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Thursday, 13 September 1973
Page: 1009


Mr REYNOLDS (Barton) - I rise also to support the Bill. Quaintly enough, despite what we have heard, the Opposition is supporting the Bill. The honourable member for Griffith (Mr Donald Cameron) who preceded me spoke about inflation eating into the pension increases that have been made under the 9-months-oId Whitlam Government. I will come to that point in a moment. I picked up something the other day that fits in nicely with an announcement that was made tonight. I do not know whether the purport of it has hit the Opposition yet, but this was an interview on the Macquarie network weekly broadcast with the former Prime Minister, the right honourable member for Lowe (Mr McMahon) on 24 August 1972. I quote in part from that interview. The questioner, after talking about pension increases, asked the former Prime Minister:

One of Che complaints that I have heard voiced by people calling Open Line to this station has been that whenever something like this happens with pensions -

He was referring to pension increases - all that happens is that such people as the pensioners' landlords take it away again. Can something be done about this?

The former Prime Minister replied, and I think this deserves particular note.


Mr Jacobi - .Which Prime Minister was this?


Mr REYNOLDS - This was Prime Minister McMahon. He replied:

That is difficult because we have no power here, but what we have done in this Budget is to provide that supplementary assistance, that is assistance to those pensioners who have to pay rent, would also be increased by $2 to $4. Regrettably, we haven't a direct influence here. I only wish we had.

In other words, he was pleading for Commonwealth price control. I hope he is still of that mind when in the very near future he gets a chance to do something about that. I have a respect for the honourable member for Mackellar (Mr Wentworth) for what he has done in the field of social welfare. I pay him that respect. Unfortunately he had to battle awfully hard against a very reluctant government while he was Minister. Whilst it was true that he promised to abolish the means test in 3 years, and whilst he promised that the pension would be equitably taxed, what guarantee could we have had about what the then Minister's ideas were about social services as against what his Government believed? He was pleading to abolish the means test when on the other hand his Government was saying: 'It is impractical to do it. It is unjust to do it.' Does nobody remember the other former Prime Minister, Mr Gorton, saying that it was inequitable to be giving pensions to wealthy people while people on low incomes were not enjoying a decent living? Then we have the charade that went on for weeks about whether we were to have a poverty survey. Prime Minister McMahon said at the time that he was not in favour of it. Then the Sydney Morning Herald' of 16 August 1972 carried the headline: 'Government changes its mind: Poverty inquiry assured'. And what paltry terms of reference the inquiry was given. They were such that the present Minister has had to enlarge substantially on them.

Let us look at what inflation has done to the pension increases. When at any time in our history has any government given 2 increases in pensions in 9 months? When has any government ever made increases retrospective to election day? When has any government at the first opportunity it had of bringing down a pension increase, in our case in March, made it retrospective to the date it was elected? Can anybody ever remember those sorts of things? No. All previous pension increases were postdated rather than backdated. According to the previous Government they could not be backdated, but it could backdate benefits for certain people in primary industry when the Liberal Party's partners in the Country Party squeezed its arm hard enough.

I have a table which shortly I shall ask to be incorporated in Hansard. I have shown it to the honourable member for Mackellar. I can refer to only a few of the items in it, because 20 minutes gets by all too quickly. Take age and invalid pensions. This is the realm of social services that is most involved. Last October under the previous Government the pension for a single person was $20 a week. If we take account of the changes in prices from September 1972 to June 1973, to retain its value the pension should have increased by now from $20 as it was under the previous Government to $21.35. But what is the pension under this Bill? It is not $21.35; it is $23. In other words pensioners in real terms are $1.65 better off. Likewise, if I make a similar comparison, we find that married pensioners are $3.68 a week better off, even allowing for the price increases that have occurred. Applying the same exercise to a class A widow with a child over 6 years of age, accounting for these price increases her pension should have risen from $28.50 as it was under the previous Government last October up to $30.42. Instead of being $30.42 it is $32, so she is $1.58 better off. But much more dramatic, of course - the former Minister will always regret that he did not have the opportunity to do this - is that class B and class C widows are on the same rate as class A widows. Why should a woman of say, 58 years of age get about $3 a week less than she would have got when she turned 60 years of age? To the great honour of the present Minister he made all these pensions and all these different kinds of allowances uniform, because he recognised that all widows have common needs in terms of housing, rental, food, entertainment and the rest. A class B or class C widow in October last under the previous Government had a pension of $17.25. If we allow for price index changes she would now be entitled to $18.41, but what does she get? She gets $23. She is $4.59 better off than she would have been, even allowing for the price increases. So much for the rot about inflation eating into the pension increases of this 9-months old Government.

Now I turn to unemployment and sickness benefits. The ordinary rate of unemployment and sickness benefit for a single adult last October at a time when we had very high levels of unemployment, was $17. Allowing for price changes it should now be $18.'15. Instead it has achieved uniformity with other benefits and is $23. So a single unemployed adult person is $4.85 better off in real terms. This is the kind of progress that has occurred within the 9 months term of office of the Whitlam Government. Even more dramatic still is what we have done for young people under 21 years of age if they unfortunately happen to be sick or unemployed. A married couple in this category received an ordinary rate of $25 per week last October. Fancy a married couple being asked to live on $25 a week between them. If we allow for price changes their benefit should now be $26.68. But what is it? It is not $26.68; it is $40.50 under the present Government. They are $13.82 a week better off in real terms, in buying power, than they would have been under the previous Government.

I can go on and give even more dramatic examples, such as the benefit for an unemployed single person under the age of 18 years. A youngster of 16 or 17 was supposed to live on between one-third and one-half of what an adult was given. Tell that to my son. Tell him that he is going to eat about onethird of what I eat. He eats twice as much as I do, and it costs as much to clothe him as it does to clothe me. As recently as last October, before the previous Government went out of power, a person under 18 years received an unemployment benefit of $7.50. If we allow for price changes he should be getting $8.01 now. But what does he get? He does not get $8.01; he gets $23. His benefit is $23 also. He is all but $15 a week better off. How the devil can anybody challenge these sorts of things and say that there have not been substantial improvements? I pay tremendous tribute to the Minister. Unfortunately in the time I have available I will not be able to go through all the items I have listed.

The honourable member for Mackellar, leading for the Opposition, made a point about taxation. I would like to reassure those people who may be listening and all those who are coming to our offices with all this talk about pensions being made taxable. I find that most of the ones who come to my office worried about the taxation provisions are the ones who have to worry the least. They have their pension and little more than their pension, and they will not be touched. As a matter of fact at least 80 per cent of pensioners will not be affected by taxation under this Bill. As a matter of fact aged people with a taxable income, including the pension, of up to $1,921 will not be required to pay any tax or lodge a return. In other words they will be able to have their $1,199 pension and they will be able to earn $722 as well. I am talking about a single person now. A person with an annual pension $1,199 and receiving up to $722 in other income will have no tax to pay and will not even have to worry about lodging a tax return. I know that many of these people are more worried about having to fill in a tax return than they are about paying tax. For God's sake, let them not be worried. Please let us be responsible and do not worry them unduly about it. Most of the people who will be paying tax are very well used to paying tax and know very well how to fill in a taxation return. The Taxation Office will be presenting a booklet shortly that will show everyone specifically where he stands. The age allowance has been abolished not from any surreptitious motive but simply because of this progressive introduction of the abolition of the means test for everybody over 65 years of age. The expert advice is that the age allowance would be 'inequitable, anomalous and outdated'. So the move was necessary.

If the age allowance were maintained we would have the position of struggling young families being worse off than a married couple on the full pension. Under our new rate pensioners could have a total income of at least $75 a week and not pay a razoo in tax. Is that equitable? I shall show honourable members in a moment what happens to other people in the community. They will not pay so much tax anyway, even under our taxation scheme. For those over 75 years of age under our provisions a couple could have a tax free total income of $4,426 net. That would be after deductions for rates and all the other things that are normally deductible. That couple Would get $2,112 net pension and $2,314 age allowance. Such a couple could get $85 a week net without having to pay any tax. So that is why it is inequitable.

On the other hand an ordinary tax paying couple with 2 dependent children, on the Sydney minimum wage of S60.80 a week, allowing for normal deductions would pay tax of $170.70 a year. So we need to have a bit of equity about these things. The simple fact is that we cannot make an extra privileged class way above all the other people who are starting off in life building a family and building a home and doing all the other things that have to be done by a young family - sending children to school, clothing them and the rest of it. So there was no justice. I think that the former Minster recognised this. He also was going to tax pensioners. Mr Deputy Speaker, I seek leave to have a table incorporated in Hansard.







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