum of $37m-to set up a bureaucratic machine to run the assets test. Is it any wonder that the Liberal and National parties see the need for the immediate removal of such a test. One of our first actions as soon as we are elected to government on 1 December, will be to remove the assets test from the statute book. That is at the core of our concern for the aged.

In our opinion, the Government has missed the point entirely as to where the problems of the aged lie. The Government is not paying attention to the most needy in the community. I emphasise that 'needy' does not necessarily mean 'poor '. It involves assisting people with services in such a way that they can obtain support in the latter years of their lives. This Government has no heart when it comes to that group of people. The Government is continuing its campaign of terror out there in the streets with the posting out in the last few days of a whole set of forms. Those forms lay down heavy penalties if people do not comply with them. That is the kind of procedure people will be forced to face up to in the next few weeks. The Government will have the ability to investigate the performance of individual pensioners in providing information in the forms; it will be able to chase up the details, obtain access to other information that is held by third parties.

One can imagine the feelings of persons in their eighties who have written their last wills and testaments and left them in the custody of a solicitor. During the life of a pensioner a solicitor will be forced to answer detailed and intimate questions relating to the finances of individuals before such people go to the grave. That is the kind of situation created by the Government's policies in this field. One cannot help being astounded that the Government cannot see the mess it is making in the minds of the community on this issue. I do not understand why it does not see the sense of the argument that the terror created in the community by the Government is not worth the candle. However, the Government in a misguided way presses on in search of some kind of mythical support from people who fail to understand the real needs of the community.

I wish to refer to one other matter. There is no doubt that the assets test as introduced is the first foot in the door, leading the way to some kind of assets test tax or savings tax which will be introduced by the Government if it is re- elected in December. The Minister for Social Security is now present in the chamber. He is the source of our greatest clue on this matter, by virtue of having said in Labor Essays of 1983 that if they wish to be consistent the Government and those who argue in favour of an assets test should be considering the introduction of a capital gains tax. Obviously the Government has this in mind if re-elected. One cannot logically be dissociated from the other and as a result the assets test will remain on the books. That is why the Government has refused to take it away. The Government knows that it is the first step in the plan to introduce higher taxes and other taxes aimed at destroying the accumulation of private capital.


Senator Jessop —Including a savings tax.


Senator MESSNER —Yes, a savings tax is coming in future, if the present Government is re-elected. People have the solution in their hands by making sure that they vote against the Labor Government and in favour of the Liberal and National parties at the election on 1 December. In regard to the capital gains taxes that may be proposed, I wish to make the point that somehow the myth is perpetuated that the present Government has not already introduced a capital gains tax. The most significant capital gains tax that has been introduced in the life of this Government is the tax on lump sum superannuation payments. That tax was announced within two months of the Government coming to office in March 1983. Having already given promises to the effect that it would not introduce any tax on lump sum superannuation, it did so immediately upon being elected.

The fact is that lump sum superannuation payments are in the same category of payments as goodwill. They are paid out upon retirement after a long period of service with an employer and are consequently in the category of severance payments in the same way as goodwill represents a payment when one sells a business such as a newsagency or a milk round. At the moment those kinds of payments are not subject to tax, although it will not be long, if Labor is re- elected, before they will be taxed. Yet people who have worked for 40 years or so to accumulate an amount of lump sum superannuation are subject to a capital gains tax on that amount. The rates are interesting. The present rate is 30 per cent but we recall very well that the first rates to apply when Labor announced its proposals on this kind of capital gains tax were to be as high as 60 per cent. That is what this Government is on about. It is gradually moving the tax system towards the introduction of greater taxation on people's savings. It is out to destroy people's independence. That is what Labor governments are all about. They want dependence. They want to create in people a sense of being absolutely reliant upon the Government rather than the reverse, which is to encourage people to be independent of government by building their own savings in such a way that they can look after themselves not only in retirement but also in other circumstances.

That is what is so important about the introduction of the Liberal Party's social security policies this week and the family tax package, which entails income tax splitting and child care rebates. This not only gives families choice but also encourages them to save for their own future. That is what Australians want. That is why they are opposed to what the Labor Party has been doing with its assets test, with the capital gains tax which it has introduced on lump sum superannuation and with the capital gains tax which it intends to introduce, if it is re-elected, on other people's savings as well. Those are the core arguments in this forthcoming election campaign and we on this side of the House -that is, the Liberal and National parties, because the Australian Democrats supported the assets test legislation-are opposed to the assets test. We will repeal that legislation. Indeed, it will be the first action that we will take upon our election to government.