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Monday, 22 September 2008
Page: 5187

Senator COONAN (Manager of Opposition Business in the Senate) (1:05 PM) —I move:

That this bill be now read a second time.

I seek leave to table the explanatory memorandum relating to the bill and to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—


This bill entitled Urgent Relief for Single Age Pensioners Bill 2008 is being introduced by the coalition to promote urgent and immediate relief for Australia’s single age pensioners who are finding it virtually impossible to live on the basic pension of $273.40 per week.

This bill provides for an immediate additional payment of $30 per week for recipients of the single age pension, recipients of the widow B Pension, and recipients of the single service age pension.

It has become necessary to take this action for these pensioners following the failure of the government to take any steps to remedy the financial stress being experienced by Australia’s most vulnerable citizens in the immediate future.

The coalition has stepped into the breach left by the government’s failure to act, following admissions by the Prime Minister and other senior ministers in the government that he, and they, would not be able to live on the single age pension.

The government’s inaction on pensions has been rightly condemned across the board. It has been compounded by the receipt in March 2008 of an 83-page submission by the Treasury addressing the inadequacy of the pension and generating options to address this need. The government has made it abundantly clear that no action will be taken until the completion of the Harmer review in February 2009 which in turn will feed into the Henry review on taxation. This is not due until the end of 2009 which means that relief for pensioners will be effectively postponed until 2010 at the earliest. This is simply not soon enough to meet the urgent and immediate need of single age pensioners for relief from the increasing cost of living pressures.

The case for an immediate increase is compelling. The Senate’s own committee inquiry into the cost of living report presented in March 2008, outlined in detail the critical circumstances of many pensioners due to the increased cost of living since November 2007, and the Howard government’s last budget.

The coalition in government had a strong record of assisting aged Australians, introducing the utilities allowance in 2005 to assist older Australians with meeting everyday household bills such as electricity and water. The coalition government increased the pension by 57 per cent in normal terms or 24 percentage points above inflation. This was through good economic management and adjustments to the pension when needed.

The coalition government legislated to set the maximum single rate of the pension to at least 25 per cent of male total average weekly earnings, MTAWE. This meant that whenever pensions were adjusted for increase in the CPI, and the pension rate fell short of the 25 per cent MTAWE then there would be a top up equivalent to 25 per cent of MTAWE and, in addition, provided three one-off bonuses.

The coalition accepts that single age pensioners must have urgent relief to meet essential cost of living pressures and that they cannot wait until the Henry review is completed as proposed by the government.

The provisions in this bill will not stop or inhibit the deliberations of the Henry review, but it will provide immediate relief to our most vulnerable citizens.

Due to the careful fiscal management of the former Howard government, the Rudd Labor government has inherited surpluses of $94.4 billion dollars over five years. The government has inherited a strong fiscal position and can responsibly re-order its priorities to assist Australia’s most financially disadvantaged age pensioners who are faced with unjustified delay.

This bill will increase the single age pension, single age service pension and widow B pension by $30 per week, with effect from 20 September 2008.

The single age pension will increase from $273.40 per week to $303.40 per week. (The coalition notes that the single pension is set to increase to $281.05 per week from 20 September as a result of indexation.) So a $30 increase on this will bring the single age pension to $311.05. It will result in the single pension currently at 59.9 per cent of the couple pension, to being 66.4 per cent of the couple pension.

This one-off boost to the age single pension is the first step by the coalition to deliver a comprehensive policy in relation to pensions, income support, veterans support and carers over time. Assistance for single age pensioners is an immediate priority due to the urgent circumstances facing many recipients struggling to cope with escalating costs of living. The coalition will continue to address the further concerns being raised by pensioners and pension groups.

The coalition recognises that the single service pension is not a welfare payment, however for the purposes of this bill, the term ‘single pensioners’ refers to single recipients of the age pension, widow B pension and the age service pension.

The number of pensioners who will be affected by the provision in this new bill is 928,834 Australians, at a cost of $1.45 billion dollars.

The total of 928,834 pensioners includes 857,229 single age pensioners, 700 widow B pensioners, and 70,905 single age service pensioners.

The Rudd government has a $21 billion dollar surplus this current year inherited from the Howard government’s strong fiscal management in previous years, and must enable this immediate relief to flow to single age pensioners.

The coalition calls on the government to expedite further urgent consideration of the needs of all pensioners who cannot wait until 2010 for a comprehensive and thorough response to their needs.

The government must not dither and hide behind reviews while Australia’s most vulnerable age pensioners are living under unbearable financial stress.

I commend the bill to the Senate.