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Tuesday, 1 October 1935

Mr CASEY (Corio) (Assistant Treasurer) [9.59 J. - I have no desire to take a debating point on the wording of the amendment, but I point out that the burden which this bill imposes on the budget is about £70,000. Spread among the existing 280,000 pensioners this amount would provide, not a complete restoration of the pension to £1, but the insignificant sum of one penny a week to each pensioner. An alteration to this bill to give an additional 2s. a week to the pensioners, without placing an additional burden on the budget, is quite impossible.

Mr RIORDAN (KENNEDY, QUEENSLAND) - What amount has the Government remitted by reducing the tax on income from property?

Mr CASEY - That question is hardly relevant; but the amount is comparatively insignificant. The Government is proposing to restore 1 per cent, of one of the heaviest of the emergency taxes. It is difficult to estimate the additional cost of a complete restoration of pensions to £1 a week. Approximately, the figure would be in the vicinity of £2,000,000 per annum. The increase of the total cost would be not merely the 10 per cent, of the existing pensions bill, but that proportion plus a considerable amount more. The higher the pension, the more pensioners come on the list, and the total burden becomes higher because of the encroachment on the allowable income. So the total cost would be about £2,000,000, assuming that the present proportion of full pensions were maintained. In the last financial year, when the allowable maximum pension was 17s. 6d., the average payment was 16s. 9d. Members of the Opposition should not overlook the fact that in the last financial year the pensions bill amounted to £11,750,000, and this year it will be £1,000,000 more. To my knowledge never before in the history of pensions has there been an increase of so much as £1,000,000 in one financial year. The pensions bill for last year was the highest ever recorded in the Commonwealth, and this year it will be increased by another £1,000,000.

Mr Beasley - What does that indicate?

Mr CASEY - The significance of the increase is that a large number of people are reaching the age at which they can claim pensions. The Australian population has passed through a peculiar phase in the last fifteen years, and a disproportionate number of persons are reaching old age. That trend is continuing, and the pensions bill may he expected to increase steadily year by year.

Mr James - Is that a. sign of prosperity?

Mr CASEY - The question of prosperity is not involved. Several factors are operating to increase the number of persons of pensionable age. Last year after allowing for deaths and surrenders of pensions the net increase of pensioners was 13,500. For this year an increase of 14,500 is estimated. Such figures cannot be lightly brushed aside; this is an enormous burden to be borne by a country with Australia's production of wealth. My sincere hope is that Australia will continue to be in a position to meet this bill on the same scale as at present, together with the other increases of expenditure which it will have to face. While the total cost of pensions is of great concern to the Government, the chief interest to the pensioner is the amount he or she receives each fortnight. But more important is the purchasing power of the pension, which to-day is greater than at any other time in the history of old-age and invalid pensions in Australia. I could quote figures showing the effective purchasing power of the old-age pension from 1910 onwards, but I ask honorable members to believe that the recent increase of 6d., bringing the pension up to 18s., gives it greater purchasing power, both in theory and in practice, than when the pension stood at £1. Honorable members should not overlook the fact that in order to maintain that purchasing power, the Government has provided for the rise of the cost of living, and the increase of 6d. a week which took effect from the 1st July last will add £350,000 to the pensions bill this year.

Another test of the fairness of the present rate of pension is a comparison with the basic wage during the past ten or fifteen years. The proportion that the pension bears to the basic wage is higher to-day than ever before ; it has risen from 16 per cent., its lowest point, to 27.3 per cent, to-day. Countless times in this chamber, it has been demonstrated that the pensions system in Australia is the most liberal and humane in the world. I make that statement without any qualification whatever. The systems in Great Britain, New Zealand, Canada and South Africa most nearly approach that in Australia, but on all counts - the age at which the pension is available, the actual amount of the pension, the other income allowable, the residential qualification, and the total per capita burden of the pensions system on the people as a whole - the Australian pension is easily the most liberal.

Mr Holloway - Why not bring this matter to finality by admitting that the

Government's policy is not to restore the pension to fi a week?

Mr CASEY - For me to attempt to forecast the Government's future policy would be altogether wrong. I can deal only with the present and immediate past. A great deal of what has been said about the Government's attitude towards pensioners, and the hardships it has inflicted upon them may have some rhetorical effect but cannot be sustained by logical argument. The Government has a clear conscience in respect to pensioners, and is not ashamed of the manner in which it treats them.

The honorable member for Melbourne Ports (Mr. Holloway) stated, in an unguarded moment, that eminent economists throughout the world would support him in the proposition that, in order to achieve greater prosperity, purchasing power should be stimulated by increasing pensions and other government payments. Upon reflection I think that the honorable member would probably not make so broad a statement. The incomings and outgoings of the Government have to be balanced. For instance, if we were to double the pension bill we should have to double the direct taxation, and that would produce a state of affairs considerably worse than now exists. Invalid and old-age pension payments in the last financial year absorbed more than the whole of the Commonwealth's direct taxation and about 20 per cent, of the taxation from all sources, direct and indirect. Honorable members have referred to the amount of taxes remitted to people who, they claim, can well afford to pay them. The budget speech which I delivered in this House a few days ago did not show any very pronounced remissions of taxation to such persons; in fact, a large section of the population, which is not the least vocal, is not at all satisfied with the relief given to taxpayers. One of the many reasons why the Government has not been able to remit more of the emergency taxation, some of which is very heavy, is the necessity to maintain pension payments on the present scale. And I repeat that the burden on the present budget will be fl,000,000 more than it was last year. I suggest that the Leader of the Opposition (Mr. Curtin) has no case against the Government on this account. The Govern ment has a clean sheet in respect of pensioners, and i3 unable to accept the amendment.

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