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Tuesday, 17 March 1987
Page: 843

(Question No. 1590)

Senator Reid asked the Minister for Finance, upon notice, on 10 December 1986:

(1) Was an expected savings in outlays of $12.6m for 1986-87 predicted during the Second Reading speech for the Superannuation and Other Benefits Legislation Amendment Bill 1986.

(2) As the relevant Act became effective from 10 October 1986, will the Minister for Finance advise-

(a) the offsetting costs due to:

(i) the loss of income tax and Medicare levy which would have otherwise applied to the income lost from 10 October 1986 to 30 June 1987 for some 106 000 payees;

(ii) consequential increases in Social Security pensions and supplements; and

(iii) extra work loads to meet the target date for changeover in the Australian Government Retirement Benefits Office, the Department of Social Security and other paying agencies; and

(b) the net result of these adjustments.

Senator Walsh —The answer to the honour- able senator's question is as follows:

(1) Yes

(2) (a)

(i) Loss of income tax and Medicare levy are estimated to be $2.8 million in the last 1986-87 financial year.

(ii) It is estimated that total Social Security pension outlays will increase by about $1 million in 1986-87. The effect on unemployment, sickness and special benefit outlays will be negligible.

(iii) The Australian Government Retirement Benefits Office estimates that the cost of overtime to meet the implementation of the 2% discounting was about $12,000. The impact on the Department of Social Security was not significant enough to warrant a demand for additional resources.

(b) The net saving during 1986-87 is expected to be about $8.8 million.