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Tuesday, 23 October 1956

Mr CREAN (Melbourne Ports) .- I should like to support the honorable member for Banks (Mr. Costa) in his remarks about this bill. The honorable member for Bruce (Mr. Snedden) had some interesting remarks to make on it and went quite deeply into the amendments that are before us. This is one of those rather complicated pieces of legislation that come to this House at times and which, in many respects, is above the ability of the average layman to decide. I feel that, when measures of this kind are contemplated and an amendment is not required to be made in a great deal of haste, it ought to be referred to a select committee of the House for investigation.

The matter of superannuation is very important. Its origins go back to the days when there were very few welfare State schemes such as we have now and the public servant hoped, at least in conjunction with the Government, to be able to provide against his old age. To some extent that basis has gone now and in a modern community it is accepted that the State, as a whole, should make provision for people in their old age. To some extent - and this matter was aired during the debate on the Estimates - the suppositions that originally underlay superannuation have been cut away. It is time that this Parliament looked at the whole question of superannuation, especially as it effects future contributors, in the light of the community's attitude to such broad questions as the ultimate - and I emphasize the word ultimate - abolition of the means test.

We must bear in mind that the superannuation fund, as we know it, meets the needs of three main classes of people: those who are already drawing their pension; those who have retired or are about to retire, from the Commonwealth service; and those who are at various stages of making contributions. The last is by far the largest class and some members of it will contribute for a great many years yet.

It is impossible merely by looking at the small amount paid into the fund, and the amount going out of it, to come to any clear conclusion about it unless one is also armed with all sorts of statistics as to ages on retirement, likely recruitment into the Public Service and so on. In fact, superannuation is bound up with two aspects of government policy. The first is the number of people who are employed by the Government. This number has doubled in little more than nine years. The figures given in the quinquennial report indicate that at the 30th June, 1947, there were 46,000 contributors and the latest figures available - those for the year ended June, 1955 - give the figure as something like 78,000. It is presumed that, by 1972, that figure will have increased a great deal more.

The second way in which superannuation is tied up with government policy is its relationship to the current interest rate. The actuary conducts his quinquennial investigation on the basis of an estimated interest rate of at least 3i per cent. In 1947, when that percentage was fixed, it may have been quite close to the ruling rate for government securities but, as we know, that rate has now risen to something over 5 per cent. Therefore, the word " surplus ", as it is used by the actuary, should be placed in inverted commas. It is largely an actuary's notional figure.

My colleague, the honorable member for Banks (Mr. Costa), referred to the grievance of many public servants about contributing to a superannuation fund and, as a result, being denied the ordinary social service benefits. Any proper evaluation of this question, at least so" far as it affects the future and the possible abolition of the means test, ought to take into account the fact that the public servant does not contribute the whole of the pension which he ultimately receives. As the honorable member for Bruce (Mr. Snedden) has pointed out, his contribution is largely subsidized from Consolidated Revenue. It is, of course, a contract between the Government and its employees, the terms of which vary from time to time, but the public servant, in urging the abolition of the means test, should realize that, as a recipient of superannuation, his position is similar to that of a person receiving the age pension. The Commonwealth pays the whole of the age pension, and also portion of the superannuation of most contributors to the fund. A little more understanding would be brought to this sort of argument if that were made clear from the beginning.

The figures published by the Superannuation Board indicate that by far the major portion of payments have been made, not out of the fund itself, but out of Consolidated Revenue. That does not hold good for those who are contributing now, because there have been adjustments to both units and rates, and the proportion provided by Consolidated Revenue is lower than in the past. Nevertheless, the history of the fund reveals that, of a total of £25,700,000 paid in superannuation to June, 1954, £19,700,000 or more than three-quarters, has come from Consolidated Revenue. That simply adds colour to the argument that it is rather unfair to say that because some one is receiving £8 or £9 from the superannuation fund he is being deprived of £2, or whatever the difference is between his superannuation and the aggregate of superannuation and social service benefit. What is specifically called a " social service " benefit is more accurately a payment out of Consolidated Revenue. The superannuated employee is getting the major part of his ultimate pension from the same source. Arguments to the contrary should be investigated on their merits. If that is done, one finds that the retired public servant is not in such a difficult position as he imagines.

If, on the other hand - and the community does take the long-term view in these matters - the means test is ultimately abolished, superannuation funds will largely have been superseded. If a person wants to enter into an arrangement with the Government to save and invest for him a certain amount that he will later receive in addition to his pension, that is his own affair, but there will surely be no point in having an elaborate superannuation system, under which nearly 80,000 people make weekly contributions which must be collected and sent to the Superannuation Board. Then the board must determine how the money will be invested, and so on. There would not be much point in having elaborate machinery of that kind if every one of 65 or 70 years of age automatically became entitled to some sort of pension, as a right. It seems stupid to have duplicated machinery of that kind.

The whole question of superannuation, and even of the means test - I am not one who believes that the abolition of the means test should have a very immediate priority - should be looked at objectively and made the subject of some scheme, even if it involves the payment of additional taxes. At least the community will then be aware of what is involved; how much it will cost; and how it is to be financed. A committee could examine the future of Commonwealth and State superannuation in the light of this ultimate objective.

I have taken this opportunity to make a few remarks about superannuation. As the honorable member for Bruce (Mr. Snedden) has said, this is a rather complicated bill and can be read properly only in conjunction with the Superannuation Act as a whole. It is not a field in which most people care to tread, and this is hardly the way in which a measure of this kind should be presented. Such bills, which are not, for the most part, subject to political opposition, could well be examined by an allparty committee.

Sitting suspended from 5.55 to 8 p.m.

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