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Wednesday, 3 October 1984
Page: 1118

Senator MESSNER(3.23) —The matter of public importance which I have brought forward today is as follows:

The Hawke Labor Government's revised assets test which continues its attack upon the retirement security of aged Australians.

We bring this matter before the Senate today in the absolute knowledge that the vast majority of Australians of all age groups strongly support the sentiments that are included therein. Recent opinion polls across the age spectrum continue to demonstrate that Australians oppose the assets test. They also feel that this Hawke Government is intent on destroying their retirement security by various means which I will develop later in my remarks. Suffice it to say at this point that in a recent Age poll it was shown that 62 per cent of people thought that the recent Budget, which has been so heavily extolled in this place and in the other place by members of the Government, did not do enough for pensioners. It is interesting to speculate on what the result of that poll would have been had the question asked been: 'Do you agree with the Government's attempts to harass pensioners through increased taxes on pensions announced in the Budget?' The last Budget, of course, put very significant imposts on pensioners. In fact we find that figures provided by the Parliamentary Library show that a single pensioner, with $20 a week other income, instead of paying $20 a year in tax as was the case last year, this year will pay $109. In the case of a pensioner on the full pension with $30 a week additional income that figure goes from $244 to $313 this financial year. This comes from a Government which has claimed it is doing more for pensioners in this Budget. However, the 62 per cent of people polled in the Age poll know the truth and know that that is totally false.

The new assets test arrangements which have been the subject of debate in this place for many months and, of course, have been the subject of debate in the public arena as well, are still not clear and are still generating considerable concern in the community. For instance, the recent recognition of the fact that occupiers of granny flats at the back of homes are now to find themselves caught in the provisions of the assets test whereas people who own their homes in other circumstances would not be so caught is of concern. This is another addition to the growing list of anomalies and injustices that have been caused by the assets test legislation which is now law.

This comes on top of the other very significant imposition of taxation on lump sum superannuation payments. We know how that has generated such terrific concern in the community, not only amongst pensioners and retired people but also amongst the trade union movement itself and industry. The number of people who oppose the assets test should include Senator Grimes, the Minister for Social Security. We have only to remember his lines in Labor Essays written before the election in 1983 when he said:

To be consistent, those who argue for a pensions assets test should also argue for the personal income tax to be supplemented by a substantial tax on personal assets-in other words, a wealth tax.

Two or three things can be said about that. Senator Grimes may believe that having introduced an assets test we should now have a wealth tax. If that is so, why does he not stand in this place and say so? Why does not the Government make the point before the election that it intends to introduce a wealth tax and a capital gains tax so that people can make a decision on that matter when they go to the polls? The second point that can be made is that he obviously had very little support in his own mind for the idea of an assets test. That was later borne out by his remarks at the famous National Economic Summit Conference when he said quite clearly to the assembled multitude-those from the trade union movement and industry-that if an assets test were brought in the effect on the general pensioner would be such as to produce very little extra revenue which could be distributed to the needy, that in fact in that way there would be very little extra money available to the community for the most needy in the community.

What then was Senator Grimes's reason for introducing this assets test? At one point along the way he said that it would be part of the introduction of a national superannuation scheme. How can that be so? How does that make sense when he starts with the proposition that in order to introduce a national superannuation scheme, which implies that there will be general availability of a universal pension for all, he must start by taking money away from pensioners who are presently in receipt of it? That just does not make sense. Obviously there needs to be a very clear statement by the Minister as to his objectives in this area.

The only obvious objective that can be divined from the actions of the Government in recent weeks and months is that it is concerned about the so- called issue of double dipping. That, of course, is the situation where people so arrange their affairs as to circumvent the present incomes test. The theory goes that an assets test would be able to catch those people and so ensure that the benefits went to the most needy. Indeed, that may have been the Minister's objective. But if that is so, why does the Government not examine that issue in depth? Why does it not examine the reason people arrange their affairs in the way they do? We in the Liberal and National parties would be quite confident that if it went to that trouble it would find that the main reason people so arrange their affairs is the eligibility requirements for the pensioner health benefit card. In fact, people as a result of receiving a pension become eligible for a pensioner health benefit card. Recent studies by the Department of Social Security indicate that fringe benefits add maybe up to $100 a week to the income of pensioners. Is that not a mighty strong and powerful incentive for people to arrange their affairs to circumvent the present income test? I once again draw that matter to the attention of the Government.

I urge the Government to examine in very considerable detail the fundamental issues that are involved here rather than trying to attack the issue at the top by seeking to cut off what it would term to be the 'tall poppies'. The question of just who are those tall poppies also is very important. The Minister for Veterans' Affairs, Senator Gietzelt, is very keen to call these people pension cheats. In fact, a list of the top 124 pension cheats was published in a newspaper some six or eight months ago. Those names were clearly drawn on the wrong information. But the Minister sought to use that information in such a way as to create scares in the community. People came to look upon those in the list as committing some kind of fraud on the community. However, in fact I put it to you, Madam Acting Deputy President, that even if these people were involved in the so-called double dipping operation, the reasons for their involvement need to be examined closely, and it is the very point about the national health benefit card that I have just mentioned which is at the core of that problem.

To hear members of the Government carry on at great length about a welfare system that should be needs based one would think that there is no needs based system presently in existence and that, of course, is absolutely wrong. We already know that the income test is applied very stringently against people receiving full pensions. We know that over the last 10 years or so the proportion of full pension received by people has declined from around 90 per cent to around 70 per cent. So, in fact, the income test has been successful in reducing people's reliance on the Government for a pension and in that way there is already in place a needs based system which is very effective. The second point is that there is a vast misunderstanding in the community about that fact.

Because the Government has sought to equate the idea of an assets test with a needs based system, the two have become synonymous and, indeed, one cannot talk in general terms about needs based welfare these days without talking about the assets test. That, of course, is absolute nonsense which was perpetuated even in an article written in today's Age newspaper by a commentator called Claude Forell who has picked up all the old hackneyed stories and bits and pieces about welfare. Without analysing any of the information he has come down with the proposition that in fact the assets test seems to be a good idea. He does not analyse any information. He said he seeks alternatives. But in fact, as far as I know, he did not seek information from the Opposition in respect of its position . He claims that we apparently have no alternative. That, of course, is absolute nonsense. Indeed, I think I have demonstrated those clear alternatives in the course of the remarks that I have been making.

But let us then look at the broader picture of the retirement income. I must say that there has been very little debate in this Senate chamber on the question of occupational superannuation. The Government seems to have run away with the idea that somehow there is a vast pot of money going down the drain to the very rich in the community by virtue of some 45 per cent of the work force being included in employer sponsored superannuation. That percentage, of course, is absolutely true and we on this side of the chamber would like to see that 45 per cent increased rapidly as it has, of course, in the last 12 years. In fact, since 1972 the proportion of the work force in occupational superannuation has almost doubled. We see employer sponsored schemes in which employees as well as employers contribute to future benefits as the best way for members of the work force to build up a future sum which they can live off quite reasonably in their retirement. This partnership or incentive, if one likes, offered through the tax system gives people the opportunity to save for their retirement. We believe that that is a very powerful and strong incentive for people to build up their own nest eggs during their working lives and we want to encourage it. The Government has introduced a tax on superannuation which is received in such circumstances. The Government says that people should not receive lump sum superannuation payments, that superannuation payments should be made by way of an annual or weekly pension. We, of course, object to that because we believe that people should have the option of choosing either form of superannuation.

The next point is that the Government-and this was repeated in the article in the Age this morning-says that there is a cost to the taxpayer of $2,500m because of the taxation incentive for people in superannuation funds. It is argued that this money would be better used for people who receive pensions, that is, the more needy members of the community. I suppose that is a fine argument except that it ignores the facts. In fact, if we take into account the amount of income tax that is received by the Treasury as a result of the investment of lump sum payments, that figure of $2.5 billion falls to something under $1,000m. Will the Government tell me how many needy people in the community it could help with that very small amount of money. So that argument is totally fallacious and without foundation. However, it keeps getting repeated in the newspaper articles and deserves to be knocked on the head.

Probably the most significant thing that the Government has done since it came to office in respect of those in retirement is the introduction of the Medicare arrangements for the aged. We now have situations where people who live in aged person's hostels and other age accommodation run by community based organisations are having to insure themselves privately outside of Medicare arrangements simply because there are no public hospital beds available for them . Of course, we are seeing the start of a decline in the availability of private hospital beds as well because private hospitals are being forced out of business as a result of the Medicare arrangements.

This Government has not realised that we will be facing a crisis or, if it has, it has failed to do anything about it. It is an absolute disgrace that the aged, and particularly the frail aged, are the ones who are being cast onto the streets by this Government. This is at the core of our concern on this side of the House when we raised this issue today.

I must reiterate that the challenge in dealing with the problems of the aged lies in dealing with the problems of the frail aged, those who are suffering from Alzheimer's disease and senility. It is that problem which this Government is failing to address and doing absolutely nothing about. I know that bits and pieces are being started by some departments in this area, but there is no comprehensive plan. If one wants to define the needy amongst the aged in the community, they are to be found in that category. The Government should be acting to make sure that it helps that group of people. Instead, it goes about destroying the security which people have currently developed under retirement income plans which are already available in the community.

The objective of the Government is to make as many Australians in retirement as possible totally dependent upon the Government. That is in total opposition to the position of the Liberal and National parties which seek to encourage independence so that people can build up nest eggs for their retirement and put money aside so that they can use it for the purposes which they deem to be important. I make another point which I think is terribly important. The Government, by making people dependent upon it, is putting those people in a most insecure position. The reason is that governments change and rules change. Pensioners have learnt that lesson to their cost since April 1983 when the Hawke Labor Government was elected and so many benefits have been withdrawn. It is for that reason that the kind of proposition which the Government is seeking to perpetrate on the retired people of Australia is leading to a greater sense of dependency, and a greater sense of insecurity rather than the reverse. There is no security in relying on government pensions as one's only source of income. The only security will come from a diversified field of investment so that people can draw upon many sources for their freedom of action to invest, work and save. That is the Australian way. Indeed, one would have to have some doubt about the credentials of the Prime Minister, Mr Hawke, when he says that he is looking after the most needy when he has introduced these various measures.

Finally, I make this point: At the meeting of the Economic Planning Advisory Council the poor were treated as the pariahs. They were treated by the Government, in the words of Mr Bruce McKenzie, the Chairman of the Australian Council of Social Services, as being irrelevant to the discussions and they were not treated as part of the economy. That is the proposition which this Government has regard for when it talks about the needy-they are not a part of this economy, and that is not the position of the Liberal and National parties.