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Thursday, 16 May 1985
Page: 2081

Senator HAINES(3.40) —I have to say at the outset that I am sorely tempted today, which is the second time that this repeal legislation has been before the Senate, actually to support the Opposition's Bill, the Social Security and Repatriation (Abolition of Assets Test) Bill-not because I have any philosophical or ideological objection to a needs based test for pensions or because I oppose what the Government has attempted to do; that is, to expand the system from the previous anomalous incomes only test to an assets test, but because of the sorts of things that have been implied in a couple of telegrams that I received today. One came from Kelly Carter, a resident of south-east South Australia, who is a member of the UF and S Action Committee. In the telegram he said:

Dear Senator Haines, due to the lack of action by the Government-

I wholeheartedly endorse that sentiment-

I beg you to please support Senator Tony Messner's Bill in the Senate today. Our future is in your hands. Please help us.

The second telegram came from Tamworth and stated:

On behalf of the farmers of Australia we strongly urge you to support Senator Messner's Bill in Parliament today.

I would like to support Senator Messner's Bill in the Parliament today if only to prove to these people just how useless that action would be. There is no way that supporting Senator Messner's Bill in the Parliament today, or a month or so ago when he first introduced it, will have any effect at all on what is currently bothering the farmers under this test. It will have no effect at all. It will not stop the legislation coming into operation. It will do nothing more than what a simple resolution of the Senate saying that we object to the way in which the legislation is being administered would do.

People in the community who seem to believe that the passage of this Bill in the Senate today will automatically repeal the assets test legislation have been made, I suspect, the victims of a very cruel hoax. If the implication has been given to those people by Senator Messner or by any other member of the Opposition, I deplore it absolutely. I can only assume, from the letters that I have had from people saying 'Please repeal it in the Senate, then we will not have to suffer under it' and the contents of the telegrams from Kelly Carter and Jim Hayes, that that is their belief. Why else would they say: 'Our future is in your hands; repeal this piece of legislation'? They must believe that in some way the repeal of the legislation, the passage of the repeal Bill here, will automatically stop the legislation from having any effect. I do not know Mr Hayes, but Kelly Carter is an intelligent person. Surely he must have some reason for indicating in this telegram that he believes that in some way Australian Democrats' support of Senator Messner's Bill in the Senate today will help those people in regard to the operation of the legislation. It will not.

For those people who seem to believe that it will, let me just briefly run through what has to happen before an Act can be put into effect or can be repealed. There are, in fact, four stages to this. The legislation has to pass both the House of Representatives and the Senate in an identical form. It has to receive royal assent and it has to be proclaimed. Three of those four procedures are currently in the charge of the Government, so simply passing the repeal Bill in the Senate today would do nothing except confuse a large number of people in the community who could well be led to believe that that has somehow stopped the effect of the assets test legislation. It would not.

Let me go back to what I said a month or so ago when the Bill first came before us. We agree that there are anomalies in the operation of the legislation. The main ones, of course, affect people in rural areas. I raised one in Question Time some weeks ago with the Minister for Community Services, Senator Grimes, of people who pay small, non-refundable deposits in order to secure a place in a nursing home. There may be one or two others affecting a few individuals, but certainly the main one is that which affects people in rural areas. We have acknowledged that. We pointed out at the time that there are very few pieces of legislation which are anomaly-free and that when anomalies occur they should be corrected.

We said also at the time that it was not necessary to repeal this legislation, nor, in fact, even to amend it in order to assist people in rural areas who are suffering as a consequence of it. The Government has proved us right in this by pointing out that it could stop the anomalous administration by the Department of Social Security simply by introducing some regulations. It is not necessary to meddle with the legislation at all. It is simple enough to use the other processes that are available to us in this place. Repealing the legislation-assuming that it went through both Houses of Parliament, received royal assent and was ultimately proclaimed-would simply return us to the old, inequitable, highly anomalous incomes only scheme which more and more people were managing to avoid by rearranging their capital so as to minimise their income, and still holding large amounts of assets.

I believe-I said this on the previous occasion on which the legislation came before the Senate-that if the Government is not going to act in this way, if it is not going to introduce regulations which will allow the legislation to be administered differently for people in country areas than it is for people in the cities, the other process that we can take is to establish an anomalies tribunal which will look at individual cases and treat them on their merits in such a way that people who are inadvertently affected by the administration of the legislation get a fair hearing and are exempted by the tribunal from the operations of the legislation.

We have, in fact, had produced the first draft of the required legislation. Under this legislation the proposed assets anomalies tribunal would be based on the Repatriation Legislation Amendment Act 1984 and the provisions for the tribunal that exist under that Act. The way we envisage the tribunal operating is fairly simple. It would exist to hear applications and to determine whether or not an anomaly existed in the assets test as it applied to a particular person. An anomaly would mean that a consequence of the operation of the assets test would result in substantial inequality of treatment as between persons whose property is substantially equivalent in value. That is, of course, the anomaly that is affecting people in rural areas at the moment.

It would not cost the applicant anything to appeal to the tribunal because in the draft Bill a provision is made that costs could be paid to an applicant so that no additional financial strain would be put on him. Proceedings would be private and informal. They would be held in a convenient place, bearing in mind the age and the health of the applicant. Those are important considerations when one considers that the people we are dealing with very largely are elderly people. The tribunal would, in fact, operate to apply the principle of equity to applications and would endeavour not to apply the assets test if an anomaly would result. For example, it would be possible to define an uneconomic farm as one which produces an income of less than $10,000 a year and which is worked by the pensioner's son or daughter as his or her principal source of income. That income could then be disregarded as far as the assets test is concerned. I think most honourable senators present in the chamber today would agree that that is the sort of situation that is causing most concern to people in the rural community. Also of concern is the isolated instance that Senator Grimes mentioned of people living on a pocket of unproductive land in a belt of highly productive land being unfairly assessed and having put on their property a value right out of keeping with its actual valuation.

I simply repeat that to return, as the ultimate repeal of this legislation would do, to the previous income only test would be to return to a system under which a large number of people-at least 30,000, according to Senator Grimes, and quite possibly more-were in receipt of a full pension, often with fringe benefits, or a part pension which they did not need. These people were in a position to look after themselves, irrespective of whether they felt they knew where their next meal was coming from. As Senator Grimes pointed out, somebody with $150,000 worth of assets and $30,000 in the bank ought to have some idea of where his next meal is coming from and ought not to expect to receive a pension at taxpayers' expense.

The situation in which people were able to come out of business or a job with several hundred thousand dollars in superannuation lump sum payments, put it into a non-interest bearing account and then go on a full pension with fringe benefits was highly inequitable and highly immoral. With the introduction of the assets test those people are no more entitled to receive a pension than are people who come out of similar jobs and receive their superannuation, not as a lump sum but as a regular fortnightly income, thereby earning enough to deny them the pension and fringe benefits. Going back to that inequitable, iniquitous situation is not something I would have thought anybody who supported a needs based system would approve of.

The obvious solution is either to do what Senator Grimes has indicated the Cabinet apparently will be looking at on Monday-not before time-and make some regulatory amendments to the legislation or, if that is not acceptable, to do what happened with the repatriation legislation and establish and anomalies commission for the assets test legislation. Despite the fact that I would like, as I said earlier, to support the Bill, in order to indicate to the community that it will not have any magical effect and that it will not cure overnight the community's problems or repeal the assets test and prevent its effects I indicate that we will not be supporting it. Therefore, I move:

Leave out all words after 'That', insert:

'the Senate, recognising that agreement by the Senate to a Bill to repeal the assets test will not assist farmers, because it will not change the Act in any way, nevertheless condemns the Labor Government for its failure to act quickly to alleviate the hardship caused to the rural community by the administration of the assets test, and opposes the return to an inequitable income-only means test as proposed by the Liberal-National Party Opposition'.

I think that amendment probably expresses the three main points I have made in my speech today. Firstly, people must be made aware that the passing of a repeal Bill in the Senate will not in fact repeal the legislation. Secondly, honourable senators, like a lot of people in the community, are getting sick and tired of the Government dithering around about what it is or is not going to do to remove the anomalous administration of the test. Thirdly, if we are to have a means tested pension system, it has to be as equitable as possible, as anomaly free as possible, and a return to an income only means test will not be the solution to all our problems.