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Wednesday, 17 June 2009
Page: 6295

Mr PERRETT (12:54 PM) —Before I commence, I congratulate the member for Corio, Richard Marles, on his elevation to the position of Parliamentary Secretary for Innovation and Industry and wish him well in that role.

On behalf of the 13,900 pensioners in my electorate and the 3.3 million pensioners in Australia, I am pleased to rise in support of the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009. For the benefit of the House, I will not name each of the pensioners in my electorate!

This bill implements the Rudd government’s commitment to delivering lasting reform to the pension and to supporting our beloved pensioners. It delivers an increase of $32.49 week for single pensioners and $10 a week for couples from 20 September this year.

As all 13,900 pensioners in Moreton could attest, over the tenure of the Howard government we saw the cost of living skyrocket. The cost of utilities, health care, groceries, housing and the other necessities of life more than doubled—and tripled, in some cases. Shamefully, the pension has simply not kept pace with this, leaving many pensioners wondering how to pay their bills. In fact, according to the latest Household, Income and Labour Dynamics in Australia survey, between 2001 and 2006 the rates of income poverty were consistently highest among the elderly, particularly single elderly households. It was painfully obvious to the Rudd government that pension reform was needed to guarantee an adequate and sustainable standard of living for our elderly and our disabled and their carers.

This side of the House cares about dignity. That is a Labor social contract that will never be broken. This is why the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, instigated the Harmer pension review—because of our relentless pursuit of dignity for all senior Australians. This comprehensive review recognised that pension rates, particularly for single pensioners, were insufficient.

The Harmer review recommended that the government concentrate our increase on those who are worse off—that is, people who are single and living alone, whether they are age pensioners, disability support pensioners or carers. The review estimated that we need to provide around $30 a week extra in order to make sure that single pensioners have sufficient income, and that is exactly what this bill before the House delivers.

I stress that this is not a vote-buying exercise. It is a budgeted and sustainable approach to reforming the pension for the long term. No right thinking Australian would try to argue that our pensioners are not worth this commitment. The Rudd Labor government does not believe in leaving pensioners guessing on budget night about whether they will get a one-off sweetener—that transitory sugar hit—because that way lies diabetes; the Rudd government is much more responsible. Instead, every single pensioner knows that every week they will receive an extra $32 from the government. Every pension couple knows that they will receive an extra $10 per week. This applies to age pensioners, disability pensioners, carers, wife pensioners and veterans’ income support recipients.

It is obvious that we are not making this reform at the best of times; some might say that it is the worst of times. In fact, these are very tough economic times. They are challenging times. They are, I think, referred to as character-building times.

Most governments would have trotted out the convenient line that this pension reform is too hard in the current economic environment. The coalition could not bring themselves to increase the pension in the best of boom times, when gold bars were raining down upon them. But we and they know that the pension is grossly inadequate and we and they know that a pension increase is needed now. Those opposite, including the opposition spokesperson, the member for Warringah, continue to speak against these necessary reforms. How does he live with himself? He says:

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

But we on this side of the House, we who believe in dignity, say that now more than ever pensioners need and deserve a fair go. Sometimes you have to have the guts to make the tough decisions in tough times, and I know that the pensioners and seniors groups in my electorate agree. Neil Couch, secretary of the Annerley-Moorooka Senior Citizens Association says:

The pension increases have been greatly received by all our members.

Norm Bullen, a well-respected senior resident in Tarragindi, says:

It’s a long overdue recognition of the value of Australia’s senior citizens.

And Joan McGrath, a Moorooka resident, a well-respected member of my local St Brendan’s parish and a long-term St Vincent de Paul volunteer, says:

Working closely with St Vincent de Paul, I see that it’s much needed as there are a lot of seniors struggling at the moment.

This bill also amends the qualifying age for the age pension. The age will increase by six months every two years from 2017, reaching 67 for males and females in 2023. I hope everybody currently 57 or younger is able to reorganise their lives around this tough decision that the government has had to make. However, the reality is that the pension age has not changed since the age pension was introduced 100 years ago. Back then, you were lucky to make it to 65, but I am pleased to say that we are all living and working a lot longer these days. Many other countries, including the United States and Germany, are already increasing their pension age to 67.

This change not only reflects the fact that we are living and working longer; it ensures that the age pension will be sustainable into the future. To this end, the bill will introduce a new indexation to better reflect cost-of-living increases for pensioners. The Australian Bureau of Statistics will measure increases in the living costs of pensioners. This will ensure that the value of the pension will be more responsive to pensioner out-of-pocket living costs.

This bill also tightens the pension income test. From 20 September 2009, the income test taper rate will increase from 40c to 50c for each dollar of income over the income test free areas. I welcome the transitional arrangements, which will ensure that existing pensioners do not face a reduction in payments because of the income test. A new work bonus will also be introduced to help age pensioners keep more of the money they earn from work. I do not wish to dishonour Brian Mannix and the Uncanny X-Men, but, unfortunately, it is not true that ‘everybody wants to work’. However, for those seniors who do, this is obviously good news. Income will be assessed fortnightly and half of employment income, up to a maximum of $500, will be disregarded in the income test. This is good policy to provide an incentive for those who are able to work to do so.

We all know that, for many people, with work comes additional dignity. Governments should be judged by how they treat the elderly and how they treat people with a disability and those noble people who sacrifice so much to care for them. I am proud to be part of a government that is truly listening and responding to the needs of pensioners. This bill delivers a simpler, fairer pension system that is long overdue. I thank the Treasurer and the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, for having the courage to rise above the current economic circumstances and argue at the cabinet table why we should do the right thing by Australian pensioners. I worked briefly in Ms Macklin’s office many years ago and it is reassuring to see that the compassion I saw then has not been in any way diminished by the trappings of ministerial office. I commend the bill to the House.