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Wednesday, 12 October 1983
Page: 1621

Mr RUDDOCK(11.15) —I welcome the opportunity of participating in this debate. I shall direct my remarks particularly to the Repatriation Legislation Amendment Bill. I will not avoid commenting, at least in part, on the observations of the honourable member who spoke before me, the honourable member for Grey (Mr O'Neil). Honourable members opposite, all too readily, are prepared to articulate the view that they are the only people with a conscience, the only people who care. The honourable member suggested that the Australian Labor Party was a caring party. If honourable members opposite look at some of the speeches I made when they were last in government they will realise how readily those sorts of remarks can be turned against them. When one sees, as a result of government policies, significant increases in levels of unemployment-we saw that in 1973, 1974 and 1975-and when one can sheet them home directly to the policies that were pursued at that time one appreciates how much these sorts of arguments can be turned against the Government of the day.

Of course, later, we saw very different circumstances as a result of what I would describe as much more international factors. There were significant increases in the levels of unemployment as a result of circumstances that were beyond the control of the former Government. The drought was significant. I know that honourable members opposite accept the injunction of their Leader that perhaps they had some impact on the breaking of the drought, but I do not accept that there has been any such divine intervention. I think the honourable member ought to be a little more prepared to examine the capacity of his own Government to grant the sorts of requests that he is making, to appreciate the limitations on governments-I refer not only to the previous Government but also to his own- and to acknowledge that high deficits have an impact and limit the capacity of all governments to give the sorts of benefits that they would like to see put in place.

We have before us the Repatriation Legislation Amendment Bill which is to give legislative effect to the Government's Budget decisions and to make amendments to the repatriation and defence service homes legislation. Those words were largely taken from the opening words of the Minister for Aboriginal Affairs (Mr Holding) when he introduced this legislation on behalf of the Minister for Veterans' Affairs (Senator Gietzelt). The Bill, however, does not implement all the Government's Budget decisions affecting veterans and social service recipients generally. In particular, it fails to give details of the Government' s proposed assets test which will affect the eligibility for pensions of veterans and war widows in particular.

The Bill, however, has a number of facets. Included amongst its main provisions are provisions for the Deputy Chairman of the Repatriation Commission to be appointed by the Governor-General; indexation of income levels for the provision of fringe benefits from November 1983 for persons who receive a service pension; the extension of eligibility for the guardian's allowance to a veteran who has the custody, care and control of a child or children when he is separated from his wife because of illness; extension of the eligibility for a service pension to the husband of a severely handicapped female veteran where he is required to provide constant care and attention for his wife; and the introduction of a remote area allowance for service pensioners living in remote areas at the same rates as those outlined in the Social Security Legislation Amendment Bill which we have been discussing. The Bill also includes an increase in the rates of attendant allowance; an increase in the rates of orphan's pension; an increase to pensions payable to amputees and those suffering a loss of vision, in line with the consumer price index rises; an extension of the authority for the Defence Service Homes Corporation to make available out of accumulated deposits an amount for insurance for a dwelling and allowing the Defence Service Homes Corporation to undertake insurance of improvements to dwellings and buildings and materials for such improvements.

I mentioned those matters because I acknowledge that they are important extensions of benefits. I hope that honourable members opposite, in accepting that accolade, also acknowledge that the previous Government significantly extended benefits that would affect veterans. I shall mention some of those because they provide an interesting catalogue as well. I think it is important to recognise that we all accept the obligation to provide adequately for those who have served Australia as veterans did in such a distinguished way to protect our future. Of course, the previous Government in its last Budget put in place a number of decisions. The amount of allowable income for the maximum pension was increased from $20 to $30 a week for single people and from $34.50 to $50 a week for married people from November 1982. Fringe benefits for eligibility income limits were raised to $54 a week for single people and to $90 a week for married couples. The pension was extended to veterans who had served in allied forces and to Australian, Commonwealth and allied merchant seamen. A proportion of disability pension, disregarded when assessing eligibility for service pension, was increased from 60 per cent to 100 per cent from November 1982. Increased pensions and benefits were announced in the 1982 Budget generally.

In the benefits area pensioner health benefits were extended to British Commonwealth veterans and dependants who received Australian service pensions. The issuance of personal treatment entitlement cards to all pensioners eligible for free medical and hospital treatment and to war widows was a new initiative. A new temporary incapacity allowance was introduced. Repatriation funeral benefits were increased to $500 and eligibility tests were eased. Australian mariners who were prisoners of war and veterans with service related amputations or loss of vision or an eye were eligible for free medical treatment for all conditions. Repatriation benefits were extended to all members of peacekeeping, observation and monitoring forces, and repatriation medical and hospital treatment for all disabilities was extended to all World War II veterans receiving at least 50 per cent disability pension and service pensions from November 1982. In the hospitals area, in the 1982-83 Budget improvements were announced for repatriation hospitals, including new operating theatres, wards, the employment of more nurses, the reopening of wards and new specialised equipment.

I mentioned those matters because I think they put in balance the nature of the sorts of changes that were implemented by this Government. I acknowledge that they are worthwhile advances, but equally the previous Government always looked at the range of benefits and, as Budget positions allowed it, ensured that those benefits were extended where possible. These were very positive amendments. Of course, the Opposition acknowledges that the amendments proposed by the Government in this legislation are worthy of support, and in that regard we offer support to this Bill.

There is, however, one matter which I want to raise in regard to which the Opposition has some reservations. The Minister, in his second reading speech, made this reference:

. . . savings will be generated by the removal of the exemption from income of payments by trade unions and friendly societies, but they cannot be estimated as it is not known how many service pensioners receive such payments. Removal of the exemption is justifiable on the ground of equity.

That was a Budget change about which very little was said, but I think it is important that honourable members be aware of the way in which this Budget will affect friendly societies. I understand that friendly societies have been operating in Australia for approximately 150 years and have been a means by which individual Australians could provide for their welfare needs through mutual aid. While an increase in the proportion of welfare needs has been made available by governments, friendly societies have modified their roles and activities so as to provide Australians with additional welfare needs, wants and priorities, particularly those members who have been involved in those mutual societies.

Naturally, society benefits and the services provided have been built upon the long-standing status which societies have enjoyed under Commonwealth taxation and social security legislation, particularly in relation to the veterans' area about which I am speaking in this debate. This status has existed for quite a number of years. Consequently, members have an understandable expectation as to the level of benefits to be derived from their participation in society activities. Thus any legislative change which would have a sudden effect on the capacity of societies to fulfil these long-standing expectations could reasonably be expected seriously to disrupt the circumstances of a number of members. Whilst the Government is not able to quantify it, I think it must be accepted that numbers of people will be affected.

The services to aged villages and nursing homes which rely on subsidies from friendly societies could be curtailed as a result of the overall financial situation of societies being adversely affected by legislative changes-those foreshadowed as well as those in this legislation. The friendly societies welfare movement in the Australian community extends to some 2,000 hostels, I am informed, and a number of holiday and nursing homes, not to mention a number of dental clinics. Changes to the current taxation, social security and veterans' provisions could go so far as to affect the viability of some friendly societies and, eventually, the viability of the activities in which those societies are involved. This would not only disrupt the arrangements and expectations of existing society members but also disadvantage friendly society employees, many of whom could face difficulty in finding alternative employment in the current recession. No doubt the Government's decision not to use friendly societies and other health funds as vehicles to administer Medicare will also have an effect upon the viability of some of those organisations.

I think it is important in that context to recognise the nature of these organisations, the work in which they have been involved and the extent to which this legislation may affect their viability. Of course, the Government, while it suggests that removal of this exemption is justified on the grounds of equity, is not able to give any indication of the way in which these changes as well as the changes that are envisaged in the area of taxation as a result of the introduction of Medicare, are likely to affect those organisations. Representatives of friendly societies have pointed out that the practical effect of the proposed removal from the social security legislation and the veterans' affairs legislation of the provisions which exempt friendly societies from payments of pension and benefit income tests is in the area of sickness benefits only. According to friendly society sources, this is a declining area of friendly society activity and the payments involved are small. But those representatives have made the following points: The sickness benefits are limited to a maximum of $95 per week under legislation, but in most cases payments would be less than $20 a week; total annual payments of sickness benefits by friendly societies are less than $1m; and the average age of contributors to friendly society sickness benefit funds is around the mid to late fifties, and many sickness benfit recipients are over 70. In addition friendly society representatives argue that the removal of the exemption from the social security and veterans' affairs legislation should not require existing members to become liable for income testing. On evidence provided it would appear that any change would have a negligible effect on the overall welfare spending, particularly if the number of benefits and contributors is declining.

I mention those matters because I think it is important that the position of the friendly societies be put. We do not oppose the removal in this instance but I think if it is found that these changes have a significant effect upon the viability of friendly societies it is important that honourable members be aware that this is a possible consequence of the changes that have been introduced in this repatriation legislation as well as the social security legislation, and coupled with other changes that are likely to affect these organisations. Mr Deputy Speaker, I mentioned that, while the Minister said this legislation gives effect to all the Government's Budget decisions, no particulars have been given of assets testing of veterans' benefits generally. This Bill purports to deal with the Government's Budget changes but it does not provide the detail of the proposed assets test which was outlined in the Budget. We know that in the mini- Budget in May the Government proposed certain changes affecting pensioners over 70 years of age and introduced a new income test for them. Of course, we have the movable feast involving superannuation benefits, changes which were also foreshadowed in May.

One would have thought, insofar as the Government is concerned to deal with double dipping which was one of its stated objectives, that it would have been unlikely in the light of those changes in May that further changes would have been announced in the Budget. Yet there was an announcement that there is to be an assets test. Read with the earlier changes, it does not constitute by any stretch of the imagination a comprehensive policy. Rather, honourable members would appreciate that it seems that two very different and substantially inconsistent policies are being pursued. In that context I think honourable members need to appreciate that the Budget assets test now seems to supersede the earlier income test for the over-70s announced in May. If the assets test was proposed in May, why did the Government propose to income test those over 70 ? The cost of doing so is very considerable. Numbers of pensioners over 70 years of age have expressed to me their concern about the detailed information they have to provide about their personal circumstances. That test will apply for about 12 months if the assets test changes are introduced and then new provisions will have to be put in place.

In the Budget debate in the Senate it has now been revealed that the cost of the May announcement for that one year's change in relation to people over 70 years of age will be of the order of $3m. As I have said, pensioners have been put to very considerable embarrassment, cost and inconvenience for a new system which will last for only about 12 months if the Government proceeds with this new assets test. I regard conduct of that sort as harsh and unconscionable, particularly when it is viewed against some of the comments of the Minister for Veterans' Affairs who, during the period May to August when the Budget was introduced, was at pains to make the point that the Government did not have in mind introducing an assets test for pension recipients. One wonders to what extent he was involved in the Budget decisions when one looks at his statements of June and July. I would like to quote to the House in the short time available his statements of 20 June and 6 July, because I think the comments I have been making are very much reinforced by the Minister's statements. The Minister for Veterans' Affairs on 20 June put out a news release which, in part, stated:

The Minister for Veterans' Affairs, Senator Gietzelt, today reminded the Australian community of its costly obligation to accept responsibility for the Repatriation of ex-servicemen and women.

However, Senator Gietzelt said there are thousands of people who have considerable assets yet are still applying for and receiving pensions through the Repatriation system.

He gave the following examples of such cases:

A person who has assets of over $600,000 yet manages to convert his declared income to only $16 per fortnight

Another whose business revenue totalled over $1 million for the year, yet after so-called expenses were taken into account showed a net profit of $159.

Yet another who retired with a lump sum of over $170,000 yet receives a full Service Pension plus fringe benefits.

He said that in a time of economic difficulty, we must look to sharing the burden. Those who could most afford to, should be looking to help others. Unfortunately that spirit was not being followed by many who wished to avoid their responsibilities.

Those comments need to be looked at in the light of the comments of the present Minister for Foreign Affairs (Mr Hayden) during the Lowe by-election. I note that the honourable member for Lowe (Mr Maher) is to speak later in this debate. The Minister had this to say:

The argument about millionares receiving pensions is a cruel and emotive device to cover up the Government's real intention . . . to justify ripping the pension off ordinary people with modest savings they have worked for all their lives.

Those comments apply very much to the observations of Senator Gietzelt who is using a mallet to deal with a number of very special circumstances which could be dealt with in a much more specific way. In the comments made by Senator Gietzelt in his statement of 6 July-I encourage honourable members to read it-he responded to suggestions that he was about to impose an assets test on pension recipients. He said:

That is not what I am talking about at all . . .

I am seeking further information about just how widespread are the abuses of the kind I have already discovered, and what we can do to modify the income test on pensions to prevent such abuse.

Some who have contacted my office have expressed a fear that their few accumulated assets might be subject to a test that would determine their eligibility for a pension.

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