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Friday, 24 August 1923

Dr EARLE PAGE (Cowper) (Treasurer) . - I move - That the Bill be now read a second time.

The object of the measure is to give effect to the Government policy outlined in the Budget speech that the invalid and old-age pensions should be increased, and that, in addition, pensioners should be permitted to add to their income without incurring loss through deductions from their pensions. The Bill also authorizes other liberalization of the conditions, which will be explained to honorable members. In introducing this measure a brief outline of the trend of invalid and old-age pensions legislation in Australia may be of interest to honorable members. Prior to the introduction of old-age pensions, the only prospect for the aged who were without means, and whose friends were unable to provide for them, was accommodation in benevolent asylums and charitable homes. The main objection to these institutions was the taint of pauperism, it being considered that they were replicas of the poor-houses in Great Britain. Many children who desired to have their parents Avith them were unable to, because of their own needy circumstances. Families thus became separated, not through lack of filial affection, but through the unfortunate compulsion of poverty. In Australasia the lead in providing oldage pensions was taken by New Zealand, which commenced the payment of pensions in April, 1898. Victoria followed in January, 1907. New South Wales also brought in similar legislation later in the same year, and in July, 1908, Queensland copied the example of the southern States. In the interim the Federal Government had appointed a Royal Commission to consider the whole subject. The chairman of that Commission was the present Minister for Trade and Customs (Mr. Austin Chapman), whose pioneer work in connexion with the payment of pensions in New South Wales before he entered this Parliament, and in the Commonwealth since his entry in this Parliament, are well known to honorable members. As a result of the recommendations of the Royal Commission referred to, the Invalid and Old-age Pensions Act of 1908 was introduced by the Deakin Government, and on 1st July, 1909, the State pensions schemes were taken over and the Commonwealth became entirely responsible for the pension payments. The original Act provided for the payment of old-age pensions not exceeding 10s. a week or 20s. per fortnight to all persons who complied with the . statutory requirements as to age, residence, &c. The rate of pension was governed by the income and property of the claimant, the limit of income, together with pension, being fixed at £52 per annum. The possession of property exceeding £310 in value was sufficient to disqualify a claimant. The Act also provided for the payment of invalid pensions, but the actual payment of these pensions was not brought into effect until December, 1910. The first liberalization of of the pensions law was made in December, 1912, by the second Fisher Administration. Up to that time contributions made by children to their parents constituted income. As a result, many persons were debarred from the benefits of the Act merely because their children maintained them in their old age. By the 1912 Act contributions from children towards the support of their parents were exempted from computation of income. The same Act also provided that the value of the pensioner's home should be exempted from the calculations of property. That has been the law ever since. The value of the homes of invalid and old-age pensioners is exempted altogether. It is worthy of notice, however, that no increase was made in the rate of pension, although the statistician's figures showed that the sum necessary to purchase a certain' amount of food, groceries, and housing had risen from 20s. in 1909-10 to 23s. 5d. in 1912-13, an increase of nearly 20 per cent. The abnormal conditions which obtained immediately following the outbreak of war pressed very heavily upon all sections of the community, and undoubtedly the burden was felt very severely by persons in receipt of invalid and old-age pensions. Nothing in the way of ameliorating their lot was done until September, 1916, when the .second Hughes Administration increased the rate of pension from 10s. to 12s. 6d. per week, and the limit of income from 20s. to 22s. 6d. It may here bo noted that the sum necessary to provide food, groceries, and housing had increased from 20s. in 1909-10 to 27s. 3d. in 1916-17, so the rate of pensions was still rather behind the cost of living. In addition to providing for an increase in the rate of pension the 1916 amending Bill also authorized the payment of 2s. per week to pensioners in benevolent and charitable institutions. No further amending legislation was introduced until October, 1919, when the second National War Government submitted a measure to increase the rate of pension from 12s. 6d. to 15s. per week, and increasing the limit of income from 22s. 6d. to 25s. per week. It will be noted that in all these increases the limit of income was increased by the actual amount of the pension increase. In this Bill the Government propose to depart from that principle, and make more liberal provisions. It is proposed to make the limit of income 5s. higher than previously, although the increase in the rate of pension is only 2s. 6d. When the 1919 amending legislation was introduced, the sum necessary to provide food, groceries, and housing had increased from 20s. in 1909-10 to 33s. lid. In July, 1920, special legislation was introduced by the second National War Government solely for the benefit of blind persons. That Act authorized an increase in the income limit, enabling a blind pensioner and his wife to have between them an income of £221 per annum, including the pension. In the measure now before honorable members it is proposed to increase the maximum rate of pension from 15s. to 17s. 6d. per week, and, in addition, the amount which a pensioner may earn without affecting the rate of pension will be increased from 10s. to 12s. 6d. per week. This will permit a pensioner to have a total income of 30s. per week At present the limit is 25s. Only about 6 per cent, of the total number of pensioners supplement their income in this way, so that any reduction in pension payments must, be due to property disqualifications or something of that nature. The increase in the amount which the pensioners will be able to earn is estimated to increase the expenditure of the . Commonwealth by £150,000. Honorable members will see that this increase has not proceeded in regular steps, and if the provision applied to the whole of the pensioners the increase it would: involve would amount to £250,000, because so many more would be brought within the operation of the double rate. Although the rate of pension has already been increased on two occasions, this is the first instance - with the exception of the occasion upon which the increase to blind pensioners was provided for - in. which provision has been made to allow the pensioner to earn a little more money without affecting the rate of the pension, A single person under this Bill will be able to enjoy an income of pension and earnings up to 30s. per week, whilst the total income of married pensioners may be as high as £3 a week. The latest figures issued by the Commonwealth Statistician - and I had them checked when I introduced the Budget - showed that the cost of food, groceries, and housing, which was 20s. in 1909, is now 34s. 3d. per week. The rate of pension in 1909 was 20s. per fortnight, and, as a result of the passing of this Bill, it will be raised to 35s. per fortnight. Numerous modifications of the Act are proposed, which will very materially improve the position of the pensioners. This is the first time in which any increase has been made really consistent with the increase In the cost of living.

Mr Blakeley - Does the estimate of the cost of living include the cost of clothing ?

Dr EARLE PAGE - I believe, subject to correction, that the cost of clothing is included in the estimate. It will at once be clear to honorable members that the Government proposal is a generous one. Notwithstanding that the cost of living has increased since 1910 the rate of pension will, under this Bill, for the first time be proportionate to the needs of the pensioners. Originally the Act provided that the pension should not be paid to a person possessed of property to the value of £310 or over. Although the limit of income has been increased on two occasions, no corresponding increase has ever been made in respect to the value of property which the pensioner may possess without losing the right to a pension. The Government proposal is a most sympathetic one, and is as generous as it possibly can be in view of the financial position of the Commonwealth at tho present time.

Mr E RILEY (SOUTH SYDNEY, NEW SOUTH WALES) - Does the Bill propose any relief to parents who are keeping an invalid child?

Dr EARLE PAGE - On that subject I may say that a ruling was in existence which limited strictly the amount of the income of parents allowed to draw a pension for an invalid member of the family. One of the first executive acts of the present Government was to liberalize this rule, and many of these cases have since been reviewed and pensions have been granted which previously were refused.

Mr E RILEY (SOUTH SYDNEY, NEW SOUTH WALES) - If I have an invalid son or daughter and am earning £5 or £6 a week, will that income be held to justify the withholding of the invalid pension f

Dr EARLE PAGE -I say that before the advent of the present Government to office there had been an Executive ruling to the effect that in such cases the invalid pension should not be paid where the income df the parents was, I think, £4 5s. per week. The present

Government has decided that the matter shall be at the discretion of the Commissioner of Pensions, after an investigation of the whole of the circumstances of each case.

Mr Fenton - Unfortunately, it is likely that the Commissioner will adhere to the old rule.

Dr EARLE PAGE - That is not so. I am able to say that many cases that have come under my own notice have been reviewed, and pensions have been granted in cases in which they were previously refused because of the rigid way in which the provisions .of the Act had been interpreted.

Mr E RILEY (SOUTH SYDNEY, NEW SOUTH WALES) - What is the limitation now. placed on the earnings of the parents in such cases?

Dr EARLE PAGE - No maximum amount has been fixed. The circumstances of each case are reviewed. This is a matter which requires a certain elasticity of administration, and the object should be to insure the proper attention and treatment of the invalid. I was saying that originally a person was entitled to hold property to the value of £310 without losing the right to an oldage pension. The first alteration in this connexion was made in 1912, when the value of the old-age pensioner's home was excluded from the amount of property which might be possessed. The Government in this Bill continues that pro- , vision, but proposes to raise 'the property limit from £310 to £400.

Mr McNeill - What provision is made in the case of money > which a pensioner may have in a bank'?

Dr EARLE PAGE - That is included in estimating the value of the pensioner's property. Under this Bill, the total amount of property the pensioner may hold without losing his right to the pension will be £400, instead of £310, as at present. The pensioner will still be entitled, as in the past, to a special exemption of £50 before any reduction is made in the pension. In this connexion, the same rate will be applied as in the past, which is £1 a year for every £10 of property, and under this Bill a pensioner having property of the value of £390 will still be able to obtain £12 or £13 a year in pension, despite the fact that he has property of that value in his possession.

As honorable members are aware, there is a large number of pensioners in bene- volent asylums, to whom the Commonwealth pays a pension of 2s. per week each. These pensions are paid for the pensioners' personal use, and it is proposed by this Bill to increase die amount of such pension .to 3s. per week.

Mr Fenton - -It should be 4s. ner week.

Dr EARLE PAGE - The Government's proposal is all that these pensioners themselves have asked for. They asked that the amount should be raised from 2s. to 3s. a week. This will enable old people iia these institutions to have a little more money at their disposal for their personal needs. It is further proposed to provide for the payment of a pension of 2s. per week to a certain class of people who have never before been in receipt of pensions. At the present time there are many inmates of benevolent ' asylums throughout the Commonwealth who are not in receipt of any .pension. They are not entitled under the existing law to the pension unless they leave the institution. These have been in such institutions, in some cases, before the establishment of the Commonwealth, and in many cases before the institution of the Commonwealth oldage pensions system. The Government is correcting .this anomaly by proposing in this Bill to put these persons on the same footing as persons who have received pensions and who are inmates of institutions. These people will in future receive 3s. per week pension, .just as they would have done if they had been in receipt of a pension before they entered the institutions in which they now are.

Mr PARKER MOLONEY (HUME, NEW SOUTH WALES) - Will they be given the pension for the whole of the time they are in the institutions?

Dr EARLE PAGE - Yes. The Government has regarded the fact that no provision for the -payment of pensions to these people is an anomaly under the existing Act. It has operated very harshly. The absurdity of the existing position is clear when I say that if they went out of the institutions in which they now are for a month or six weeks and received the old-age pension to which they would be entitled, they Would, on returning to those institutions, :be eligible for the pension it is proposed under this Bill to give them. This provision will take effect from the date of the passing of the Act.

Mr Gabb - Will these persons 'require to make application in the ordinary way, as they would have to do -if they were outside institutions, in .order to secure the pension of 3s. per week?

Dr EARLE PAGE - I think it would be wise for them to send in applications. All these .cases will, of course, require io be reviewed. The fact that the earning capacity is being raised under this Bill will mean a higher plane throughout 'the whole scale of old-age pension allowances. Many applications which have 'been rejected .or modified during -the last year or so will, under this Bill, be treated in a different way, and my advice to the people in these institutions who .are 'not now eligible for pensions is :to make application for pensions immediately, when they will be placed on the same footing as1 persons who were in receipt of pensions prior to their entering one of these institutions.

Mr Prowse - The pension of those who are now -receiving '2s. will, I suppose, be increased automatically to 3s. 1

Dr EARLE PAGE -Yes 'and in the same

It is also intended to make provision for pensions for inmates of hospitals "who remain in them for more than twentyeight days. As the law stands, a pensioner who enters a hospital -receives no pension while he remains in the institution; but if he remains in the hospital for twenty-eight days or longer he is, on . 'his discharge, paid his pension for twentyeight days.

Mr O'Keefe - Will the Bill' cover pensioners entering hospitals for the treatment of mental cases ?

Dr EARLE PAGE - No. The Act has never included mental cases, as patients in mental hospitals are directly looked after by the States. It is proposed under this Bill to pay the pension at the rate of 3s. per week to a pensioner during the whole of the time he is in a hospital, and in addition he will receive, as under the existing law, twenty-eight days' pension on his discharge. So that pensioners entering hospitals will be in a better position than they have hitherto occupied.

It may be of interest to honorable members to compare the cost of old-age pensions at the present time with their cost when the system was first introduced. When the Commonwealth took over the payment of invalid and old-age pensions in 1909 there were 41,116 pensions in force, involving a liability of £946,000 per annum. On the 30th June, 1923, fourteen years later, the pensions in force numbered 147,453, and the annual liability Avas increased to £5,518,000, or more than five times the amount which was paid fourteen years ago. It is expected that the liberalization of the provisions of the Act will lead to an increase in the number of pensions claimed, and the expenditure will, of course, be correspondingly greater. In my Budget speech I made provision for an increase during the present financial year, of which there is practically ten months to run. This will mean an increase in the expenditure for tho balance of the present financial year of £1,065,000. The total estimated expenditure for old-age pensions for 1923-24 is £6,490,000. The total additional expenditure when the whole year is considered will be between £1,300,000 and £1,500,000. The additional amount is somewhat difficult to estimate, because when the conditions arc liberalized many people who before did not think it worth while to bother about the old-age pension send in their applications for pensions immediately. From the figures I have given honorable members will see that the cost of invalid and old-age pensions represents a heavy burden on the taxpayers, and consumes a substantial proportion of the total revenue of the Commonwealth. The expenditure will, of course, continue to increase as the population increases, and the burden upon the taxpayers will become greater.

Mr Maxwell - The Treasurer has said nothing of the amendment I suggested to him.

Dr EARLE PAGE - The honorable member for Fawkner (Mr. Maxwell) and other honorable members informed me of the anomalous position of certain invalids who have been in Australia for many years, and owing to their arrival here at an older age than three years they were not eligible for pensions. The Government propose to adopt an amendment which will permit of the payment of invalid pensions to persons with a de finite disability after twenty-five years' residence in Australia.

Mr Charlton - It is a long period.

Dr EARLE PAGE - If it were a short period, invalids might be dumped here indiscriminately to obtain a permanent pension. The present Act provides that if they arrive here over the age of three years they are not entitled to the benefit of the invalid pension.

Mr Maxwell - I suggested twenty years' residence.

Dr EARLE PAGE - With that alteration, the Government accept the amendment. Despite the considerable expenditure involved, the Government have fully met the position by liberalizing the pension conditions to enable the aged and infirm, to live in decency and comfort for the remainder of their lives. The Government realize that the provision now being made does not really conform to the needs of the nation, and, if possible, they would have increased the pension to £1. But this would have involved an alteration of the whole scheme of old-age pensions, and as there was no certainty that that high rate could be continued even if, as has been suggested, it were paid for a year or two out of surplus revenue; the subsequent state of the finances might have forced a reduction. The time has arrived when tho whole question of providing for, not merely old ago and sickness both temporary and permanent, but also for accident and unemployment, should bc considered in a comprehensive way and placed on a satisfactory and permanent basis, to. remove altogether the taint of pauperism that might bo attached to the operation of this measure. The Government feel that the pioneers of this country arc entitled to a pension arrived at on a proper basis. It is proposed to appoint a Royal Commission, consisting of members of both Houses of Parliament, to inquire into the whole question of sickness, accident, old age, permanent invalidity, and unemployment, to obtain the data available from all parts of the world, and to submit as early as possible, probably next session, a comprehensive scheme. The names of the members of the Commission will be given either this afternoon or to-morrow morning. By this means a practical scheme on a much more liberal basis than is the present provision will be evolved, and information obtained to enable them to ascertain whether a scheme providing for unemployment can be satisfactorily instituted in Australia at present.

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