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Tuesday, 13 September 1983
Page: 662

Mr KEATING (Treasurer)(3.35) —One would like to be a fly on the wall of the coalition Party room when the Opposition is deciding the orders of the day or the business for the week just to hear the tone of the conversation. Not that there would be any discussion about equity, fairness, what is right, fiscal responsibility or restraining the deficit; there would be none of that. The stock in trade of the coalition parties for donkey's years has been naked opportunism. It is the same old thing in opposition. Honourable members opposite do not understand that although the job of an opposition is to oppose, it should do so on a basis of principle or fairness and that, indeed, there is a logical point of argument upon which to put a counter view. That is the basis of opposition-the constructive development of an alternative viewpoint. What we see from this Opposition is a Bonnie and Clyde operation. Honourable members opposite come into this House and shoot at anything that stands still. They enter into debate in a most opportunistic sense. They try to undermine any proposal by Government, regardless of whether it is sensible and equitable or otherwise.

The fact is that the Opposition displays extraordinary gall in raising this matter of public importance. In seven years in government the Liberal Party did absolutely nothing about the rising cost of retirement subsidies and benefits. Yet we hear the Leader of the Opposition (Mr Peacock) and the Deputy Leader of the Liberal Party (Mr Howard) talk about how they would reduce the Commonwealth Budget deficit this year and in the years thereafter for the purposes of fiscal policy. How do they think these deficits will be reduced when, in fact, when one looks at their performance in government and at their last Budget, one sees that they were damming every creek and river they could identify? They were handing out give-aways to try to smarm their way back into the electorate's good favour in marginal seats throughout the Commonwealth.

Mr Chynoweth —A fistful of dollars.

Mr KEATING —As one of my colleagues says, we saw the return to the fistful of dollars syndrome which we saw in the 1977 election campaign. Indeed, whenever one looks at the performance of this Opposition one sees nothing but opportunism in every respect. I cannot see how honourable members opposite can argue that there should be smaller deficits. When this Government attempts to do something about the way the taxation system operates today, the haemorrhaging of the social welfare area and the retirement welfare area generally, the circumvention of the incomes test for pensions and the generosity of the taxation treatment for superannuation as the preferred form of saving, in every respect we find from the Liberal Party certainly not a coherent and co-ordinated policy on retirement income but a coherent and co-ordinated policy of opportunism, which is about all they are good for. The difference between this Government and the Opposition is the fact that whenever a tough decision has to be made for the good of Australia, whenever a decent decision has to be made for a fairer society, it is taken by the Australian Labor Party and never by the Liberal and National parties in coalition.

The fundamental objective of the Government in its policy on retirement incomes is to see that adequate resources can be devoted to those people in society who are in genuine need. That objective gives the Government's policies their coherence and co-ordination. We reject absolutely the charge by the Leader of the Opposition that ad hockery is the key note of the Government's policies in respect of the retirement incomes area. Indeed, coherence and co-ordination, which have been part of the systematic review by the Government of the retirement incomes area since taking office this year, have, in fact, caused the Government to make substantial changes in this area.

What is the Liberal Party's policy? The Leader of the Opposition talked about the Deakin memorial lecture as if, in some way, it was his reply to Malcolm Fraser's attempt of a few years ago. Malcolm Fraser did have views. I did not agree with his views but he did have very firm views. But the Leader of the Opposition is like some sort of a dough-boy who comes into this House. He has no views. He is completely pliable. His views are shaped by yesterday's headlines and yesterday's leader writer. So he should not wheel up to us what he said at the Deakin memorial lecture because that speech would have been whistled up by some speechwriter who was probably on the payroll of some company, as most of his speechwriters have been in the past. We all know who was paying whom, do we not, when we talk about the staff of the leader of the Opposition. In fact, one can look at all honourable members opposite. How dare they charge anybody else. One can look at the former Prime Minister. He had Keith Compton Gale as his adviser. Mr Gale ended up in gaol. One can look at the Leader of the National Party (Mr Anthony) who visited his friend who was in Long Bay for most of 1982. The Leader of the Opposition had Mr Simon on his staff. He was being looked after, as the Leader of the Opposition indicated earlier, by-

Mr Peacock —By whom?

Mr KEATING —I happen to know but I will not say. But the honourable member knows , as I know. The substantial point is that the honourable member admitted that he was paid by somebody else and that is it. So the simple point is that the honourable member should not point any fingers at anybody else. We will not hear any more about the Alfred Deakin memorial lectures. I knew the Leader of the Opposition, in his days in opposition, when he was, as the Prime Minister (Mr Hawke) calls it, the interregnum, the pause, the period when he decided to do a Malcolm Fraser on Malcolm Fraser by resigning in a huff. When we were in opposition we would wander past his door and while other more studious people were trying to cram a few facts he was flicking over cards and playing a game of cards with himself or with Barry Simon, who would whistle up a cup of coffee at the drop of a hat and discuss the day's events. That is the sort of deep thought that this gentleman has put into policy, so he should not tell us about the Deakin memorial lecture. We are not impressed at all.

The point is simply this: This Government is committed to do something about equity in the retirements area. Honourable members know that the superannuation area was indeed a cost to revenue of about $2.4 billion each year and in the whole superannuation and welfare area of about $20 billion. I find it unbelievable that the Leader of the Opposition comes in here with this sleazy proposition suggesting that the Government should not worry about the haemorrhaging of the social security vote, that it should not worry about spending money where money should be spent but that all we should do is just keep paying it out while we suffer the Opposition's attack about the size of the Budget deficit or about what it claims is our lack of fiscal responsibility.

I make this point about superannuation: The superannuation changes were long overdue. There was a terrible inequity between, first of all, those in superannuation and those outside superannuation and a terrible inequity between those people who were taking a superannuation pension and those who were taking a superannuation lump sum. If two people joined the same employer on the same day, joined the same superannuation fund, paid the same contributions and 30 or 40 years later had the choice of taking a superannuation pension or a lump sum, the person who took the superannuation pension would be taxed at the full rate, whereas the person who took the lump sum would be taxed on 5 per cent of it. Depending on his marginal rate of tax, if it were 30c in the dollar he would be taxed at a rate of 1 1/2 per cent and if it were a maximum marginal rate of 60 per cent he would be taxed at a rate of 3 per cent. So there was this terrible inequity of 1 1/2 per cent to 3 per cent compared with 30 per cent which applied in respect of a person who took a superannuation pension. That is an inequity which needed to be addressed. It was also an inequity which meant that because of the existence of certain devices people were using lump sums, from which there is a cost to revenue, to provide for superannuation. People were, in fact, taking superannuation and double dipping on the system by moving around the income test, using the devices which we more than indicated on a number of occasions.

This is a very big change to the income tax law. The Government recognises that so we announced changes, in principle, in May. We said that from that day thereafter we would sit down with the superannuation industry, we would sit down with interested parties and we would do all within our power, within a short space of time, to see that all of the difficulties and peculiarities of various types of superannuation were taken into account in the changes. That I believe was the most sensible and reasonable thing to do. It could not have happened that from day one, in some way, Commonwealth officials could have snuck around talking to superannuation funds, or the Australian Council of Trade Unions or the Confederation of Australian Industry, or the airline pilots, or anybody else and at the same time not scare the wits out of the population, particularly those people who are moving towards retirement age, on the basis that there would be some retrospectivity to the tax treatment of superannuation. There is no way that these matters can be discussed before notice is given of them. So we gave notice of them. We said that we would sit down with the various interested groups, which we have done, on the basis that no retrospectivity would be involved.

The Leader of the Opposition, with crocodile tears, talked about the tax treatment of superannuation. In fact the gain to revenue this year from the so- called draconian changes is $10m. The cost to revenue this year is $2,400m. Overall, these changes will probably rise to half a billion dollars within a few years from now. Those figures demonstrate the generosity of the changes which have been made and, of course, they have been changes which have no element of retrospectivity about them. We have not said that there will be any change to anyone's entitlement until 30 June this year. Any person who accrued a superannuation entitlement to 30 June this year would maintain that entitlement. It would be taxed on the old basis of 5 per cent of its value at whatever the marginal rate of the taxpayer happens to be. We have said that from that day onwards, as an accrual build up this sum will be taxed at a different rate, on a prospective basis, and the Government finally determined to exempt in every respect employee contributions where an employee is deemed to have received a rebate, while the first $50,000 is to be taxed at the 15 per cent rate and the balance is to be taxed at the standard rate. In my view nothing can be fairer than that. No retrospectivity is involved. It is a prospective change. It builds up over time. The revenue yield is low and it is fair to everybody. As well as that we have exempted payments in respect of death. We have made changes which recognise problems with disability, the payment of sickness benefits with early retirements and also early retirement schemes. We have special schemes whereby people are virtually given a compensatory payment to change the age profile of a particular industry. There is nothing that any reasonable member of parliament or party could object to in respect of the changes which have been made in the superannuation area. I cannot understand how the Leader of the Opposition wants to be taken seriously, either by the nation in general or by the Parliament, when he bad mouths these changes as if in some way they are an ill-conceived, ill-thought through, grab for money which in some way is unprincipled.

I mention another point in respect of the pension assets test. Again the Government has made it clear-we have given notice of the change-what has happened in this area. There has been enormous, as I said earlier, haemorrhaging of the social welfare funds which, in many cases, are not going to those in need . There is an enormous circumvention of the income test. The Government is doing everything within its power to see that the pension test is such that we are not worrying those who are elderly and that we are explaining the changes. Indeed there will be about a year from its date of introduction into Parliament before it is taken up. In the course of that year we will be talking to interested groups about the test.

We took the opportunity to mention in the Parliament, in the Budget Speech, what the exemptions are again to demonstrate that in respect of that test there are very generous exemptions. We are exempting the pensioner's home, regardless of value, the car which is for personal use by both pensioners-in the case of married pensioners if that happens to be the case-personal effects, including furniture, caravan, boat, jewellery, art, antiques or any other item which somebody holds dear to him. Again in respect of non-exempt assets, the proposed scheme is a generous test. We reject absolutely the opportunist, populist nonsense of the Leader of the Opposition, who wants to be taken seriously but who will never be taken seriously while he trafficks in propositions of this kind. We on the Government side reject absolutely that our proposals are not equitable, well thought through and indeed imposed in the best interests of the nation.

Mr DEPUTY SPEAKER (Hon. Les Johnson) -Order! The honourable member's time has expired.