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Thursday, 9 May 1985
Page: 1710

Senator GRIMES (Minister for Community Services)(10.14) —First of all, I thank honourable senators for their support for this sensible piece of legislation, the National Welfare Fund Repeal Bill 1985. Like Senator Peter Rae, I would like to pay due respect to Senator Dame Margaret Guilfoyle, who is now in the chamber and who everyone recognises put this matter in train some years ago. The legislation, of course, has been supported by the Senate Standing Committee on Finance and Government Operations, the Public Accounts Committee and everyone else who has looked at it since 1951 or 1952 when the extraordinary decision that Senator Rae spoke about was made.

I can give Senator Rae a bit of a clue about why the scheme was not introduced in the last two years. In fact, it is probably the reason why it has not been introduced since 1952. I, when shadow Minister for Social Security from 1976 and Senator Dame Margaret Guilfoyle as Minister for Social Security in that time, attended many meetings with pensioners. I am sure that Senator Chaney and Mr Howe have frequently attended such meetings around the country. At almost every meeting I have been to, one or two pensioners have accused me, Senator Dame Margaret Guilfoyle and all those who have preceded us, of locking away in a big vault in Canberra the national welfare fund which was introduced by Mr Curtin and Mr Chifley and was snitched away from them by Sir Robert Menzies and locked up. We are told that the only thing that was stopping the pensioners of this country from getting their pensions doubled was the fact that the national welfare fund was locked away and we nasty politicians had got at it.

We considered this matter last year. I dare say that this happened in the past but I do not expect Senator Dame Margaret Guilfoyle to open confidences. Last year there was a suspicion that an election might have been coming on. As soon as that happened this small group of pensioners around the country, who firmly believe that all this money is locked away and it is only the terrible politicians of whatever party is in power who are stopping them from getting their hands on it, increased in number and put advertisements in the paper about the terrible things the Government was doing and asking why it did not release all this awful money.

Senator Dame Margaret Guilfoyle —Did they bring you all their group certificates?

Senator GRIMES —That is right. They bring in their group certificates to show the contributions that they have made to that national welfare fund over the years. Of course, as Senator Rae and others have pointed out, it was a silly fund which was costing money, time and the effort of public servants who were needed to keep it in some sort of order. It cost the Auditor-General a considerable amount as he criticised it each year. It also, incidentally, created great difficulties at one stage when it was being considered by a Senate Estimates committee because government members used to claim that questions could not be asked about what was spent under the national welfare fund. However, I think all that is behind us.

I cannot support the Australian Democrats amendment. I do not support it, for a start, because I do not think it is an appropriate amendment to this sort of legislation.

Senator Haines —Will you tell us when it is appropriate?

Senator GRIMES —I do not intend to go into a long dissertation on national superannuation. However, I assure Senator Haines that I can, if she would like me to. National superannuation is also something that Senator Dame Margaret Guilfoyle, I, Senator Chaney and many other senators in this place have lived with for a considerable time. Before people start talking about national superannuation they ought to define what they mean by that term. Senator Jack Evans seems to think that national superannuation in this country is the proposal put forward by my good friend Dr John Deeble as a discussion paper to the Government last year. I do not believe that that proposal was an adequate national superannuation scheme. The problem is that everyone in the community is in agreement on national superannuation. Everyone thinks it is a great thing until he finds out that, under the Hancock proposal, we would have to have a levy of 3.5 per cent on taxable income to pay for it or that under his alternative proposal we would need a taxation levy of 1.5 per cent or 2 per cent to pay for it. These people suddenly become not very interested in such a scheme.

National superannuation also means different things to different people. The Life Offices Association in this country has a great national superannuation proposal which it would run and which would cost revenue, on the latest figure, only about $1,800 million a year. Such a proposal would give them a lot of business. It would enable them to top up the pensions that they would be able to provide through their insurance schemes. Some members of the trade union movement believe that we should get to a national superannuation scheme in the way in which almost all European countries got to some sort of comprehensive superannuation scheme-that is, by introducing occupational superannuation schemes covering whole occupations rather than just companies and then merging those categories together.

I suppose Senator Jack Evans is really talking about a contributory social security system. It is a very interesting exercise to go to Europe these days and talk to the Europeans about it. Practically every country in Europe has some sort of contributory superannuation or pension plan, particularly Sweden, Belgium which has the oldest scheme, Germany and Italy. All sorts of countries have those schemes with the exception of Denmark. Denmark has a scheme like ours. Except for a very strange unemployment benefit scheme, Denmark has a non-contributory pension scheme like ours. Denmark pays its pensioners out of Consolidated Revenue on a means tested basis. If you go to the Danes and ask, 'Why do you not have a contributory scheme like Sweden, Norway and all those countries?', they say: 'We have seen what has happened there and we do not want any of it'. If you go to Sweden they say: 'We understand that you have a scheme like Denmark and we are looking at that scheme'. There are enormous problems with contributory schemes which unfortunately do not redistribute in the way Senator Evans seems to think they do. In times of economic crisis and economic difficulties these schemes inevitably need huge topping up from Consolidated Revenue.

The Canadian scheme pays very modest rates and is funded by a 1.8 per cent levy on income tax, a 1.8 per cent levy on employers and a 3.6 per cent levy on self-employed people. It has to be topped up by a 2 per cent sales tax. The New Zealand scheme is non-contributory and that scheme is practically wrecking the economy of that country.

I am not saying that we cannot have a contributory scheme which is fairly universal or that we cannot introduce a social security tax. That is what Curtin and Chifley introduced-not a superannuation scheme, but a social security tax, a social security levy. We can investigate all those things but in coming to a conclusion about that we must consider not only the effect on the revenue at difficult times like this; we have to consider also the effect on the taxpayers because the taxpayers will inevitably have to top up the benefits in the first 20 or 30 years if we are going to have immediate benefits, and I suggest no one wants only long term benefits. We have to consider the effects on the investment economy in this country which heavily relies on such things as superannuation and insurance.

I am not saying that we cannot introduce a national superannuation scheme. I am not saying that we cannot introduce some sort of contributory pension scheme. What I am definitely saying is that in economic times like we have at present we cannot do it in a year and for that reason alone I say that we cannot support that amendment.

Senator Jack Evans —But is it on your agenda?

Senator GRIMES —Of course it is on our agenda. Senator Jack Evans seems to think that there has been some great plot on our side. We have a working party that is looking at national superannuation. As honourable senators would know, Mr Hurford is taking an interest in this. There has been a meeting between Mr Hurford, Mr Dawkins, I think Mr Keating, and me to establish the parameters of that working party. There was no suggestion that we were going to meet every week to try to sort out those problems, but we do meet and discuss this issue.

I can understand that some people see a great Utopia or something at the end. People think that national superannuation will solve all our problems. Certainly the sort of funded scheme which I think Senator Jack Evans was implying we should introduce-if one wanted to introduce the immediate benefits he talked about-would cost the revenue a considerable amount of money and would probably cost it considerably more than $2 billion by the year 2000. I think it would cost $2 billion before then. We are not giving up hope on national superannuation. What I say is that it needs more careful thought and it is certainly unlikely to be introduced in a year-although you never know, all sorts of things happen in this country in a year. I do not agree that it is correct in principle for this Senate to demand that the Government should do that within a year and try to amend this sort of legislation which really has nothing to do with it. I do not agree that the amendment is a very sensible one.

I thank honourable senators for their support. I am glad to be rid of the national welfare fund. I suppose for the next three or four years the Government will be accused of putting even more padlocks on that big vault of money, but at least I can say that it was not only me who put the padlocks on. It was Senator Rae, Senator Dame Margaret Guilfoyle and Senator Jack Evans who all supported this legislation.

Senator Peter Rae —I seek leave to speak to the amendment.

Leave not granted.

Question put:

That the words proposed to be added (Senator Jack Evans's amendment) be added.