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Thursday, 21 March 1985
Page: 598


Senator MESSNER(5.43) —in reply-I deal, firstly, with the remarks of Senator Harradine because he has raised a point which is at the core of the decision the Opposition parties took in order to introduce this legislation. We chose to repeal the principal legislation, rather than to seek amendments to deal with the various anomalies, for two reasons. The first is that the anomalies are far more numerous than could be fixed by a simple piece of legislation. The second, and more important, point is this: As honourable senators know, the Opposition parties have maintained a position of in principle objection to this legislation since it was first announced by the Government. There is one particular item of the most severe impact in principle upon one sectional group in the community which can be remedied only by a repeal of the assets test legislation. That impact is upon farmers.

My second reading speech-I thank Senator Harradine for his remarks in regard to the clarity of it-referred to the situation in which farmers find themselves if they are caught by the deprivation provisions of the legislation and, in the meantime, following the normal pattern of business and farming arrangements, have transferred their business, their farm and their land, to a son or a daughter to carry on. In that situation, given that we are not talking about the very wealthy farmers but about the average battling farmers, the son cannot raise money sufficient to be able to service an outside debt in order to finance the care of his father in his old age, nor can the father seek a loan under the so-called pay as you die scheme because he has surrendered the asset to his son. Consequently, he is unable to give to the Government a security over the property in order to draw the pension under the pension loan scheme. He is in a catch-22 situation, which he cannot get around. I am afraid that that cannot be fixed by legislation.

Earlier today Senator Grimes said: If people are in a hardship situation-and the case I have just outlined may be considered to fall into that area-they should approach the Department of Social Security and seek assistance under the hardship provisions. However, if they have disposable assets outside of the farm or whatever, of more than $5,000-one really does not need a lot in one's house or one's bank account to add up to that figure-they cannot qualify for the pension under the hardship scheme. So, there is a third block to the farmer. I believe this has been designed deliberately to hit that section of the community.


Senator Gietzelt —Nonsense!


Senator MESSNER —The Minister did not address that in his remarks, nor did Senator Grimes, yet it is spelled out clearly in my speech. Neither Minister has said anything about it, nor has any other speaker on the other side. There must be some reason for the Government not disclosing to the Senate why it is not seeking to amend the legislation. I say that there has to be a fundamental attack on the legislation. If the Government will not face up to its responsibilities-if it has to be dragged squealing and screaming into the House of Representatives for that to occur-then I am prepared to force this issue as far as I can in the Senate. That is why we need the support of the Australian Democrats and of Senator Harradine in order to achieve the passage of the legislation, at least through the Senate-to push the Government to the limit.

Time and time again, through the whole sorry history of the introduction of the assets test, the Government has been forced on to the defensive before it has finally given in and retracted, changed its mind and then made some alteration to the scheme. That is the history of the last 18 months or so. I could quote numerous examples of how that has occurred, and this is another example. The Government acts only under pressure. When it is forced by the Opposition parties to recognise the truth and the strength of the case, it will go forward and do something about it. It takes that kind of pressure to bring the Government to its senses, and we are in the situation today where we are forced to do the same thing.

I turn to a few of the arguments the Government has put forward today. It seems that the Government relies for its defence on two key points: Firstly, that it has raised more than it estimated by virtue of the assets test and that, somehow, this is a very significant breakthrough; and, secondly, that it is making what it calls the rich pay in order to be able to provide more resources to look after the poor. Let us examine these points. The Government's first and most senior promise at the election in 1983, since repudiated, was to increase the average base rate of pension to 25 per cent of average weekly earnings. It has failed on this ground.


Senator Gietzelt —That was over three years.


Senator MESSNER —We are now well into the third year, Senator. Government members are very sensitive on this point. I know why they are sensitive. Even if the assets test produces $100m-which the Government claims it will; and I will come to that in a minute-the Government will need $1,000m to raise the pension to 25 per cent of average weekly earnings. So what is the Government telling us? If the assets test raises only $100m, the Government then has to raise another $900m. Does that not raise fears of what the Government might do with the assets test now that it is in place? This is worrying a lot of people in the community. The Government is seeking another $900m from the assets test after this event. Even if that were not so, Senator Gietzelt admitted in his remarks today, in his very poor defence of the subject, that what it was all about was not looking after the poor; it was about reducing the deficit. He said that the Government introduced it to reduce the deficit. What is the Government's intention? Since August of 1983 we have not been able to establish clearly what the Government is on about. We are obviously getting no clearer to the point now either.

Let us return to the case of the farmer, because I would like to make the point about the so-called $100m saving. Consider a farmer with a $160,000 property, other than his house, that is producing around $8,000 or $9,000 in income a year. He intends to give the property to his son who can continue the business after the farmer's retirement. Two families cannot live off $9,000; so, quite rightly, he applies for a pension which would bring the total income for the two families to around 75 per cent of average weekly earnings, a princely sum. Two families cannot live on that amount when that 75 per cent, small as it is, is reduced to only $9,000. So what is the option for that farmer? He has to sell the property. What is the immediate consequence? The immediate consequence is clear. The son and his family are forced on to unemployment benefit. How much will that cost the social security system? Is it not absurd? Of course it is. The Government asks us to swallow that it is somehow gaining a net increase of $100m. It is not true. That is not even the net cost to run the assets test anyway, which, by the Government's own admission, is of the order of $30m.

This Government is trying to hoodwink people because it believes that by sprouting rhetoric and throwing out emotional phrases about how the rich should pay for this and that, it will gain the support of the people. Let us just consider that point of rhetoric; that is, how the rich will pay. Senator Grimes gave us a synopsis of several different cases of so-called rich people who were taking advantage of the pension system. It seemed like a truncated version of the famous Senator Gietzelt list of 124 pension cheats that was discredited about 18 months ago.


Senator Gietzelt —It was not.


Senator MESSNER —I refer the Minister to the evidence given to the Senate Standing Committee on Social Welfare on the retirement income inquiry where his whole argument was knocked to pieces. I hope that he will look it up. Let us just take one case because I was not able to copy them all down as Senator Grimes spoke. He mentioned a case, which sounded horrific, of a man with $400,000, interest free, lying in a family trust and he was getting the pension. What the Minister did not say, of course, was how that $400,000 came into existence. He might have been a fellow with an ordinary size farm, but because of the values applying in a particular district, he transferred the money into a family trust in such a way that he transferred the ownership to an entity so that he could provide for his sons and daughters to work the property while still retaining a vehicle to receive some income from the farming operation. In other words, it was a simple debt. We have demonstrated that farmers are not finding it easy to pay one family's income off a farm, let alone two; so how can they service that properly? Therefore, exactly the same situation has arisen as I mentioned earlier.

I would like to know how the Government can throw around figures such as $400,000 or $500,000 worth of assets, without telling us what those assets are and what the circumstances of those assets coming into existence have been. I ask the Government formally to provide us with a breakdown of the classes of people who have lost their pensions, the gradings of wealth in those categories which have led to the loss of their pensions and what those assets represent. I think we will find that the most significant groups of people who have lost their pensions are indeed the battlers, the small businessmen, the farmers who are in the small category and certainly not, by any stretch of the imagination, in the wealthy category. Having attended meetings along the north-west coast of Tasmania last week I have been absolutely astounded by the response from people who have been concerned about the assets test. They all have average size dairy farms and their assets would exceed no more than $200,000. Their incomes were of the order of $10,000 a year. These are the kinds of people who are being affected. The Government will not acknowledge it; it will stick to its rhetorical line of the Left and keep sprouting this nonsense about ripping it off the rich.


Senator Robertson —Get your facts straight.


Senator MESSNER —Some of it is right, anyway. Senator Grimes mentioned some of the anomalies. I did describe those in some detail in the course of my remarks, but I would just like to mention one other aspect before I sit down; that is the point about the valuations of farming properties. It has become quite clear that the Government had absolutely no idea what it was going into when it set up its machinery to look after the review of valuations for properties. Apparently the Government does not even have in existence suitable regulations and arrangements for the valuations of properties where, in the circumstances that Senator Gietzelt has outlined in his remarks, the valuations have been challenged. I and every other senator on this side of the House have had practical situations put to us, where people have come to us and said: 'I sent in a valuation according to the local valuation from the Valuer-General. I got back information that indicated that the valuation had been increased by 50 per cent, and I have lost my pension. I then went to the Department of Social Security and sought a review in accordance with the arrangements'. What is the answer? The answer is 'Oh, you will have to wait because we do not have the valuers who can do the job', 'We cannot get into people's property', 'We cannot do this', 'There is just no machinery for it', or some other reason. One can see quite easily that this might spin on for another six or 12 months before anything is done about it. As a result these people will be suffering by virtue of not having any income for that period. I think that is a disgrace. I suppose that one can only say that it is all part of the tragic history of this procedure that started on 21 August 1983 with all its disastrous overplay.

I wish to address some remarks to Senator Haines, who always has a mortgage on intelligence in this place and who is one of the brighter members of the Senate-by her own claim. She made a great deal of the fact that the anomalies are something which she would like to change by virtue of altering legislation. My first question is: Where is her amending legislation? My second question is: If she is so concerned about the affairs of pensioners, why was legislation not brought before the Senate on the first day of its sittings? As I said earlier, there is only one proper approach to this problem that is so fundamental as it affects a particular section of the community, that is, the farmers: We have to repeal this legislation, have passage of the Bill through the Senate and put pressure on the Government to wake up to itself and get something done. If that argument does not appeal to the Australian Democrats they have nowhere else to go.

Senator Haines referred also to my colleague Alexander Downer, the honourable member for Mayo. She quoted some remarks that he made about nine months ago when he was the Executive Director of the Australian Chamber of Commerce. She claimed that he supported the assets test, as of course she does. Mr Downer has certainly been involved in a number of very well-publicised cases in Senator Haines's State of South Australia which indicate the absolute stupidity of the Government's legislation. He is quite clearly convinced that the Australian Labor Party was wrong on this issue, as has been demonstrated by several Press releases. I will not read those out in any detail as it has already been done. I suggest that Senator Haines might do better to have a talk to some of her constituents in South Australia and people in other parts of Australia to find out what are the serious problems with the current legislation. She will then realise that this Government will be forced to act only if the ultimate pressure is exercised. She has the ability to do that by joining with the Liberal and National parties here today in supporting the passage of this legislation and putting the pressure on the Government in the House of Representatives. It is interesting that Senator Haines's great solution to the problem is a national superannuation fund.


Senator Haines —I did not say that at all.


Senator MESSNER —The honourable senator did say that. There is an echo from the other side of the chamber very much like the echo we heard earlier this week emanating from Mr Howe and Senator Gietzelt, those far left members of the Australian Labor Party who think the great solution to all problems, in particular the tax problems, is a national superannuation scheme. That is the kind of approach of the Australian Democrats, who have just no idea about the realities of the situation. If they have a mortgage on intelligence they are about to be sold up and lose out altogether.


Senator Puplick —Foreclose Senator Haines.


Senator MESSNER —To foreclose Senator Haines is a very good suggestion. In conclusion, I merely reiterate this simple point: We in the Liberal and National parties stand to repeal the Government's legislation because we believe it attacks thrift, it attacks frugality and it attacks incentive for people to do their own thing. We believe it is wrong in principle on those grounds alone. But the more important point is that the legislation itself attacks particular sections of the community unfairly. It destroys the opportunities for those groups to rejuvenate themselves. For that reason we oppose the assets test in principle and we are seeking its repeal. I hope that the Senate will vote in favour of our legislation so that we can bring the Government to its senses.

Question put:

That the Bill be now read a second time.