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Tuesday, 29 May 1984
Page: 2021

Senator MESSNER(4.06) —I move:

That in the opinion of the Senate the following is a matter of urgency:

The Government's failure to develop a coherent social security policy and the punitive effect of the proposal to include the pensioner's home in an assets test.

Since the election of this Government there has been no clear statement as to the direction in which this Government is tending to go in the development of an alternative policy on social security matters. In the statement of May of last year we had reference to the introduction of two measures-the introduction of tax on lump sum superannuation and the introduction of an income test for the pensioners over 70 years of age. Later in August, we had the announcement of the introduction of an assets test on pensions. It must be pointed out that it involved the whole range of pensioners and beneficiaries, including supporting mothers, widows, invalids, handicapped persons and persons in sheltered workshops in receipt of allowances. All those people would have been subject to the assets test which the Government proposed at that time.

Since then we have had a series of public relations disasters. Quite apart from that, we have had an ill-thought-out attempt to justify these actions in terms of developing some kind of coherent policy. Never, though, has the Government succeeded in making clear what its objectives are. Let me take one example, first and foremost, to demonstrate the importance of that point. In introducing its assets test proposal in the Budget last August, the Government stated that it was the first step towards the introduction of a national superannuation scheme. The first question that has to be asked is: What is the main feature of a national superannuation scheme? Surely the answer to that is that it means and , without any doubt, connotes a system whereby people have universality of benefits from a national superannuation scheme. Yet, with the introduction of the assets test, there is positive discrimination in favour of a particular group of pensioners and the exclusion from the scheme of another group. That, clearly, was a statement which underlined the Government's so-called objective in introducing an assets test. Never, since that time, has the Government sought to justify its actions in any terms other than that it was seeking, in the long term, to introduce a national superannuation scheme. From time to time, as the Government flittered from debate to debate on this matter, we have had discussion about double dipping and the kinds of moral frauds, perhaps we should call them, of those who take advantage of the present system.

That is one thing that the Liberal Party, in opposition, has been seeking to make clear in recent times. We have put up positive suggestions about how those things could be addressed. But the Government has failed to acknowledge those matters, until just recently when we saw in the report of the Gruen Assets Test Review Panel, which has been leaked to the newspapers, clear indications that the double dipping problem is the most significant aspect of the difficulties in which the Government finds itself. Indeed, the point is made in the report that universality of fringe benefits would go a long way to reverse the usage of double dipping as a means of obtaining pensions and thereby distorting the system.

If the Government were fair dinkum about the kind of system it wants to introduce, if it were fair dinkum about addressing the kind of superannuation scheme that it wants in the future, surely it would address those particular aspects of the problem rather than rumble around as it has done now for nearly a year-or more in the case of the tax on lump sum superannuation payments. It should make some clear statement of its intention regarding the introduction of some kind of integrated national superannuation scheme. Lord knows, it has had plenty of opportunities to do this; but instead it has left the people of Australia in total ignorance. This has led to more and more confusion, piling more and more disconcertment on the people of Australia, as the Government brings in more and more statements as the months go by.

Of course, all of this has been heavily overlaid by a direct attack by the Minister for Veterans' Affairs (Senator Gietzelt) on certain members of the pensioner community through the publication of a list of 120 so-called pension cheats. In the Senate today, in answer to a Dorothy Dix question, he sought lamely to justify where he obtained this information. But the point is that that has caused enormous concern in the community because it demonstrates that this Government is about attacking particular sectional groups in the community rather than addressing the real problems. Of course, that reinforces further our point that there has been no attempt by this Government to develop any kind of coherent policy.

Let us for a moment examine the question of occupational superannuation. We are now awaiting the introduction of legislation imposing taxation on lump sum payments. The justification for this has been that it is inequitable that some people obtain superannuation in the form of a lump sum payment rather than a pension, and that the pension is taxed and the lump sum payment is not taxed as heavily. But where is the logic of that statement? Is it not true that any income generated from the investment of a lump sum is taxable? Is it not taxable in exactly the same way as the pension that is received in the hands of a superannuitant? Is not the same treatment therefore applicable? In fact, is not the proposal that is being introduced by this Government to impose a tax of up to 30 per cent on lump sum payments imposing a capital gains tax on a lump sum of capital received by people at the end of their working lives? Yet in this country we do not have a capital gains tax except when we apply it to the elderly, except when we apply it under this new proposal to the lump sum payments received by those who have just retired. It is totally inconsistent, totally incoherent and obviously does not form part of this scheme which the Government has been trying to sell us as some kind of national superannuation scheme in the last 12 months. But the Senate need not only rely on my words alone on this. I will quote from evidence given under oath by Mr Darryl Dixon of the Social Welfare Policy Secretariat on 26 March. He said:

That is why I think that options that attempt to change the relative emphasis on occupational superannuation are doomed to failure. I think that if you were to decide that we are not to rely on occupational superannuation you would have to work out where else that $20 billion of funds with an additional $1.5 billion per year in savings, or whatever it is, would come from. I think that growth is going to be the key to all of this.

We also have claims from the Government that there is some kind of rip-off from people in occupational superannuation schemes of about $2,500m in tax benefits for contributions to those schemes. The first thing that has to be acknowledged is that that amount of money is a vast overstatement of the amount which is the net cost to the community of encouraging people to join occupational superannuation schemes. The kind of evidence that was put forward in the Budget documents last year supported that figure in some detail but it failed to take into account the tax that is generated from the revenue that comes as a result of the investment of lump sums and other moneys received as a result of people retiring who were members of occupational superannuation schemes.

It is estimated, and this was given in evidence to the Senate Standing Committee on Social Welfare, that that amount of money could be worth another $1 ,000m to the Treasury. If we take into account the saving on revenue also of the use of the 30:20 rule in superannuation funds; if we take into account the fact that many people who receive superannuation from occupational superannuation schemes do not in fact use fringe benefits and therefore the community saves as a result; if we take into account the fact that if there were no occupational superannuation many people would draw on the national social security system who do not otherwise do so, that amount of money, estimated last year at $2,500m and claimed by the Government to be absolute rote, falls to well below $1 billion in my estimation. If that is so, and the Government seeks to use that as a basis for justifying the increase of benefits to the most needy, it is gambling on the wrong horse because the money that it will raise from that source will be so little, as Mr Dixon points out, that any such effort will be doomed to failure. As a result, one has to wonder what this Government is about in that area.

The other matter which we mentioned in passing was, of course, the income test which was introduced for pensioners over 70 years of age. That was followed three months later by a contradictory move to apply an assets test to that group in addition to the measures already taken just three months previously. We then saw the changes in October to the assets test proposals whereby, under pressure from the right wing of the Australian Labor Party in New South Wales, the Prime Minister (Mr Hawke) agreed to the introduction of a leisure package to exempt boats, caravans and holiday houses from the effects of the assets test. We have now seen the Gruen proposal which introduces a threshold amount of some $200,000 to cover not just those items I have just mentioned but also the home of the pensioner.

As the Minister for Social Security, Senator Grimes, in answer to a question here today acknowledged, it is a bipartisan policy in this country to encourage people into home ownership. Yet the Government's policy will discourage people from setting aside money so that they can have a roof over their heads in their old age. The policy which this Government is proposing, if it adopts the Gruen committee recommendations, is to include the value of the house in the assets test proposal. Of course, that will lead to the dilution of a pensioner's ability to look after himself or herself. We know about the effects of that particular proposal in various States and its dramatic impact in States like New South Wales where land values are relatively high. I notice in the Gruen report that there are references to the fact that only 2.2 per cent of people in New South Wales have homes worth more than $150,000; I think that is the figure. In that case it ignores the fact that many old people, particularly in the Sydney area, tend to congregate in particular parts of the city. If they were forced, by virtue of the application of this new scheme, to move out to less pricey areas of Sydney, their whole system of relationships with their families and their support mechanisms within the local communities would be destroyed.

One aspect of this matter worries me very much. Single widows, or widowers, for that matter, who own a house will be caught by such a proposal since they will be entitled to an exemption of only $150,000, whereas a married couple-there being ostensibly some savings with two people living together-will have applied to them an exemption of $200,000. When we consider the price of housing in places such as Sydney and other parts of Australia, that proposal obviously will impose greater disadvantage on widows and single people than on married couples. For that reason we feel justified in putting down our motion that this be considered as a matter of extreme urgency and ask the Government to declare its position.

The Opposition has had a clear and consistent approach to this matter right from day one. We have sought, first of all, to find the real truth behind the Government's motives. We have tried to expose the weaknesses of its proposals, I think to great effect. On 6 September last year we moved in this place a motion- successfully carried, with the help of the Australian Democrats-for reference to the Senate Standing Committee on Social Welfare of the whole question of retirement income. That hearing is proceeding very well and we look forward to the Committee's report in August. Indeed, one would judge that the Government's best option at the moment would be to examine that report and to use it as some kind of foundation for the development of a plan which so far it has been unable to put before the Australian people. The Opposition sees that as the best opportunity for a developed system to be got off the ground.

Talking about the Australian Democrats and their support of that proposal last September, they have taken a very inconsistent approach to this whole question. It has to be demonstrated that the Liberal Party in government did lift the assets test in 1976 as a result of recognition of the changes, inconsistencies and anomalies in the system than operating. We have maintained that position ever since. The Liberals have not changed their attitude on that question since 1976, and I resent greatly the implication by Senator Haines on radio in Adelaide today that in fact we in Opposition have taken a very inconsistent position on this matter. In fact, if we examine her position we see that she has jumped from stone to stone, from a postion of broad support for the Government back in May to a point of complete confusion about what she intends to do in this place. Finally, in the last day or two she has discovered to her great amazement that the real problem with double dipping in this area concerns entitlement to fringe benefits. So Senator Haines has adopted our position nine months after we put forward that particular proposition.

The matter before us is of the most profound importance. It is of real concern to this community that the Minister has not seen fit to accept the tabling of the Gruen report for discussion by the whole community, and it is a pity that in the course of Question Time today he refused leave to Senator Watson to table that document. I have a copy of the document, as does just about everybody in the media, from what I can see, but I hear that members of the Government have not yet seen it and are complaining about that fact. If that is so, I believe that we in Opposition would do a great service to the community by seeking leave now to table that document, and I will seek to do that in a moment.

I point out, finally, that the Gruen report includes some very interesting information other than the matters which have become public so far. For instance , the report refers to the burden of the aged over the next several years. Referring to matters in connection with pensions, democratic factors and so on, it states:

When all these matters are considered together the Panel does not believe that the aging of the population over the next 30-40 years will create any unsupportable 'burden' for the community.

Yet here in this place we have heard nothing but justification for the ill- considered actions over 12 months by this Minister, by this Government, and by Prime Minister Hawke in the other place, who has sought to mislead the Australian people about his real intentions, about all the measures he has been seeking to put down to destroy the security of the elderly in Australia, on the basis that we will have a tremendous burden on our hands as a result of an increasing number of aged people over the next few years. That has clearly been thrown aside by this document and that is the reason the Minister has refused leave for us to table it. I now seek leave to table the Gruen report.

The ACTING DEPUTY PRESIDENT (Senator Colston) —Is leave granted?

Senator Grimes —No.

The ACTING DEPUTY PRESIDENT —Leave is not granted.

Senator Walters —Mr Acting Deputy President, under standing order 364, I request that the document from which the honourable senator has been quoting be tabled.

Senator Grimes —Mr Acting Deputy President, I admire the attempt by Senator Walters to use this device to get that document tabled. I suggest that all it is is a device. In fact, Senator Messner quoted very selectively from odd pages of that document. The document will be made available later in the week. If we are going to use devices like that to get documents tabled, I suggest we should think about where it will end.

The ACTING DEPUTY PRESIDENT —Under the Standing Orders it is incumbent upon me to follow Senator Walters's request. I ask Senator Chaney whether he intends to move anything in this regard.