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Friday, 22 February 1985
Page: 92

Senator GRIMES (Minister for Community Services)(3.39) —We are debating a matter of public importance brought forward to the Senate by Senator Messner under standing order 64, namely:

The growing alarm amongst all pensioners, particularly those in rural areas, at the unfair and uneven impact of the assets test legislation.

I take up a point raised by Senator Haines: When we were sitting around this morning speculating on what matters the Opposition might bring up in this first effective day of the Parliament we looked at the things that the Opposition has been making a lot of noise about in recent weeks. We looked at all sorts of controversies which have been in the editorials and the newspapers in recent weeks. We looked at all these sorts of things. I did not think, and I do not think anyone on this side of the House or even many people on the other side of the House this morning would have dreamed, that we were going to have a rerun of 1984 with Senator Messner getting up another version of his effort on the assets test. I suppose that is the reason that not only when I speak but also when the two previous speakers have spoken there has been only a handful of people in this place and, quite frankly, I do not blame those not here. They have heard it all before. They knew what Senator Messner was going to say. Senator Haines and I try to vary it a bit each time, but we know what Senator Messner will say. They all go away and do something sensible. Quite frankly, I do not blame them, and I do not blame members of the Press for ignoring Senator Messner's remarks, as they probably will. I suppose the best way one could start off in describing this extraordinary matter of public importance is by quoting the Press. Claude Forell, in an article in the Age last year, said:

The hysterical froth and fear and loathing whipped up against the Federal Government's assets test on pensions has been wondrous to behold. The campaign has been waged not so much by those with genuine concern for the poor and needy but politicians eager to garner votes.

Senator Haines is right: If we are to have a debate on poverty and inequity in this society, as we should do regularly in this place, the assets test is about the last thing we should bring up to discuss. Even I on the Government side, with my necessity to defend Government actions and everything else, can bring up many more inequities and many more examples of poverty and injustice in this society than the assets test. I think Senator Messner demonstrated in his first few words what sort of a debate this was going to be. I ask him to look at Hansard. He said:

The Government is frightening pensioners with the iniquitous income and assets test.

We have had an income test under previous conservative governments since 1976 and before 1976 we had an income test and an assets test. There is nothing to connect this Government with an income test. The previous Liberal Minister for Social Security-the leader of the Liberal Party in this place-quite happily administered an assets test and never made any attempt to get rid of it. He did not think it was iniquitous. The previous Liberal Minister for Social Security, Senator Chaney, made speeches in this place-I might quote one later-in which he talked about a need for the introduction of the assets test. The former Treasurer, Mr John Howard, said that the removal of the assets test was the dumbest thing that the previous Government ever did. Then Senator Messner demonstrated what it is all about. He said that reliable sources tell us that 150,000 people will be affected by the assets test. The only reliable source for that is Senator Messner's fevered imagination. Nowhere near 150,000 people will be affected by the assets test. He knows it. He dreamt that figure up. He has no information. He gave us no evidence for that figure because there is no evidence for it; it is part of the scare program. Then he said that the Government has done other things to the aged-for example, that it was going to introduce a HACC program, a home and community care program, but that, in his words, 'it has disappeared from the face of the earth'.

Senator Messner —They weren't the words at all.

Senator GRIMES —They were the words he used. I do not know whether Senator Messner was in Adelaide last Friday-Senator Teague probably was-but within a block of Senator Messner's office there was a full day meeting of the State Government, the Federal Government and non-government organisations in Adelaide on something called the HACC program. Last Saturday there was such a meeting in Hobart and next Saturday there will be one in Sydney. Even while the election campaign was going on officials were negotiating the HACC program. I am having endless correspondence with State Ministers over the HACC program. Senator Messner's Liberal Party colleague in Tasmania keeps whingeing that we do not talk to him enough about the HACC program and the next week he says we are having too many discussions on the program. I can assure honourable senators that discussions are proceeding actively and vigorously on the HACC program. The fact that Senator Messner is not in on them all does not mean that the program has disappeared from the face of the earth.

Senator Messner then told us that the assets test form was sent to every pensioner. I suppose, Mr Deputy President, that it is within Parliamentary language for me to say that that is completely untrue. It was sent to 15 per cent of the pensioners. Senator Messner knows it and everybody else in this place knows it. To suggest that every pensioner received the statement of assets form is to state a deliberate untruth. He said the form was of breathtaking complexity. He said also that unfortunately the blind could not read it, and I will accept that. He said it was of breathtaking complexity and that people could not understand it. Jim Priest, the Secretary of the Australian Pensioners Federation, said that he did not like any forms but as forms go this was about the best form that he had ever seen. He did not think it was complex at all and he congratulated the Government on it.

Senator Messner may have difficulty with a form like that although, in view of his former occupation, I do not think he would have too much trouble fiddling around with a form of that type if he thought he could. But, in fact, 92 per cent of pensioners who received the forms filled them out and sent them back. They had no problems at all. Many of them received assistance from the hot line. Others received assistance from the Department of Social Security. I honestly must say that the whole thing has gone off very well. If Senator Messner is having hallucinations that vast numbers of people are having great difficulties with the assets test and are marching up and down the streets, I am afraid he does not seem to be living not only in the same country but in the same universe as us.

As I said, we decided that the time had come to overcome the anomalies that were pointed out by Senator Haines in her address here this afternoon, that a system is patently unfair if one has a means test which does not include assets. A system is plainly unfair which allows wealthy people-I can give the Senate examples of people with $550,000 in income free deposits and $400,000 worth of shares-who are still getting the full pension and all of the fringe benefits to manipulate their affairs whereas someone on a small fixed income or a small weekly superannuation payment which is subject to an incomes test has his pension affected and reduced and sometimes his fringe benefits removed. If that is Senator Messner's idea of equity, I do not share it. The only way to overcome the problem that Senator Messner talks about would be to abolish the means test altogether. I notice that this Government is not advocating that and I do not think that many people in this place do.

Those sorts of inequities have been recognised for a long time. Senator Chaney decided to do something about it some years ago when he was the responsible Minister in the Fraser Government. He tried to restore some sorts of assets testing when he said that the then Government was looking at doing something about non-income bearing cash holdings. The then Government withdrew from that because such a proposal was inequitable in that it would have affected pensioners who had cheque accounts of about only $3,000 and left alone people with large land holdings worth hundreds of thousands of dollars. That was inequitable. The then Government put its toe in the water and pulled it back again. But even after that, Senator Chaney talked about his worries in that area. He said in May 1982:

I think we cannot escape from the fact that there are some genuinely needy pensioners in this country who do not receive enough help, while some other people, by the advantageous arrangement of their assets, are able to draw on the system to a greater extent than their real degree of need would seem to justify.

That is a very proper and decent statement but one needs the political will to translate that statement into action and this Government in fact had that political will. We did not do what, I suppose, Senator Messner and his colleagues would do if they had had that political will in the first place. We did not say: 'There is going to be an election in December so we will not send the forms out in November; will will wait until after the election'. We recognised that there would be some difficulties. However, we were convinced that the system was as fair as we could make it. We were convinced that the systems of sending out the forms and of assessment were as reasonable as we could make them. Even though it was a month before the election, we sent out the forms and we proceeded. That is the action of a government that has the courage of its convictions; that is the action of a government that believes in what it is doing and believes that most people in the community agree with what it is doing. That is what we did.

If there has been any fear, if there has been any great misunderstanding in the community, if there has been a growing alarm in the community, it has been amongst only those people whom Senator Messner and his colleagues have managed to get at with their fear tactics. Senator Haines mentioned the extraordinary case of Mr Hodgman, the notorious member for Denison, who suggested that we were in fact going to assess the gold fillings in people's teeth. I was interested to note from a transcript of a talk-back program in Hobart that Senator Messner did not deny Mr Hodgman's statement. He said that it was fair enough for Mr Hodgman to make that sort of statement because there was no specific exclusion of gold from teeth in the assets test legislation.

Senator Robertson —Anything to frighten the pensioners.

Senator GRIMES —Anything to scare the pensioners. There were many other examples of this by various candidates in the community. There was one in South Australia, whose name I cannot remember, who sent out a form saying that we were sending the storm-troopers in through the doors. Mr Peacock talked about sending storm-troopers in to pensioners' homes and everything else. What happened was that there was a great overkill by the Opposition. When the pensioners' assets form came out, when people realised how they were or were not affected and when they realised that the Government had done the best job it could in bringing in the assets test, they started to look askance at the sort of nonsense that was being put out by the Opposition and they did not take much notice of it. They are taking less notice of it as the days go by. Senator Messner said today that he had been informed by reliable sources that 150,000 pensioners will be affected by the assets test.

Senator Messner —And the income test.

Senator GRIMES —For heaven's sake! If Senator Messner looks at the speech he made and at the topic which he brought up for discussion this afternoon he will see what he said. He knows what he meant to say. What he said was that 150,000 people would be affected. When we introduced this test-I have said this repeatedly in this Parliament-we had difficulty in quantifying exactly how many people would be affected. We had figures on pensioners who claimed they had nothing. We knew the number of pensioners who were affected by their income earning assets, and we had some information about the interest in bank accounts. We did not really know about the total asset holdings of pensioners in this country. We predicted that about 2 per cent of the pensioner population, about 40,000 pensioners, would be affected by the assets test, but we accepted that we could be wrong.

I cannot, on behalf of the Minister for Social Security (Mr Howe), give final figures on the outcome, although we will be able to do so in a couple of weeks time. It is a little early to do so because, as Senator Messner has said, it will be another month before the test comes in. On the present figures, with a 92 per cent return of statement of assets forms, it appears that instead of 2 per cent of pensioners being affected the figure might be 2.1 or 2.2 per cent. I find it incredible that in an area in which we are operating only on what might be called intelligent extrapolation we can get that close to the number of people affected. The figure is not 150,000. It is certainly not the 350,000 which the Melbourne Herald claimed will be affected. It is around the 40,000 mark, about which we talked when we introduced the test. I believe that makes the test and the introduction of the test a success. The Opposition was scornful when we said in this place that it would be demonstrated that not only was the Government on the right track in its figures but also it was on the right track in believing that the pensioners of this country would accept the assets test and play the game.

It is a credit to the pensioners of Australia that as at a week ago, 92 per cent of them had already assessed their circumstances honestly and fairly. They have returned the information that was needed to continue their pension unchanged, to reduce it or, in some cases, to lose it. I think it is a tribute to the pensioners of this country that they acted with common sense. They were not stampeded. It is a tribute to their sense of responsibility that they responded in a straightforward way and with promptness, despite the fear tactics used by the Opposition. I urge the pensioners who have not returned their forms to complete them and get them to their nearest Social Security office in the next couple of weeks so there can be no mistake about their entitlements I believe they know that spoilt forms can be replaced. They know they can get advice from the Department and the Department's hotlines.

I believe, and I think most fair-minded people in this community believe, that the assets test is as fair as any test could be and that it is proving, and will continue to prove, to be cost effective. We certainly expect that the savings will be in excess of the $50m that we had envisaged, for the reason that some pensioners are far better off than we ever expected. I have mentioned cases of people having extraordinary amounts of money in building society accounts and bank accounts and assets of extraordinarily high value and still getting the full pension and full fringe benefits. The poor families and low income families paying taxes should not be in the position of having their taxes used to pay pensions to people such as those. Apparently my colleague the Minister for Veterans' Affairs, Senator Gietzelt, has estimates of incomes received from the assets test which are a bit larger than we expected, for similar reasons. Of course, there are areas of difficulty. I put it to honourable senators that those were the areas we knew were there all along and talked about repeatedly in this place.

The apparent anomaly that Senator Haines brought out I have raised in the past, and will raise again, with the Minister for Social Security who, as I said, has a team monitoring this situation. Of course we are willing, as we always were, to correct anomalies of that type. The contentious area-mainly farms-relates to the situation of a property with a high valuation, producing little income and unable to be sold at a reasonable price. That was the reason we put into the legislation the hardship provisions which apply, and which may not be known to many property owners. We have had leaflets prepared. Every member of parliament has the details of the hardship provisions. I think most accountants in this country now have those details. Of course we will continue to monitor that situation. It is not easy-it never was easy-in an assets test situation to cater for the farming community, but to exclude it completely would have meant a horde of people with smart money from the cities ripping out into the country and not only taking advantage of our pension system but also distorting the values and the economies in the farming community, and that we did not want. The assets test has been introduced smoothly and with little fuss. It has been well accepted in the community, except by those in the Opposition.

The DEPUTY PRESIDENT —Order! The Minister's time has expired.