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Wednesday, 11 April 1973
Page: 1324

Mr WENTWORTH (Mackellar) - I was somewhat surprised by the speech of the honourable member for Prospect (Dr Klugman), who has just resumed his seat. I would have thought that as a man trained in a university he would not be guilty of the egregious logical errors which he committed. I am speaking particularly about his remarks in relation to the costs of the measure. He said that the previous Government's proposals, which I introduced, involved costs which the present proposals do not. The present proposals involve costs for 2 simple reasons, which I would like to bring to the honourable member's attention. The first reason is that the existing legislation does not leave much of a loophole for people to come to Australia and plunder the Treasury by receiving pensions. This Bill, as I will show, does leave some such loopholes.

The second reason is that under our existing agreement with the United Kingdom, people who go to the United Kingdom - I >tm speaking not of those people who qualify under an agreement made under section 137 of the Act but of those people who have lived here for 10 years or more - are paid a pension in the United Kingdom, that being their permanent residence. That would not he so under this Bill. So there are quite considerable additional costs involved in this Bill which were not involved in the existing legislation. Perhaps the honourable member for Prospect is a little ignorant in these matters, but as a trained man he should not commit that kind of egregious error.

Our present system of pensions differs from those operating in most parts of the world. T except New Zealand where there is a good deal of parallelism with the Australian system. There are two or three reasons for that difference. The first reason is that the Australian pension comes on all at once. It is all or nothing. It is a certain sum. I am not speaking of the means test or anything like that but of the pension rate. One either is eligible for the pension or is not. In most overseas systems the pension rate comes on gradually and one accumulates a pension for every year of work, or every year of contribution. That is common to most European systems and to the United Kingdom system. It is an aspect in which the Australian system materially differs.

Our pensions are non-contributory. This is unusual overseas. Our system is not unique, but that aspect is unusual overseas. Therefore, overseas pension rights are almost personal property like an insurance policy or any other investment. They are different in kind, therefore, from rights in Australia which are not tied to personal and individual contributions. The third reason is that insofar as flat rate pensions are concerned, our rates are very high indeed in comparison with the rates of other countries. For example, using a conversion at the current rate of exchange, the United Kingdom standard rate of pension is equivalent to $13.60 a week as against our pension of $21.50 a week. The married rate in the United Kingdom is equal to $21,90 a week as against the Australian married rate of $37.50. The United Kingdom pensions are comparatively high. Of course, they are supplemented by contributory pensions but I am now talking of basic rates. The basic rates current in most European countries, apart from the pensions which are bought through contributions, make the Australian rates seem astronomically high for non-contributory pensions.

There is also the question of the means test. It is a vexed question which I will not go into at the moment. It is true that the previous Government did a very great deal. In fact, most migrants - not all, but most - were covered. In respect of the United Kingdom and New Zealand we were covered by reciprocal agreements. In respect of migrants from Italy, Malta, Greece and Turkey we were covered by agreements negotiated under the new legislation. We were about to conclude agreements with France, the Netherlands and many other countries which are set out in the list in the second reading speech of the Minister for

Social Security (Mr Hayden). We were proceeding well with negotiations and I am quite certain that it would not have been long before we concluded agreements.

Under the existing legislation people became eligible for pensions only after 20 years residence in Australia after the age of 16 years. This was meant to cover the normal working life and to bring some kind of congruence and equivalence with the general position in Europe or the United Kingdom. It is absolutely fair, of course, that a person who has contributed by taxation or in other ways to the Australian revenue throughout his working life, or by his working life has contributed to the Australian economy, whether by actually working himself, or in the case of a woman by helping to raise a family or in other domestic work - if they have actually been contributing throughout their 20 years of working life after the age of 16 years - it is fair and reasonable for them to take their pensions overseas. I am not quite certain that it is not a little over generous to do what is done in this Bill and I will come back to that in a moment. I think it is open to abuses.

I will contrast the present Bill with the half baked Bill which was brought into the House by the present Government when it was in Opposition. That Bill was deficient in 3 main aspects. Firstly, it applied only to Australian citizens and therefore ignored those people who had lived and worked in Australia for a long time but had not taken out naturalisation. Secondly, it did nothing to protect the pension rights coming from overseas of people who had left their home countries to settle in Australia. Thirdly, it opened the Australian Treasury to plunder on a massive scale because it would allow people to come here in very big numbers in order to qualify for a pension. These 3 defects were inherent in the Bill which was brought down by the present Prime Minister (Mr Whitlam). It was certainly a very amateurish and unsatisfactory effort.

To some extent this Bill has profited from what the previous Government did. It has corrected some of the errors which were inherent in the previous Government's legislation. It applies to all people in Australia, irrespective of whether they are citizens. That is an improvement. It does not in any way give us the power to negotiate with other countries in order to protect the pension rights accruing from overseas of people who have come to settle permanently in Australia. It does to some extent close the loopholes for plunder of the Australian Treasury which I had to point out in the House last year to the then Opposition. I am afraid that it does not close them absolutely, but it does close them substantially.

I will go into that aspect in more detail. I will turn my mind particularly to what is known as the widow's pension. About half of the recipients of widows' pensions are not widows in the technical sense at all; they are divorced and separated women, etc.

MrJames- Half?

Mr WENTWORTH - Yes, half. There is the very distinct possibility that people who were contemplating separation or divorce and wanted to make arrangements by mutual consent under which the wife would not have to be maintained by the husband would be able to come to Australia, get almost instantly an Australian pension and take it away permanently with her for life. This is something which is not terribly good. We do not want to become a kind of divorce Bill for the United Kingdom. It seems to me that, although proposed new section 83ae of the Bill attempts to close this loophole to some extent - perhaps the Minister is a little inexperienced and perhaps he did not quite understand what he was doing - he has not quite closed that particular loophole. It is true that a couple coming from overseas, contemplating this separation or divorce, would have to serve their 5 years here, but if they came from the United Kingdom or New Zealand, that of course would not be so. I think it would open the door to very considerable abuses. I will be taking a point in regard to the drafting of proposed new section 83ae in Committee, which is a technical point perhaps but I think the Government should consider it. I would suggest to the Government that it might redraft proposed new section 83ae in order to carry out better the objectives which it has set.

I shall now look at the other question. Let us take an Australian citizen who came from the United Kingdom and has been in Australia for 10 years and therefore is eligible for a pension in his own right irrespective of the agreement with the United Kingdom. At present that person could not take his pension overseas, but if he went back to the United Kingdom his pension would be paid there. This, of course, is balancing up the obligation we have undertaken to pay pensions to United Kingdom residents here in Australia, If he went back the pension would be paid by the United Kingdom. Under this Bill, if he went back the pension would not be paid by the United Kingdom; it would be paid by us because our rate is in excess of the United Kingdom rate. If he had the qualifying period in the United Kingdom before he came here, as many of these people have, he would be entitled to draw a British pension as well as an Australian pension.

Mr James - The two?

Mr WENTWORTH - He would be entitled to draw the two because the British pension, being a contributory pension, is of the nature of property. There are technical things which flow from the agreement. I know there are legal difficulties. It is quite a subtle business in order to see how the impact of the agreement is felt. It is perfectly true that the Minister in his second reading speech said that he proposed to renegotiate the agreement but, as the honourable member for Corangamite (Mr Street) said a moment ago, renegotiation means both sides. Both sides must come to some agreement in regard to this. This renegotiation will be dependent on the proposals we make being acceptable to the United Kingdom, unless the Minister intends to take the strong arm view and say to the United Kingdom: 'If you do not like our terms we will denounce the agreement, as we have a right to do, and then former United Kingdom citizens in Australia will not get the benefit of the agreement'. I do not know what the Minister means to do. It may well be that there will be amity and reasonableness about the negotiations. But when going into negotiations of this character I do not think it is a good thing to give away everything in advance, as this Bill apparently does.

In Committee I shall be speaking about some of the technicalities of proposed new section 83ae. I will not go into that now. There is just one final point that I want to make which is of substance and which I think is proper to be made in my speech at the second reading stage. We all want a fair thing to be done to the migrants that come to Australia, whether they come from the United Kingdom or from Europe or wherever it may be. Wherever they come from we want to treat them fairly, but we do not want to be over-generous to them at the expense of the Australian taxpayer. We have to think of the interests of the ordinary Australian, and in thinking of that we are also thinking of the interests of the migrant, because if we are over-generous there can be a backlash and that kind of backlash is not in the interests of the migrant community. The migrant community should be treated fairly, but if migrants require over-generous treatment, in the short term they may get advantage and the Australian Labor Party may get votes, but over the long term that is not to the advantage of the groups in the migrant community. They need goodwill and they are entitled to goodwill for fair treatment. This backlash can be quite dangerous.

I do not know whether honourable members - 1 am speaking now not of migrants but of Aborigines - saw recently on television a backlash from towns in the Northern Territory about what was being done for our Aborigines. I am entirely in favour of differential treatment for the advantage of our Aborigines. I am in favour of that - and I do not want anything I say to be misinterpreted - but if you go too far there is always the possibility of a backlash which in the end does damage to the very groups whom you are trying to help. For the migrants also I say this: A fair go is what they are entitled to and what we should give them, but we should be very careful that we are not opening the Australian Treasury to plunder - not by the migrants who are here; they are not the people I am talking about at all. I am talking about the carpet baggers who might come here, if the loopholes were, here, for the express purpose of plundering the Australian Treasury. This we do not want, and if these carpet baggers come from overseas to Australia for this purpose they will be doing things which are to the disadvantage of those good migrants who are now in Australia, whom we want to help and who are entitled to fair deals.

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