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Wednesday, 3 October 1956


Mr FOX (Henty) .- I wish to direct my remarks to the subject of pensions. This Government has been subjected to considerable criticism by members of the Opposition because of its attitude to pensions and the amounts paid to pensioners. They have said a great deal about pensioners being better off under a Labour government, and have asked this Government to restore to the pensioner the conditions they enjoyed under a Labour administration. Some honorable members opposite have gone so far as to say that the pension rates should be increased to the equivalent of 50 per cent, of the basic wage. These are very fine sentiments, and read well when given publicity in the press, but do they represent the true opinion of the Labour party? In my humble view, a person should be judged on what he has done, and not on what he has promised to do.

With that in mind, I have traced the history of the basic wage since its inception in 1921, and of the Harvester award before that, and the relation that then existed between standard wage rates and pensions. This is what I found: The age pension was first introduced by a Liberal government in 1909. The rate then was 10s. a week, or 22 per cent, of the then award wage of 45s. 6d. It was not altered until 1916 when a Labour government increased it to 12s. 6d., or 20 per cent, of the then award wage of 63s. 6d. a week. In 1920, a Liberal government increased the pension to 15s. a week, which was 17i per cent, of the then award wage of 85s. 6d. In 1923, a Liberal government restored the pension to 20 per cent, of the basic wage, which at that time was 85s., by increasing the rate to 17s. 6d. In 1925. the same government increased the pension rate to 20s., the equivalent of 23 per cent, of the basic wage of 84s. 6d. Between 1942 and 1944 the Labour government, by a series of quarterly adjustments of 6d. increased the pension rate to 26s. 6d., equal to 28 per cent, of the basic wage of 97s. During its term of office the Labour government made three further increases which brought the pension to 42s. 6d., equivalent to 36i per cent, of the basic wage of 1 16s. Between 1949 and 1955 the Liberal Government has granted five increases, the last of which was of 10s., which brought the pension to 80s., or 33;\ per cent, of the basic wage of £12 a week.

The highest percentage granted under a Liberal government was 36 per cent, in 1950, and ' the highest percentage granted under a Labour government was 36i per cent., or thereabouts, in 1948. I am not referring to these figures in any critical way, but only to indicate that Labour professes one belief in opposition and an entirely different belief when in office. Al no time during Labour's term of office has the rate of pension exceeded approximately 36 per cent, of the basic wage, and yet we have some members of the Opposition suggesting that the rate of pension should be increased to 50 per cent, of the basic wage. Incidentally, of the 80s. pension paid at present Liberal governments have provided 56s. 6d. and Labour governments 23s. 6d.

Pensions provide a popular means of criticizing the Government by playing on the sympathies and emotions of the public. Let us look at the present conditions governing eligibility for age pension. An aged couple may own their own home to any value, and their own furniture including refrigerator, washing machine, radiogram and even a television set. to any value, without prejudicing their eligibility to pension. They may own a motor car of any type. They may have between them insurance policies worth £1.500 and have an income of £7 a week from superannuation, yet still qualify for the full double pension of £8 a week. Is it reasonable i.i talk about increasing the general rate of pension paid to people who have no family to keep and no rent to pay? To increase the rate of pension by 10s. a week would mean that, with superannuation of £7 a week, the joint income of such a couple would become £16 a week compared with the £13 a week earned by a man on the basic wage, who might have the responsibility of bringing up a family, and would be paying rent. I know that there are quite a number of pensioners who are not in the fortunate position of owning a home and having an income apart from pension, and are therefore forced to rely on the pension. Those people should undoubtedly be helped, and for that reason I commend a scheme mentioned by the honorable member for Sturt (Mr. Wilson) in this Parliament. That scheme provides that the Government should examine the prospect of establishing a hardship pension for people who really need something over and above the general rate of pension. One honorable member mentioned a contributory scheme that was introduced in England. 1 am not in favour of that scheme, because only wage-earners, as such, are allowed to contribute to it. Indeed. I know of a person in my electorate who was not eligible to contribute under the scheme because she was a nurse and her husband was a station master, and they were therefore regarded as professional workers and not eligible to contribute to a superannuation scheme.

I do not want to traverse ground that has already been covered, because the honorable member for Sturt has on many occasions dealt with this subject, and has stressed the need for a contributory scheme for national insurance. I believe that we shall always have dissatisfaction unless a scheme of this nature is introduced.

Sitting suspended from 6 to 8 p.m.


Mr FOX - Prior to the suspension of the sitting I had stated that I was in favour of the complete abolition of the property means test for the reason that it destroys all incentive to save. People who save and make themselves ineligible to receive the pension under the property means test, feel that their thrift has been penalized when they see their neighbours, who received as much during their working life but wasted their substance in riotous living, collecting, as a reward, a pension from the government.

I recommend that the committee closely examine the scheme submitted many times by the honorable member . for Sturt (Mr. Wilson).

I am also in favour of completely abolishing the income means test, as I believe it also destroys the incentive to work and in that way has a highly inflationary effect. When the age pension was first introduced in 1909 a man's expectation of life was a little over 51 years. As a matter of fact, I have had recourse to two publications, one a United Nations publication and the other an American almanac, which contained the information that the Metropolitan Lite Assurance Company of the United States in September last year reported that the average life expectancy of the American wage earner, based" on the mortality tables of insured workers, was 69.8 years. It also estimated that in a few years the life expectancy of this group would pass the biblical age of three score years and ten. In 1879-89 the life expectancy of this group was 34 years; it has been gradually climbing since. That company also reported that persons aged 65 years in 1954 had a life expectancy of another fourteen years. In 1900-02 life expectancy in the United States was 49 years, and in 1909. the year when age pensions were introduced in Australia, it was 5 1 .5 years.

Those figures prove to me that when age pensions were first introduced a man reaching the age of 65 had little, if any, of his working life left. The age pension was meant to supplement whatever meagre earnings he could make. I do not think the Government visualized then the tremendous amount of money pensions would cost in these days. To-day, many workers are capable and desirous of working after they reach the age of 65, but are prevented from doing so because of the income means test. As soon as a man receives an income greater than £7 a week the pension that either he or his wife, or both of them, is receiving is reduced accordingly. As I stated previously, this has an inflationary effect, and for that reason I believe the means test should be abolished. If the means test were to be abolished workers could work contentedly for as long as they wished, knowing they were entitled to the same reward as those of their brethren who, for various reasons, did not desire or were not able to work. As wage earners, of course, they would contribute to the social services scheme in that they would be paying income tax and thus the burden on the Government would be correspondingly reduced.

I wish to refer to one other item. Reference has been made to the fact that the pension to-day will not buy as much as it did previously. The same applies to wages. Honorable members opposite speak about the Chifley £1 almost with awe and reverence as though it was something sacred and certainly the most wonderful £1 in the history of this country. Compared with previous £l's the Chifley £1 was highly inflationary. The £1 has been losing value ever since I can remember, and for a long while before that. I began work in 1928 on £1 a week, which was a pretty good wage. I received ls. a week as pocket money. In 1936 I was married on £5 a week, but my wife and I kept house on 30s. a week. Our gas bill amounted to 8s. and our electricity bill to 30s. a quarter. In those days I could buy a suit of clothes for £4. If we go further back, before World War I., a shave cost 3d. and a haircut cost 6d. In one hotel in Melbourne free counter lunches were given to any person who bought a packet of cigarettes for 3d. Down-and-outs were able to buy a packet of cigarettes for 3d., have their free counter lunch, sell the cigarettes and then use the same threepence for the rest of the week.

My father boasted to me that he worked for 2s. 6d. a week. To borrow an expression from the honorable member for East Sydney (Mr. Ward) I say, "So what?" What does that prove? Probably my father's father, and his grandfather before him, could prove that they had worked for less than that. But the fact is that as the £1 has lost purchasing power the standard of living has gradually increased; and it has never been higher than it is to-day. Australians now have more motor cars, refrigerators, washing machines, radio sets, and radiograms than ever before. But one cannot live in retrospect. People in the world of sport tell us that Phar Lap was not as good as Carbine, that Bradman was not as good as Trumper, and likewise in other realms that Greta Garbo was not as good as Bernhardt and that Anthony Eden is not to be compared with Disraeli. 1 say, let us get on with the job we have to do to-day before it is too late.

On that point I should like to conclude with a quotation from Patience Strong, who wrote something which I think is particu larly applicable to this critical attitude of comparing to-day's values with those of the past. Incidentally, I might say that honorable members opposite conveniently forget that they are getting very much more of these so-called depreciated f l's than they were getting in the days of the Chifley £1 . Patience Strong wrote -

No secret key will open the gales of yesterday, when they have closed behind us. We have to go our way along the path that opens upon the present scene; not gazing back in longing on things that might have been. Why travel overladen with burdens of regret, with grievances and grudges? Forbear, forgive, forget. Cast oil your sins and sorrows, for peace and pardon pray, before God locks behind you the gateways of to-day.







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