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Thursday, 14 May 1942

Senator ALLAN MacDONALD (Western Australia) . - This bill is not a portion of any new social order ; it is one of a series of bills to increase invalid and old-age pensions. I cannot see in it any signs of the new order we hear so much about, but the details of which are difficult to discover. We debated a pensions bill in this chamber not long ago, and the Government then gave an undertaking to the people that at a future date it would propose an increase in the rate of invalid and old-age pensions to 25s-. a week. I supported the Government on that occasion, and I now admit that the increased amount is necessary for several reasons.

When the last pensions bill was before us, we had a concomitant measure in the form of a sales tax bill. After the Government had fired a few shots into the old-age pensioners' cost of living with the sales tax gun, it helped them a little by increasing their pensions. In this instance the rate of pension is being increased, but later an increase of the sales tax will take away from the pensioners some of the increase.

Senator Collings - All basic needs are exempt under the Sales Tax Act, and the honorable senator knows it.

Senator ALLAN MacDONALD - I have yet to learn that a sales tax will not raise the cost of living, and I believe that no exemption will affect that economic fact. The Minister cannot adopt that attitude in this chamber. The increased sales tax will no doubt take quite a lot off the small increase of pensions granted under this bill. Whatever exemptions are made, it will be very difficult to stop increased living costs. When one realizes the increased cost of tea, tobacco, beer, matches and other commodities that old-age pensioners have to obtain every week out of the small pittance received, it makes one a little depressed. I am afraid that increased costs are inescapable. Regardless of how heavily we may hold down the lid of costs the lid will continue to rise. The proposed increase is well deserved, and I congratulate the Government upon the introduction of the bill.

During the discussion on a previous pensions bill, I mentioned a matter that I now. wish to repeat. Some consideration should be given to those elderly persons who have provided in some measure for their old-age by taking out life assurance policies. Often, the surrender value of a policy is such as to preclude an elderly person from obtaining a pension, or, in other cases, to entitle him only to a reduced pension. Such persons are usually loath to allow their policies to lapse in order to qualify for a pension. Many of them have been paying annual premiums for a number of years to keep the policies operative, and the premiums have been hard to raise. I should think it would not be impossible to devise a scheme whereby they could still obtain a slightly higher pension than many of them have to-day. I do not like the idea of their policies being surrendered, and I have advised many of them not to surrender them; but, unfortunately, some of them have to do so in order to obtain a pension with which to meet their dire and urgent needs. I should imagine that the Treasurer could put. forward a proposal to meet such cases, of which there are many in the Commonwealth. If any one is entitled to special considerationit is. those elderly persons who have for years been saving in the form of annual premiums. Their spirit of thrift should be encouraged in every possible way, and one method of doing so would be to give them special consideration under the Invalid and Old-age Pensions Act.

The Leader of the Opposition (Senator McLeay) urged a contributory system of pensions. I have always been in favour of national insurance . covering old-age pensions on a contributory basis. Governments will have to look ahead and anticipate an increasing pensions bill, and therefore steps should be taken in the near future to grapple with the problem before the cost becomes too great. I cannot imagine any better scheme than one under which the recipients of a pension contribute to its cost.

Senator Cameron - The unemployed could not contribute much.

Senator ALLANMacDONALD.Under a comprehensive national insurance scheme, the unemployed would participate in the benefits, but, of course, the Government could not extract from them money that they do not possess. I have pleasure in supporting the bill.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

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