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Thursday, 19 February 1987
Page: 263

Senator COLEMAN —I refer the Minister for Finance to a Press release put out earlier this week by Senator Michael Baume on behalf of what purports to be the coalition's Waste Watch Committee, although one might question the use of the word `coalition' at this stage. In that Press release Senator Baume makes claims of fraud in respect of invalidity retirements amongst members of the Commonwealth superannuation scheme and suggests an even worsening trend in the number of invalidity retirements. Are Senator Baume's claims true? Can the Minister provide any additional information which could shed light on the matter?

Senator WALSH —In response to the second last part of the honourable senator's question-are Senator Baume's claims true?-the answer is no. Senator Baume has yet again fiddled the figures. Indeed the Waste Watch Committee's Press releases are about as reliable as a Patrick Partners prospectus, and the Waste Watch Committee Chairman spends a great deal of his time trying to explain away the errors in the latest Press release that he has put out. More specifically, Senator Baume claimed-and I will not go through all the tedious detail in the Committee's Press release-that the number of invalidity retirees from the Commonwealth Public Service or, more accurately, contributors to the Commonwealth superannuation scheme, which covers large authorities such as Telecom Australia and Australia Post as well as Public Service Act employees, exceeded the number of other retirees. What he had omitted was the number of retirees who had taken a reduced pension and had retired earlier than the compulsory retiring age. Therefore, the ratio between the number of invalid pensioners and other pensioners was 0.71-not something over one, as Senator Baume had asserted.

It is worth noting perhaps that in 1977-78, when, if I remember correctly, Senator Baume was a back bench member of the Fraser Government, that same ratio was 3 : 1; that is, there were three times as many invalidity retirees at that time as there were other retirees. Some unusual circumstances were operating at that time and that was a peak figure, but Senator Baume did not seem to be concerned about it then. However, the Government has been aware of and suspicious of the justification for some of the invalid retirements that have taken place. Long before the Waste Watch Committee decided to have anything to say about this I had started action through the Public Service Board, which then took a survey of invalidity retirees and particularly the earnings of people who were receiving invalid pensions.

If one believed, as I believed, that there were some people on invalidity retirement pensions who should not be, basically there were two things that one could do: One could try to tighten up the medical procedures or go the financial route. The Government decided on the latter, because the problem with the medical procedures is that there are too many doctors around who will sign anything that is put in front of them. Indeed, there was recently a case, which is one of the clearest cases of malingering that one is ever likely to find, where the malingerer in question had a certificate signed by a specialist stating that he was unfit for duty and could therefore continue to receive sick leave. The problem is that there are doctors who will sign anything that is put in front of them, and it soon gets to be known who those doctors are.

The Government, therefore, chose the financial route; that is, to impose a limit on the earnings from exertion that anybody on an invalidity retirement pension could receive without having that pension reduced. That legislation was passed in the last session of Parliament. It should be noted that these figures are early, but it has been our experience-not since the passage of that legislation but in the first six months of 1986-87 when it was known that this legislation was coming up-that the ratio of invalidity to age retirements fell from 0.71 to 0.67. There is one possible important problem in administering the new arrangements: Although the Act now requires the individual to supply to the Commissioner of Taxation a statement of earnings, until such time as the social security and income tax system can be effectively linked and the identity of all individuals effectively determined, there remains the opportunity to evade the provisions of the new Act by a pensioner being employed under a false name, or even being employed under his own name without disclosing that fact, and knowing that there was a reasonable chance of getting away with it because the effective identity check was not in place. If Senator Baume or anyone else in the Opposition is concerned about that I suggest that he votes for the Australia Card the next time he gets the opportunity to do so.