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Wednesday, 17 June 2009
Page: 6270


Mr NEUMANN (10:48 AM) —Last night I was talking about the Liberal and National parties’ neglect for pensioners during the 12 years of their reign. They did nothing about the single rate of pension. In fact, the member for Higgins, on 16 April 2002 said:

And we know that there are big demographic changes going on in Australia. The population is aging and we have got to think about how we are going to cope with that.

…            …            …

We have probably got a window during the course of this decade but we have to start planning a long-term basis.

They lost power on 24 November 2007, but nothing had been done with regard to the single rate of pension. In fact, last year the current Leader of the Opposition finally admitted that the pension was inadequate, and he wanted two million couple pensioners, disability pensioners and carers to miss out on a pension increase. His proposal actually covered only single pensions. He said that on 21 September 2008. Even the member for Warringah, the shadow spokesperson for this area, has been equivocal about this issue on a number of occasions. Earlier this year, on 11 March, he said that increasing pensions would be a generous measure but that the ability of the government to cover this sort of thing was ‘under enormous question’. That followed what he had said earlier, on 24 February 2009, about the fact that economic circumstances were very different from what they had been 12 months before. He said he wanted to see a fair go for pensioners but:

… you can only give pensioners a fair go if the overall economic condition of the country is sound …

So we have had equivocation, ambiguity, procrastination and idleness from the coalition in relation to ensuring a secure and sustainable pension system in this country. Now, we are pleased that finally, on the road to Damascus, they have seen the light and they support what we are doing in this regard.

We did commission the Harmer review to look into the adequacy of our 100-year-old pension system. The review found that the full rate of single pension was simply inadequate and it resulted in gross poverty, neglect and hardship for single pensioners and challenges for couple pensioners. It recommended that the ratio of full-rate payments between single and couple pensioners be lifted from about 60 per cent to between 64 and 67 per cent. We are responding to what the Harmer review had to say. The government is providing in this legislation a significant increase of $32.49 for full-rate single aged, disability and carer pensioners. Couple pensioners are also being helped, with $10.14 for full-rate couples combined.

Now, why is that important? It is important for my electorate of Blair, in South-East Queensland. The statistics really are quite stark. I have in my electorate, according to the latest figures, 7,940 people on the aged partnered rate and 6,478 people on the non-partnered rate. In terms of the carer payment, we are doing a lot for carers as well. I have in my electorate 867 people on the partnered rate and 422 on the non-partnered rate. With the carer allowance, the figures are 3,075 people on the partnered rate and 1,302 people on the non-partnered carer allowance. That is 23,490 people in my constituency, which has, according to the latest figures, about 93,500 voters and about 150,000 men, women and children. So you can see what a difference this change will make for the economic security and the lifestyles and futures of so many people in my electorate in Queensland.

But it is Labor governments that have made a big difference. The Whitlam government, when Bill Hayden was social security minister, increased the percentage of the pension vis-a-vis what we now call MTAWE. The Hawke-Keating government did the same when they got in. And it has been left to the Rudd Labor government to do the same. So it is Labor governments that make significant pension reform and lift the standards, lift the economic circumstances of pensioners. To ensure the pension remains at adequate levels the Rudd Labor government is legislating a new MTAWE benchmark of 27.7 per cent for singles. That is up from 25 per cent. That will make a significant difference to people in my constituency.

We know that most Australians are going to have to rely on a pension—we know that. We know our parents and grandparents and those before them have had to rely on pensions. It is a mark of our compassion, our decency and our humanity as a society that we have an adequate pension system—and we should have one. A strong safety net is needed simply because it is fair and equitable. Despite the global recession we need to ensure that our senior citizens, those with disabilities, those people who are carers, have the kind of financial support that will get them through the difficult times.

We know that the demographic changes in this country will be enormous, and we know that the cost of pensions will double as a percentage of GDP by 2050. But that does not mean to say that we cannot tackle the challenges in relation to this. To ensure we have a strong safety net it is crucial for what we hope to be as a country in the decades ahead. I support lifting—gradually, of course—the age pension qualifying age from 65 to 67 from 2017 and an increase in the income test from 40c to 50c with respect to the tapering. These reforms reflect the Harmer report’s findings. We are responding to the independent advice. There are other changes that are being made as well.

But I am pleased so much for those pensioners who have come to see me, who see me at my many mobile offices around my electorate—places like Brassall shopping centre and Riverlink, Yamanto Village and Winstone Glades shopping centres, and at the many country shows I go to. I will be going to the Kalbar show this weekend, as well as Ipswich home show. I can guarantee there will be pensioners who will come and talk to me in relation to challenges they face each and every day.

I am very pleased also that we are simplifying and increasing flexibility with respect to the new supplement. The four existing add-ons to the pension—the GST supplement, the pharmaceutical allowance, the telephone allowance and the utilities allowance—are being combined in a single pension supplement. That supplement will be paid fortnightly. I think that is a very important factor, because pensioners will get the money when they need it, every fortnight, rather than monthly and quarterly. Singles will receive an extra $2.49 per week in the supplement; couples combined, an extra $10.14 per week. That equates to the utilities allowance for couples with the single seniors concession allowance for self-funded retirees. We think that is important. We think it is also important that we roll this increase in the pension out. So this pension reform will operate from 20 September 2009.

On top of that there is the regular indexation. We have new indexation arrangements introduced that more appropriately and better reflect the cost of living increases for pensioners. As part of the government’s reform packages a new pensioner and beneficiary living cost index will be calculated by the Australian Bureau of Statistics. We think it is important to respond to the real cost of living pressures that pensioners have.

But we are not forgetting, and we are not neglecting, our self-funded retirees, who had the commitment, the determination and the wisdom to put aside money to ensure their financial security in the future. They will benefit from these reforms as well. A new seniors supplement for holders of a Commonwealth seniors healthcare card will be introduced from 20 September 2009. The seniors supplement will replace the senators concession allowance and telephone allowance at the higher internet rate for eligible recipients. That will continue to be paid in a quarterly payment. The seniors supplement for a single person will be 66.33 per cent of the seniors supplement for a couple combined. That is important, because that is a good add-on for them. So we are making changes that we feel are important.

I mentioned the taper rate earlier, because I think that is important as well. From 20 September 2009 the pension income test taper rate will increase from 40c to 50c for each dollar of income over the income-test-free area. I think that is important as well in terms of the reforms that we are undertaking.

The work bonus is also an important reform that we are undertaking. To improve incentives for paid employment—we need to value our senior citizens and those who can make a financial contribution to our economic prosperity and development in the future—the government is introducing a work bonus. Employment income will be treated concessionally as part of the changes to the income test. Fifty per cent of the first $500 of fortnightly employment income will not be assessed as part of the income test. That means that those people who are receiving the work bonus will receive a maximum benefit of up to $125 per fortnight.

Earlier, I mentioned the age pension age increase. I know that it is a challenge for those who work in manual labour. But we have got to accept that our longevity is very different from 1909. People live longer and that is great. They want to live active, healthy lives and we need to acknowledge the fact that if we want a sustainable system in the future we need to face these challenges. It has been faced overseas in Europe and other places, where the pension age is increasing. So all we are doing here is meeting that challenge to secure a sustainable pension system.

There is going to be an increase in the age pension age from 65 to 67 at a rate of six months every two years, beginning in 2017 and reaching 67 by 2023. The first individuals affected will be 57 on 1 July 2009. They will have to wait an extra six months to qualify for the age pension. People aged 52½ on 1 July 2009 will be the first to have an age pension age of 67 years.

These are important changes. My electorate of Blair has many challenges—challenges of growth with young people coming to the area but also older people who have worked in industries such as coalmines, railway workshops, woollen mills and other areas of manufacturing. There are also people who have worked on farms and people who have given their lives to small businesses. They face big challenges. We ought to give them what they deserve. We need to do it. It is important to sustain our pension system in the future if we are to be a fair and just society, a society that believes not just in prosperity but in equity. We need to do this and I commend the bill to the House.