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Thursday, 20 November 1941


Sir FREDERICK STEWART (Parramatta) . - I am pleased that this Parliament is able to find the time to discuss a" measure of this character despite circumstances which have necessitated the introduction of a war budget of unexampled proportions. Its presentation explodes the idea that all matters of social reform must be deferred -until the end of the -war. Most of the proposals contained in the measure are the result, of the investigations and recommendations of the Joint Committee on Social Security, which was set up by a previous administration. That committee was given wide, powers of investigation, the terms of reference being " to inquire into and report upon ways and means of improving social and living conditions in Australia, and rectifying anomalies in existing legislation"-. I welcomed cordially its appointment because thereby the subject of social reform was for the first time in Australian history lifted out of the party political cockpit. During the ten years that I have been a member of this House, I have heard criticized much legislation designed to improve the social conditions of the people, not because .of inherent faults in it, but merely because it had been introduced by a party to which the critic did not belong and he believed that it was in accordance with tradition that he, as a member of the Opposition, should oppose it. I am very glad that this piece of legislation represents the first fruits of that change from a party to a nonparty attitude towards social reform. It is merely by political accident that I am not the introducer and sponsor of the measure; at all events, in respect of the majority of its provisions. I have never disguised my unbelief that maintenance of a healthy morale on the home front would mean subtraction from our war effort. I do not consider that the granting of a few extra shillings to invalid and old-age pensioners in Australia, even though the aggregate amount is approximately £2,000,000, is likely to have a serious effect, on our war effort. That view will be contested by some persons, who will say that if we did not distribute another £2,000,000 among pensioners we should be able to purchase an additional £2,000,000 worth of shells and other munitions. That would bc the case if £2,000,000 were saved on the national drink bill or totalizator investments, if the profits of ^munitions manufacturers, or the overtime payments to munitions workers, were reduced. Ways and means of increasing our war effort could be found in many directions other than by minimizing the benefits available to invalid and old-age pensioners. Those who argue that the Commonwealth has not the financial capacity to meet the proposed additional payment are the survivors of those who said only two or three years ago that Australia could not implement a monumental piece of legislation, dealing with national health and pensions insurance, which was introduced and passed through this House with much acclaim, on the ground that the financial structure of Australia could, not stand the expenditure of £2,000,000 a year on the project. At that time, the defence expenditure of Australia was approximately £13,000,000 a year. During the last several weeks two budgets have been introduced providing for a defence expenditure of, not £13,000,000 but £225,000,000. Both the ex-Treasurer (Mr. .Fadden) and the present, Treasurer (Mr. Chifley) indicated, in their respective financial statements that no difficulty would be experienced in raising that amount. The only difference between them was as to the method to bc applied. Apparently there are two methods by which the money needed for the defence of Australia may be raised - the Fadden method and. the Chifley method. Yet three years ago, it was considered that there was no method by which £2,000,000 might, be raised in order to put into operation a piece of social legislation which would have given security and comfort to tens of thousands of our aged and infirm people.

The outstanding feature of this measure, as the Minister (Mr. Holloway) has indicated, is the proposal' to increase the rate of pension from 21s. 6d. to 23s. 6d. a week. The honorable gentleman pointed out, quite fairly, that the effective increase due to this legislation will be from 22s. to 23s. 6d., because an additional 6d. a week would have accrued to pensioners very shortly on account of a rise of the cost of living, under legislation passed by a previous Government. The Minister quite rightly said, that 23s. 6d. is the highest rate at which pensions in Australia' have ever been fixed. It would be equally correct for me to say that this is only the second occasion, in the progress of the payment from 10s. to 23s. 6d. a week on which an increase- has been effected by a Labour Administration ; every other increase has been granted by a non-Labour Government. I shall not be accused of playing at party politics if I draw attention to the fact that, although' the bill contemplates the raising of the pension to 23s. 6d. a week, one of the basic promises made by members of the present Government during an election fought not much more than twelve months ago was that, if they were returned to office, the rate of pension would be increased to 25s. a week. (Speaking on the budget presented by the previous Treasurer, the present. Prime Minister said that, upon assuming office, the Labour party would immediately increase the invalid and old-age pension to at least 22s. 6d. a week, and that, if he had charge of the Treasury, he would ascertain how far he could go beyond that figure, having regard to all of the requirements1 of the country. . It might have been better had that investigation been made before the rate of 25s. was promised, a little over twelve months ago. The extra few shillings a week now contemplated will mean very much to the thousands of pensioners who are to receive it, and I do not begrudge it to them. I also agree with the proposal to allow vs. 9d. of the pension to be paid direct to pensioner inmates of hospitals and other institutions. As the Minister has indicated, these institutions have suggested from time to time that, because the cost of maintaining a patient is very much greater than the full amount of the pension, at. least that sum should bc paid to them. I agree with the honorable gentleman that a moiety should be retained in the hands of the pensioner in order that he may be enabled to purchase personal comforts and amenities which are not usually provided in the regimen of institutions. One could remind the treasurers of those institutions that they might not be reimbursed at all for the service.; that they rendered if pensioners were not receiving Commonwealth assistance.

An important departure from present practice contemplated in this measure is a provision to grant invalid pensions to those who are able to prove So per cent, disability. At present it is necessary to prove total and permanent incapacity. However, the Minister is optimistic if he believes that this provision will enable the department to meet borderline cases.


Mr Holloway - There must be always borderline cases.


Sir FREDERICK STEWART - It is very difficult, sometimes, to establish total and' permanent incapacity. We have frequently had disputes between medical referees on this subject, and I have frequently had to set up a medical board on which I always gave a place to the applicant''.? medical adviser. If it was found difficult to decide whether a person was totally and permanently incapacitated, how much more difficult it will be to decide whether someone is 14 per cent, or 16 per cent, capable, or 84 per cent, or 86 per cent, incapacitated. I shall watch this provision with great interest, and I express the hope now that it will not create more difficulties for the department than it removes. In the past, pensions have been refused to applicants who, though they were unable to prove total incapacity, were physically incapable of providing for themselves. I speak of these matters as one who has had considerable experience of the administrative difficulties.

I approve of the proposal to remove from Asiatics, who are British born or naturalized British subjects, the disqualification which prevents them from receiving pensions. This provision will not affect many persons, but it will remove an injustice .under which some deserving citizens have laboured for years.

The same can be said of the proposal to amend that part of the statute which allows only £25 property exemption each to a man and his wife when both are receiving pensions. A single pensioner is allowed a property exemption of £50, but when a man and his wife both receive pensions, the custom lias been to reduce the exemption for each to £20. I trust that the Government will apply this new principle of recognizing the individual identity of man and wife to its income tax legislation.

Another recommendation of the Social Security Committee, to which this bill proposes to give effect, is that relating to vocational training of invalid pensioners. Up to the present, successive governments have neglected, this duty. If a critical survey of all invalid pensioners in Australia were made, it would be found that many of them could have been made self-dependent if steps had been taken earlier to train them in some vocation. Even now many of them could be restored to economic independence by proper training. I am glad that the committee made this recommendation, and doubly glad that the Government has embodied the recommendation in this measure.

I also approve of the provision designed to amend the family income provisions of the invalid pension statute. A great deal of the credit for this reform must go to the honorable member for Hunter (Mr. James), whose insistence resulted in the passing of a resolution which finds its culmination in this legislation. It is only fair, however, for me to point out that, a similar provision was already part, of the previous Government's budget proposals.

The treatment of encumbered property for pension purposes has caused continual trouble in the administration of the Pensions Act. The Government has made an attempt to remove anomalies, but I suggest that its proposals go either too far or not far enough. It is true that a person's equity in his property is sometimes so affected by the declensions of value that it practically ceases to exist, and presumably the provisions in this bill are intended to meet, such cases. However, my experience has taught me that, even though property be unencumbered, a strict application of the property provisions of the act would be a grave injustice. I have known glaring instances of this. I know one old man in Parramatta who, by thrift and frugality, acquired two properties. He" did not claim a pension until he was 74, which indicates that he was not attempting to exploit the community. He and his wife lived in one of the houses, and he let the other for 20s. a week. However, the value of the second property was more than £S00, so under the statute, the department had no option, but to refuse a pension to him, because, even if the asset were divided between the applicant and his wife, each would still be credited with more than £400, the maximum allowed by law. This man and his wife had to subsist on an income of £1 a week, subject to all the risks and obligations of a landlord, whereas, if he had never saved his money and bought the second property, they could have been .receiving £2 3s. a week without any worry whatever. The fact that these seeming inequities have continued during the period of office of various governments does not indicate that those governments lacked interest in the welfare of the pensioners, but it does indicate that, so long as we are dependent upon the 'Treasury for pension funds, so long will these property provisions remain, and unfair discrimination be practiced against some of the best elements in the community. I trust that it will not be long before we have a contributory pensions scheme to which every member of the community will contribute, and under which all members of the community will be entitled to draw pensions without account being taken of their efforts to make themselves independent. The Minister told us that, as a result of the recent pensions increase, the total pensions bill would reach almost £20,000,000. I remember that, not long ago, no less an authority than, the AuditorGeneral pointed out that unless something were done to stop the continual mounting of the pensions bill, the scheme would break down under its own weight. The same opinion was expressed by a royal commission, and that was when the total bill was a long way short of £20,000,000. The pensions scheme will always he in danger so long as we must depend upon the Treasury to find the money. Not many years ago, a Commonwealth. Treasurer was compelled most reluctantly to reduce the rate .of pension, because of the inability of the Treasury to find the money. That is why, in England, New Zealand and the United States of America, the pensions system has been supplemented, when it has not altogether been replaced, by a contributory system. There is on our statute-book provision for a contributory pensions scheme, and I .am now free to disclose the fact that, five days before the outbreak of war, the Government authorized mc tq reintroduce the old-age and health pensions schemes on a much more liberal scale than previously. Mr. Mulcahy. - The honorable member always makes his run too late.


Sir FREDERICK STEWART - I am prepared to allow my career to be compared with that of the honorable member for Lang (Mr. Mulcahy) so far as efforts on behalf of the poor are concerned. The Minister .said that another recommendation of the parliamentary committee, one which was not embodied in this legislation, hut which was under consideration by the Government, was that providing for the removal of the disqualification of aborigines to draw pensions. Still another was that war pensions should be disregarded when calculating income for pension purposes. I hope at a later stage to support a supplementary measure embodying these reforms. It has always seemed to me to be an anomaly that, among the very few classes of persons who arc denied the right to draw pensions, we should have placed our own Australian natives. This disqualification was removed- by the last Government for child endowment purposes, and I trust that the experience gained in the operation of that measure will enable the Minister to introduce a similar reform in respect of pensions.

The omission of war' pensions from income calculations is a. necessary complement to action taken by me soon after the outbreak of Avar. It was pointed out to me that pensions enjoyed by invalid women whose husbands had enlisted li adbeen stopped because their maximum income, including the pension, would be more than £114s. a week, the maximum permitted under the statute. Upon enlistment, the husband always had to make an allotment of 3s. a day to his wife, who was also entitled to receive 3s. a day in her own right, so that her total income from both sources was £2 2s. a week. If the provisions of the statute had been strictly applied, the pensions would have been stopped. But as the result of action which I took, because I held that no invalid pensioner should suffer because her husband had enlisted for active service, those pensions have been continued. I hope that the Minister will not vary that procedure. If the husband were killed while he was on active service, the widow would lose the payment of £2 2s. a week from the Army, and would receive in its stead, only a small military pension. If she had been deprived of her invalid pension, she would be reduced to straitened circumstances. This provision, which I was bold enough to override - I knew that I was breaking the law, but 1 am prepared to answer for my action to Parliament and to my constituents - is one of the few surviving relics of the Financial Emergency legislation which was passed in 1 931. I shall be happy to support any proposal that is calculated to validate my action regarding this matter.

The Government, in presenting this bill to Parliament, is rightly building upon the foundations which were laid by the previous administration. The Minister will find in his office a number of other foundations for social improvements, which were laid by his predecessor, and I hope to have the privilege of assisting him to erect upon them a superstructure that will be of substantial benefit to the general community.







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