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Friday, 1 June 1984
Page: 2361

Senator CHANEY (Leader of the Opposition)(12.06) —This debate is on an issue that is of great public interest. It is an issue which, in a sense, was an issue which we did not expect to face in the life of the Hawke Government. It is interesting to go back to Mr Hawke's policy speech on 16 February 1983, which is not long ago and find that Mr Hawke, when talking about the sorts of difficulties the Minister for Social Security (Mr Grimes) says lie behind the test, and the central difficulty of restoring growth to the economy, said:

Recovery can only be achieved and sustained by a change to national economic policies which lift and sustain demand. There can be no lift in profits or a lift in growth unless there is a lift in demand.

He went on to say:

And that cannot be done by taking money out of the weekly pay packet or the pensioner's cheque.

So the furore of the last year about the prospect of pension entitlements being changed by Labor, with some people losing entitlements, is a furore we were entitled not to expect given the words of Mr Hawke. But, of course, most of the words Mr Hawke uttered in the 1983 policy speech have been recanted by him, not the least those.

The Australian Democrats' contributor to this debate spent some time lambasting the Liberals. I want to make some brief response to her comments. I do not have our 1975 policy in front of me, but my recollection is that that policy said that we would do away with the assets test and move to an incomes test. That is a policy which in fact we carried out very early in the life of the Fraser Government, in 1976. It is a policy which, as I recall, was written by none other than Senator Don Chipp; and Senator Chipp was, in that pre-election period , the spokesman for the Opposition parties on social security matters. Indeed, I am afraid the antecedents of that policy do not lie in some secret discussion in the Liberal Party or National Party rooms; the antecedents of that 1976 change can be found in the report by Professor Henderson on poverty.

Professor Henderson pointed out that there were anomalies and difficulties in the assets test. He pointed out that the assets test had deficiencies and recommended an income only test. So, one of the antecedents of the policy that was adopted by the Fraser Government in abolishing the assets test was in fact that authority, which I am sure is regarded as a very good one by the present Government. So all of the points that were raised by the Democrats' spokesman, Senator Haines, are really points I would answer by saying that we inherited a social security system that had deficiencies; we made changes to it that we hoped and believed would improve it, substantial changes such as indexation of pensions, for example, quite apart from the removal of the assets test; and in our period in office we gradually and continually effected improvements in the system of social security.

No one would deny that the enormous income maintenance system administered by the Department of Social Security has defects. It is quite clear that the Minister set out to try to remedy some of those defects by the re-imposition of an assets test. It was the Minister's intention to transfer resources from the better off to the less well off. He set off to do that by this mechanism. What an extraordinary, farcical situation we have reached when the Minister, in his statement here today, told us that the effect of the imposition of the assets test in the current period will be a $30m deficit. In other words, the test is not going to transfer, in the short term in any event, any assets which can be used for the benefit of the less well off in the community. In fact, it will cost the taxpayer more. Quite apart from the burdens which are being placed on pensioners, both in terms of the intrusion into their affairs and the loss of the income of some, the fact is that the Australian taxpayer, in the immediate future, will be worse off because of what the Government is proposing.

I know this subject reasonably well. I am touched by the fact that the Government consistently quotes me as an authority on the subject. I have been quoted often and with approval both in the House of Representatives and in the Senate. That is one reason why I am very pleased to take part in this debate. I note the respect that the Government seems to have for my views. I welcome the fact that it pays me the respect that it does. However, I think it is time that I pointed out to the Government that, when I was concerned about the very real difficulty of ensuring that there are sufficient resources to help the needy in this community, when I set out to try to ensure that the system delivered, according to that specification, as well as possible, I examined many alternatives. One of the alternatives that I examined was the reimposition of the assets test. I once said to Senator Dame Margaret Guilfoyle that one of the distressing things about holding that Ministry was that every track I went down I found footprints, and the footprints had high heels. I suppose every Minister casts about and looks for ways in which to find an improvement in the system which will enable him or her to help the needy in Australia better. I examined the reimposition of the assets test. I knew that some savings could be achieved by reimposing an assets test. But the advice I got and the advice that I accepted was that the disadvantages outweighed the advantages. I never came to the view that the reimposition of the assets test would, by itself, as something which could simply be undertaken in the way this Government has undertaken it, be something that I would put to the Government.

To the extent that the Australian Labor Party adopts my views as being authoritative, and it does seem to rely on them continuously in debate, let me say that my considered view was that that was not a proposition that I would put to the Government. I arrived at that view because of the great weight of advice which I got to that effect. It was not a decision taken in the party room; it was a decision taken in my mind because I was convinced that there were not the advantages that I had hoped when I set out to look at it that might accrue to the system. That is the fact of the matter. It is no good running me as an authority for what the Government is doing. I had the opportunity to bring this matter forward and believed it should not be done.

The position is that the savings that were held out, even by the original proposition, would doubtfully have been commensurate with the sort of cost, inconvenience and penalties which the Government seemed prepared to inflict upon the aged in Australia. We have now reached the stage where the savings are derisory. We seem to have a situation in which the Government is doing one of two things. It is saving its face because Senator Grimes stood up and said in a confident way what one does in the first few months of government: 'Senator Chaney would have liked to succeed in what he set out to do. If he had the Fraser Government would still be in office'. That is what Senator Grimes said. I am not quoting him exactly, but that is the drift of his words. Senator Grimes has backed off a great deal. He is saving his face by bringing in this ridiculous proposition that he has now presented to the Parliament and he has really achieved the situation where there will be no large savings on the present proposition. Instead we have a heavy bureaucratic intervention into the lives of Australia's aged for very marginal advantage and for complete disadvantage in this current period.

The second possibility is, of course, that this is just the foot in the door. If the Government really believes what Senator Grimes and the Prime Minister have been saying and, indeed, what the Business Council of Australia has been saying in the quote that we have so far, this is just the foot in the door. The Government is not going to be satisfied with an assets test that raises $45m. It will have to raise hundreds of millions of dollars. Therefore, we face the prospect of a totally different post-election assets test. That is something which the Opposition will be raising over the days and weeks of this debate. The fact is that the Government made a decision without having thought it through and imposed great penalties and great distress on many people.

The Government has tried to gloss over a good deal of this matter. At page 4 of the statement the Minister said:

But it became clear . . . that there was continuing uncertainty about whether the Government had found the fairest and most equitable way to implement an assets test. We became concerned that many ordinary pensioners had been caused unnecessary worry by those who, for shortsighted political purposes, encouraged groundless fears about our intentions.

That statement is cant. It is absolute cant because the fact is that the Government has admitted that it got the assets test wrong. Much to the surprise of the Minister for Social Security, Mr Hawke got up at the National Press Club in February this year and said:

. . . it is clear that there is a considerable degree of misunderstanding . . . and also, let me say, that there is some justifiable concern within what we have suggested, there are some intrinsic anomalies.

So the Prime Minister was admitting that what the Government put forward in August in the Budget had anomalies. On the Mike Walsh Show the Prime Minister said:

. . . there was confusion about the extent of who might be adversely affected and there were some anomalies. So I just decided then that what needed to be done is that we ought to get a . . . committee in the community to look at what we were talking about--

I might say that this quote from the Mike Walsh Show comes from the Prime Minister's musings, if I may use his own words, when he said:

. . . I was coming back from this recent trip overseas, I was sitting on the plane there by myself and just thinking--

Can we not imagine the silver-haired saviour sitting on the plane just thinking: 'Oh dear, there are some intrinsic anomalies. I will have to send this off to a committee to rescue me'. The thought is so ludicrous: Mr Hawke making the great decision as he flew back on a plane from the United States of America. There is no way that this Government can say that the pensioners of Australia have been caused unnecessary worries by the Opposition. This Government has caused the pensioners of Australia worry by bringing forward a test which it now admits was full of anomalies and which has had to be absolutely changed in quite fundamental ways. It is a joke and a farce. The fact is that this Government is now hung by the fact that it has caused this difficulty to the community. Both Mr Hawke and Mr Wran have made it quite clear what they think. Back in November, within a few months of being introduced, Mr Wran said:

. . . the new test would discriminate against NSW pensioners because of the higher property values in the State.

Mr Wran is quoted as saying:

There are too many inequalities and anomalies in the assets test . . . I think they've got to start all over again, frankly.

That is what Mr Wran said. The Government messed this up. It has caused some political pain. It has now come before us with what I call the pre-election assets test. It is designed to minimise the short term impact of the assets test . The NSW right wing has had a stance that it has advocated adopted because it is so concerned at the electoral impact.

I repeat that the Government has its foot in the door with its assets test. Honourable senators should look at the other issues that the Government has postponed until after the election. There is Senator Button's little favourite of the capital gains tax. We will not hear about that until after the election. There is Senator Evans's little favourite of the human rights Bill. We will not hear about that until after the election. There is Mr Holding's little favourite of Aboriginal land rights. We will not hear about a national Aboriginal land rights Bill until after the election. There is no way of knowing what the Government's real intentions in any of these matters are because its members are not prepared to expose them; they are a government of lies.

This Government went before the Australian people as an opposition and made a series of quite specific policy promises which have now been dishonoured. I do not have time to go through the list. It is almost endless. The fact is that the Government said it would not tax lump sum superannuation payments, it would allow the continuation of the interest rate deduction and it would allow the continuation of the health insurance rebate. All of those promises were dishonoured within a matter of days. It promised that virtually every Australian taxpayer would get a tax cut last year instead of the 22 per cent tax increase which the Government administered. We find the same Government, when in opposition, promising cheaper health care for nine out of ten Australians when two out of ten Australians were already getting free health care. How pathetic! The Government does not even care if its lies are obvious. The lie about health care was a lie that was obvious on the face of it. Two out of 10 Australians received free health care, and the then Opposition, now the Hawke Government, said that it would give nine out of 10 Australians cheaper health care. There could be no more obvious demonstration of the Government's lack of regard for the truth of what it says to the Australian people.

I suppose the most pathetic aspect of the statement before us is the fact that it has been described as a test of the Government's courage. The Government has moved away from a test that was going to save several hundred million dollars-a test that lit the flame in the breast of the Business Council of Australia, which said: 'At last we have a government of courage, a government that will tackle this intractable, endless problem'. What do we have today? The Government 's proposals will result in it being $30m worse off. It was said that this was a test of the Government's courage. Honourable senators should look at the government benches. They are made up of people who are full of fight and full of the spirit that at last they have solved this intractable problem. I really feel sorry for Senator Grimes-the laid back senator who looks as though he is a bottle of valium. Senator Grimes shows his courage by bringing in an assets test that will save pensioners from receiving an extra $30m, because an extra $30m will have to be found from the taxpayers. The test proposed by the Government will cost money. I hope that the good senator can maintain his laid back image.

I make a small tribute: I think this Government understands cars better than it understands social welfare. The Government has brought down two major statements in the last week. I have to say that the car industry statement shows some kind of courage. In that statement the Government faces up to the fact that tens of thousands of Australians will be out of work. Senator Button said with courage, 'That's it, kids. In the interests of economic growth, tens of thousands of Australians will be out of work.' Quite frankly, I think he has faced up to the problems with a sense of realism that is totally absent from Senator Grimes's approach. Senator Grimes has failed his test. If he were right in saying that the Fraser Government would have survived had it tackled this problem, I can only say he has put the mockers on the Government of which he is part.

There is much in the paper about which I would like to talk. I think that the Labor Party abuses language, a subject on which I hope people such as Senator Withers will speak in the near future. I believe that the abuse of language in politics is a serious problem. The love of the Labor Party for branding people with expressions such as 'tall poppies' and 'modified tall poppies' is a splendid example of how Australia should be brought together. What a splendid idea! Let us bring Australia together by branding people. The Labor Party would say: 'I bet that fellow sitting in the gallery is a modified tall poppy. We ought to have a bloody good go at him, ladies and gentlemen, because he is much better off than some of us.' That is the sort of thinking in the Labor Party. I see that Senator Scott is in the chamber. The Labor Party would say: 'He has a farm. We do not know whether he is a modified tall poppy or a real tall poppy, but by gosh we will lop him. He had better not have much land on the curtilage of his house, for if he does he will lose his pension because he is one of those modified tall poppies.' I regard with contempt much of the language used by this Government. Instead of bringing Australia together, it talks in the politics of envy, malice and acrimony. I think Government supporters ought to go home and examine their consciences.

Another marvellous thing about this statement-I am so glad to see Senator Walsh in the chamber-is that the Government cites as an authority the Business Council of Australia. The Senate should remember that only last night I chose to cite the same authority. I happen to have some regard for the Business Council of Australia. I think many fine Australians who have achieved a great deal for themselves, for Australia and for their corporations are represented on that Council. Its members have shown themselves very ready to give their time and some resources to broader national questions. The Government chose to embrace that Council at the time of the National Economic Summit Conference and the Economic Planning Advisory Council. It uses that body as an authority when it suits it. Last night when I cited a view expressed by the Business Council of Australia that was contrary to the view of this Government, and when that Council said that Senator Walsh was being destructive of this country in what he was doing, he used the word 'neanderthal'. That is another good Labor word used about someone who dares to disagree with the Government's views, someone who can be classified and put in a nice paddock and abused by the unthinking.

I just hope that the people of Australia notice this wonderful duplicity in the Government: You are a great Australian bringing Australia together when you are co-operating with the Government, but do not dare have an opinion that is different from that of the Government. If you are a journalist and you do so, you will get the sack. We know the bullyboy tactics that this Government is developing. It is a Government of bullyboys. The Government's attitude is that a person is a great chap if he co-operates with the Government but he is a neanderthal if he puts a view different from that of the Government. I just hope that the people of Australia are waking up to that reality, which underlies the smooth, pomaded image of this Government.

There are many things wrong with this statement, both in what it includes and what it omits; for example, it omits any indication of what the Government will be doing about the problem that it says I identified. I talked about the problem -the Minister quoted my words-of all these arrangements which evade the income test. The income test still applies. Those arrangements will still be relevant. The Government has done nothing in 14 months to attack those arrangements. Senator Grimes talked about it; he has done nothing. I ask: What is the position of rural people? This statement is nice; it is full of concessions to the people of Sydney and Melbourne. It has specifically been redrawn by people such as Senator Richardson and others who have been alive to the political difficulties that the Government faces. Poor rural Australia does not have enough smart people with telephones representing them in the Labor Party. The Government's proposal will penalise many rural people. I hope that the Government will look at the inconsistent way in which it has treated city and country interests. I ask also whether this wonderful revision of the assets test still includes the Keating exceptions. The Keating exceptions were so called because under the old test proposed by the Government a person could have furniture, antiques and items of that sort to any value. It protected the interests of those people who had an ability to accrue that sort of asset. The statement contains at page 15 these very unclear words:

To minimise intrusion into the personal affairs of pensioners, a net market value of $10,000 is set on normal household contents and personal effects . . .

So a net market value is set for household contents and personal effects. I hope that the Government will clarify the situation and tell us whether that will mean that antiques, paintings and all those other things that were part of the Keating exemption in the Government's original proposal will still be exempt from the assets test. I think we should know that.

Senator Richardson —Read the next paragraph.

Senator CHANEY —All right. It reads:

There is also a requirement that people declare the value of household contents and personal effects if that value exceeds $10,000.

I thank Senator Richardson. He made a very good interjection, for which I am grateful. I have had this statement for only a very brief time, but it would appear therefore that pensioners will have to be prepared to have inquiries and examinations made in relation to their household contents and personal effects.

Senator Elstob —Rubbish!

Senator CHANEY —If that is rubbish, the statement means nothing. No inquiry will be carried out, and therefore the statement means nothing. I think we will have to probe the Government on this issue. I believe that the Government will spend on the administration of this scheme $30m more than it will collect under this wonderful assets test. Apparently it will undertake no intrusions or inquiries. It must be intending to spend the money by sending public servants on holidays overseas. I do not believe that is likely. Quite clearly the Government is simply trying to paper over the cracks in its original proposal.

I note also that the Government proposes to reintroduce gift duty, but only in relation to pensioners. I would like to know whether it is the policy of the Labor Party to reintroduce gift duty generally or whether only pensioners will be subject to gift duty. That is a very fair question and I hope it is one the Government will clear up in the near future. I do not have time to go through all the issues that arise from this statement. However, I must say that I am puzzled about why it is that the assets test applies to the aged and not to some other people such as unemployment and sickness beneficiaries. I find it strange that the Government is denying social welfare payments to the aged but that other people may claim unemployment benefit and sickness benefit whatever assets they may have. There is no assets test on those people so the unemployed are to be in a significantly advantaged position vis-a-vis the aged. I find that very strange as a matter of social policy and I wonder what the Government really believes about that.

Senator Townley —Widows.

Senator CHANEY —I am afraid that widows are in the same unhappy situation. I really am sick of the accusations which have been made against the Opposition in this matter. The fact is that the Opposition, when in government, as a matter of conscious choice as far as the responsible Minister, namely me, was concerned, believed that this was not the way to go about achieving the objectives which I talked about and which I tried to promote. I did other things to try to promote them. I brought in a family income supplement, for example, for low income working families. That to me was a manifestation of needs based welfare. Our basic embracing of indexation of pensions was said by Professor Henderson to be the most fundamental thing that could be done to help those a the bottom of the heap. Many things were done by the Fraser Government consistent with the views that I expressed strongly and indeed sometimes with passion and heat. I stand by those views. But I say that the Government has erred very sadly in believing that views that I have expressed support what it has done.

I wish to close my remarks at this stage-I will have a chance to speak later because by arrangement I will seek leave to continue my remarks-by saying that I think the Government has described perfectly in this statement what it has achieved. I refer honourable senators to page 23 where the Minister says:

I regret the confusion, and anxiety, that many pensioners have experienced through the uncertaintly of recent months.

I have previously acknowledged our part in the responsibility for part of that uncertainty, in the shortcomings contained in last August's income and assets test.

I think that is an accurate summary of what the Government has achieved to date. The sad fact of the matter is that the Government has guaranteed the continuity of those defects into the future, to the detriment of Australia's aged. I seek leave to continue my remarks later.

Leave granted; debate adjourned.