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Monday, 26 November 1973
Page: 3828

Mr WENTWORTH (Mackellar) - Nobody can say that the Minister for Immigration (Mr Grassby) is not a fast talker when he is desperate; but it was not quite good enough tonight.

I am told that the Government intends to force this Bill through this chamber without adequate discussion, as it has done with so many others. Therefore I must be very brief.

This is an ill-advised and inequitable Bill. I will not have time to say why it is so illadvised in all respects; but I would have thought that in the present situation of inflation, when more production is needed, a Bill which is aimed at the roots of production is ill-advised. I would have thought also that in the present situation of world instability in economies and prices a drastic Bill of this character is illadvised. However, I will not have time to develop this. I know that some kind of fiscal action is necessary, but I do not think that this is. the correct kind of action at all. There are other means of controlling the excess supply of money. There are other means of meeting the additions to that excess supply caused by the Government's Budget policy in other directions. Those are major matters.

I will deal with only one specific matter; that is, the proposals made in this Bill for the taxing of aged people. They are disgraceful, although they are not as disgraceful as the proposals which the Treasurer (Mr Crean) originally made. When the Treasurer brought down his Budget and, following that, when he issued a statement from his office it was obvious that he was proposing a major assault upon pensioners. His initial proposals were quite disgraceful. When I learnt of these proposals, when the Social Services Bill was under discussion I criticised them in this House. I drew the attention of the country and of the House to some of the gross fallacies in the Treasurer's policy. Subsequently, as a result of that, the Labor Caucus forced the rather reluctant Treasurer to change his proposals and to make them far less inequitable.

Mr Viner - Another occasion on which the Treasurer was overruled.

Mr WENTWORTH - Well, of course, in this case the Treasurer was in a corner because owing to his ill faith in regard to the means test he was proposing in his Budget to take from aged people by way of taxation far more than he was going to give them by any partial relaxation of the means test. It was a swindle. He was found out and, to some extent, he has corrected his course. The change of the base for the rebate from, I think, $2,322 to $3,224 did correct much, not all, of the inequity. I think the Treasurer's original proposals would have taken something like $3 5m or $40m a year from these aged pensioners. I estimate his present proposals will take only another $8m. So at least three-quarters of the iniquity and the inequity has been resolved. But there is still something wrong in the Treasurer's present proposals as they are before the House in this Bill.

I am not opposed in principle to the granting of a rebate as a mechanism for adjusting the aged person's allowance, but I am opposed to what the Treasurer is doing. What he has put in this Bill will hurt certain groups of aged pensioners quite appallingly. Let me first look at the single person who has a taxable income, apart from pension, in the range of, say, $800 a year to $2,000 a year. There will be substantial loss to him, going to about $60 a year. That is not the main facet of the Treasurers proposition. The main inequity will fall on the married pensioner. This comes about because traditionally the married pensioner has had his pension rights adjusted in relation to half the income of the married couple. This does not apply to income tax. It is for this reason that major anomalies arise. Many married aged pensioners whose combined taxable income is in the range of $1,000 to $4,000 a year will lose substantially. Those who will lose most will be those whose combined income is in the range of $2,400 a year, which is not a great amount. Of course it depends on how the income is divided between husband and wife. But in most of these cases the income belongs to the husband because the modest income of aged people is generally superannuation. It is in one pair of hands and taxed in those hands. Some of these people will lose up to $250 a year. It is quite appalling that a married couple will be losing $250 a year by reason of this new tax.

But worse than that, there will be complications in regard to provisional tax. These complications are of such a nature that even the

Taxation Office at the present moment does not quite know how it is going to deal with them. I can say that because I have been in consultation with tax officers in relation to these complications. I am afraid that not only this year but also next year - perhaps next year more than this year - certain pensioners will find themselves in very deep water because of the operations of provisional tax.

It will be said that, after all, the means test is being taken away for people over 75 years of age and that they will get a means-test-free pension. I am not complaining on behalf of people over 75 years of age. I am complaining on behalf of those pensioners under the age of 75 who do not get anything from this Budget and who will have to pay, particularly if married, this large additional tax. It is difficult in this short time to explain these details to the House; I will not attempt to do so. All I say is that these married people, particularly if the income is in one pair of hands, will get slugged this year. When the operation of provisional tax comes upon them - I am not quite certain because the Taxation Office does not quite know how it will deal with this - they will find themselves in very hot water in many respects.

As I have said, I am not talking just for the people over 75 years of age. They do get the advantage of having a means-test-free pension. They get something. But in this Budget the great bulk of pensioners, those under 75, do not get the means-test-free pension. It is an absolute swindle on the part of the Treasurer in this Budget to load these additional burdens on to those of pensionable age below 75 when he is not taking off the means test. Even at this late stage I ask the Treasurer to reconsider and to see whether he might not show a little humanity and equity for a change.

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