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Wednesday, 17 October 1973
Page: 2258


Mr LYNCH (Flinders) - by leave- Immediately before the suspension of the sitting for lunch the Treasurer (Mr Crean) informed the House that the Government had decided to extend the range of income over which aged people will be entitled to the full rebate of $156 announced in the Treasurer's Budget Speech as part of an overall pensions and taxation package. The Treasurer commented that it had been intended that the rebate would phase out for taxable incomes above $2,236 but that the Government had now decided, in the light of representations it had received, to propose that the full rebate of $156 would apply for taxable incomes up to $3,224, and a reduction by 25c for each $1 of taxable income above $3,224, so that aged people with taxable income of as much as $3,847 would benefit from the special rebate. The Treasurer went on to say that he would be commenting more about the new arrangements, and the reasons for them, when the necessary legislation was introduced He said that he was confident that they would be found to provide an approporiate set of rules for elderly people.

If that is the Treasurer's judgment it certainly is not shared by members of the Opposition Parties. Although the level at which a full rebate of $156 will apply is to be raised from $2,236 to $3,224 nearly 20 per cent of all pensioners will be called up to pay tax or lodge taxation returns. Pensioners with a combined pension and non-pension income of $37 a week could be liable for tax under the Treasurer's proposals. It is one thing to make pensions taxable for those for the first time receiving pensions as a consequence of means test abolition. It is another to tax pensions payable only after the application of a means test.

Many who this year have their pensions reduced by 50c in the dollar of earnings or superannuation above $20 a week are now to have incomes further reduced by a marginal rate of tax of 15c in the dollar. The combined effect of means test and income tax is that these pensioners lose 57.5 per cent for each additional dollar of earnings or superannuation above the permissible limit. Yet next year, or the year after, depending on their age, these pensioners will receive means test-free pensions as the means test is progressively abolished. The full rebate of $156 is to be allowed to pensioners whose taxable income including pensions is $3,224 or less. The tax liability for a person with a taxable income of $3,224 is S409. Pensioners with this income will, notwithstanding the Treasurer's announcement, still be liable for $250 tax. The tax payable on a taxable income of $37 a week is equal to the rebate of $156 a year. Any pensioner with an income above $37 a week will be liable for tax. Some pensioners who are subject to the means test and currently entitled to the full pension are still to be liable to the tax.

I place on record my appreciation of the honourable member for Sturt (Mr Wilson) who has had a depth of background in this area as honourable members will recognise. He provided me with the statistical basis on which these comments have been made. Having set that scene, let me go on to say that the method of presentation used by the Treasurer is designed to camouflage the imposition of tax on pensioners. As honourable members will know, this Government has deserted the aged, the elderly, the pensioners, the fixed income earners and those people on superannuation payments. I believe the Government stands indicted not for what it has done but for what it has failed to do to ease the plight of these very disadvantaged groups in the Australian community.

That situation is clear from a statement issued by the Australian Commonwealth Pensioners Federation which referred to the Government's position in the last Budget in these terms:

We are bitterly disappointed that the Government has not seen fit to make provision for greater pension increases for those whose only means of subsistence is the pension itself. It would appear that this section of the community, most defenceless, nothing to sell, unable to strike, are to bear the brunt of today's inflationary conditions. It is our view that inflation should be approached with a firm resolve to ensure that the poor do not become poorer and the rich richer. We view the future with no small degree of apprehension.

That is not the Federal Opposition parties in this Parliament speaking; that was a direct quotation from the Australian Commonwealth Pensioners Federation. Therefore, in regard to what the Treasurer has told this Parliament,

I say again that it is a method of presentation designed to camouflage the imposition of taxation on pensioners.

I repeat what I said before: The Government must stand indicted for the manner in which it has left these people defenceless in circumstances of very heavy inflation which this Goverment has deliberately generated to pay for its excessive spending programs. If the Federal Treasurer and the Ministry collectively are intent on seeking to do something for those groups in the community who are most disadvantaged by the inflationary spiral for which the Government must accept major responsibility, they would for the first time in this Parliament be prepared to bring in a total and comprehensive economic white paper designed to provide an effective anti-inflationary policy.

As honourable members know, the real tragedy is that as inflation continues to escalate to ever higher levels, the Government apparently is unable to comprehend what ought to be done at present. The Treasurer's statement is a lamentable excuse for the policy the Government should put down to solve the plight of people in disadvantaged conditions and I believe that, far from commending itself to this House, that statement ought to be condemned.







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