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Thursday, 21 March 1985
Page: 586


Senator WALTERS(4.14) —The assets test starts today and yet yesterday there was a headline in the paper 'ALP puts the Minister on the mat over test'. The rural assets test valuation is under fire, not by the Opposition but by the back bench of the Australian Labor Party. The Labor Party has also been putting the Minister for Community Services (Senator Grimes) on the mat. Not only the Labor Party, but the back bench of the Labor Party has been very concerned about the injustices that are showing up. It is not that the Minister was not warned. Six or eight months ago the Minister was well warned about the anomalies. The Minister says, and says very clearly, and he reiterated it today, that only the wealthiest people will be caught. I will quote from the Minister's news release before the election. He stated that 'only about 40,000 of the wealthiest pensioners, or less than 2 per cent of all pensioners will have their pensions affected'.

That statement was made before the election. Following the election we have had a reassessment of the situation. The Minister's excuse was: 'More people hid their money than we even realised'. The truth is that 57,000 pensioners will either have their pensions cancelled or reduced under the assets test later this month. With several thousand asset test forms still to come in, it is estimated that the final figure will be about 60,000 to 65,000. Before the election it was 40,000, and not long after the election it was up to 65,000.


Senator Grimes —That's not bad.


Senator WALTERS —The Minister has just said: 'That is not bad'. He reiterated today that a small number went to great lengths to cheat the Government and that we, in the Opposition, 'are seeking to defend the position of the privileged few'. What absolute rubbish, and the Minister knows it. Let us look at a few of the injustices to which the Minister referred. He said that the test will affect the wealthy, the privileged few and the people who go to great lengths to cheat the Government. I have a constituent in Tasmania whose property has been valued at $90,000 and his stock at $30,000. For some reason or other the Department of Social Security has put a business value on it. When we made an inquiry we were told that a goodwill of $20,000 had been placed on the farm. No other business is being carried out. Until last night that was still on. We were told late last night by the Department, after we had a look at it and brought the matter to its attention, that it was all a horrible mistake that it should not have added the $20,000. What absolute rubbish. Okay, we will leave the $20,000 out. Let us look at the wealth of this very wealthy man who has gone to great lengths to cheat the Government and who is one of those whose position we are seeking to defend-one of the privileged. He has a bank balance of $1,406 and he has a car worth $3,000. He does not have house contents valued at $10,000; the contents are valued at $4,000. He is one of the wealthy people, one of the privileged few. He is in a similar position to that of other small farmers-he is retired, on a pension and has handed over his farm to his son. His son and his family are scratching out a living. This farmer has been caught because he did not make his son pay for the farm.

This is, without a doubt, retrospective legislation because a myriad of other small farmers, along with this farmer, have handed over their properties to their children, with no thought that the Government would suddenly introduce death duties, with no thought of the Government changing the position where, if they owned the property, they would suddenly be deprived of all pension. This family is now in a terrible mess. Others in very similar positions have appealed and their appeals have been knocked back. They are in equally disastrous positions. But they are the tall poppies that Senator Grimes talks about, they are the privileged few. He ended his speech by saying: 'If it does not all work out they can go on hardship benefits; they can apply for benefits'. What arrant nonsense this Government talks. It talks about the tall poppies. It talks about the wealthy and the privileged few as being the only people who will be caught and then it says that people can always apply for hardship benefits.

What option has this family got? It has been told that it can borrow for its pension and use the pay as you die scheme. Lovely stuff. Bearing in mind that this man's property is worth $90,000 and his stock is worth $30,000, let us see what he has to pay after a series of years. If he lasts 10 years-a pretty small number of years after retirement-which would only take him to the age of 75, he would then have a debt of $180,846, far in excess of the value of his property. What justice is there for the man whose property is worth only $120,000 when someone else living in Canberra or Sydney can have a home worth upward of $400,000? Units in Canberra are selling for $340,000 and people do not have to declare that; they get that completely free. This family, one of the tall poppies, has property valued at $120,000. There is no justice in it at all. Indeed, it is retrospective because there is no way in which this was able to be foreseen by the majority of people in the community.

Let us see what the Gruen Panel of Review of the Proposed Income and Assets Test that this Government set up had to say. It made some rather relevant comments. It stated that there is no justice and there cannot be any justice in the way it works out. It stated that the panel believed that its recommendations were only of an interim nature. The report states:

. . . Whatever proposal is accepted . . . there will be some problems and some hardships caused in the community.

It also states:

The Panel has not been able to agree that an income and assets test is a desirable element of our social security system.

. . .

The Panel acknowledges that no test is completely fair.

Yet the Government has ignored that. It has gone straight ahead and it has tried to make this very unjust assets test work. There are other anomalies. Let us look at some of those. A widow has 12 weeks within which to change her way of life. Senator Grimes touched on this today but he touched only on the money assets, which is all he ever thinks about. He touched only on those situations where money would be affected. That widow will have to sell her assets. She will have to sell her shack or her car and change her entire lifestyle because the Government says that she is not entitled to them. Life insurance is being valued at its surrender value. If there is no surrender value the Department of Social Security puts its value on it. In many cases very large valuations are being put on these policies by the Department and protests are coming from all over the place. Pensioners going into nursing homes are allowed to keep their homes for two years. After two years their homes are assessed and they then lose their pensions.

Why is the Government picking on the weakest members of the community in this way? If people have invested large amounts of money in their homes in Sydney, Melbourne or Canberra, do not end up in a nursing home, have learnt how to work the system well and know how to invest their money they can leave it all to their children. They can leave a home worth half a million dollars or more to their children. But if they have moderate homes and they happen to end up in a nursing home their kids will not get a thing because, after two years, their homes will be assessed. They will lose their pension and will have to sell.

People may have been battlers all their lives on small dairy farms, as so many are on the north-west coast of my State, working seven days a week 52 weeks of the year. Dairy farmers do not find it easy to take a holiday; there is no way that they can take one. If they have employed their sons and their sons have worked virtually for pocket money until they retire-and this happens in so many cases-they have had it. They are the tall poppies, the wealthy, the privileged few and they are not permitted to do anything other than sell their properties. They cannot hand their properties down to their sons. There is no justice in this at all.

Let us go back to the Gruen report. That report states very clearly that a minority of panel members believed that farmers faced special problems. It recommended that special consideration should be given to allow additional money to be exempt for long term farmers whose farms were family concerns and would otherwise be likely to be sold. This was recognised as early as the Gruen report. But what has the Government done about that recognition? Absolutely nothing. That report was handed down in May 1984. It was recognised then that there were special considerations for the farming community where it was not possible for two families-a retired family and the children of that family-to earn an income. The Government has done nothing. Today is the day that it all starts, and the Government has still not done anything. It still ignores the suggestions in the Gruen report.

Senator Grimes has said that all this must be done, otherwise the poor will not get a reasonable pension. The poor have always received a pension. Honourable senators on both sides of this chamber would like to see that pension increased. I am not suggesting for one minute that the former Government was any more able to increase the pension than is the Government today. At least we tied the pension to the consumer price index-a Labor government did not do that-which guaranteed a twice-yearly increase in line with the cost of living increases.

This Government has made all sorts of promises that it has never kept. It promised to increase the pension to 25 per cent of the average weekly wage, and that has not eventuated. Before the March 1983 election it promised that pensioners' pay packets would not be touched. It has now introduced an assets test. Senator Grimes said today that the poor have got to have a decent pension and that is why the Government has introduced the assets test. That is why the Government has taken money from all these tall poppies to whom I have referred, those privileged few, those little farmers who went to great lengths to cheat the Government. With all this lovely money that the Government will save, it will be interesting to see just when it will increase the pension and what figure it will increase it to. These ordinary people who have worked all their lives had not belonged to the Australian Council on the Ageing; they are not members of that august body, they are just ordinary people who have been minding their own business and organising their inheritance in a way that they felt governments allowed them to do. But suddenly they find that they can no longer do that, that they have done the wrong thing and that they should have signed their property over to their sons ages ago because the Government has now brought in this new system.

The Opposition will watch the Government very carefully. If any monitoring is to be done, we will certainly be doing it to see whether the Government will increase the pension in line with its promises. It has taken the money from these very wealthy privileged few and we will await the outcome of that.