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Tuesday, 26 September 1972
Page: 1164


Senator GREENWOOD (VictoriaAttorneyGeneral) - in reply - I appreciate the speed with which the Senate has approved this Social Services Bill (No. 4). I recognise that the Australian Labor Party has moved an amendment which I think does not challenge the essential outlines of what is proposed by this measure, but which reflects the obligation of the Opposition not to allow too much Government legislation to pass through this chamber without some comment. As Senator Laucke has said, this is excellent legislation, lt is significant in what it proposes. It is remarkable in the change which it is bringing to the lot of those who depend upon the pension. The Government's Budget proposals insofar as they relate to social services strike new ground in a number of ways. In the first place the basic pension rates have been increased in a manner never before paralleled in the history of the pension in this country. Secondly, we are taking steps to provide for those whom the Minister for Social Services (Mr Wentworth) has so aptly described as the ailing aged. Benefits are being provided by way of extra domiciliary care, provision for units or hostels in connection with the aged persons homes scheme and very significant increases are provided in the benefits for those who are required to be lodged in nursing homes. In addition to those specified proposals the Government has undertaken that within a 3 year period it will arrange for the abolition of the means test. Those are the 3 significant features of the Government's Budget proposals in relation to social services.

This legislation will increase the basic rates of pensions. I repeat that the standard rate of pension is increased by $1.75 a week to S20 a week. The rate for a married couple has been increased by $2.50 a week so that it will now provide them with $34.50 a week. In addition there is a new provision under which the wives of pensioners, whether they are age or invalid pensioners, will be entitled to a pension at the married rate. As I have stressed, these are significant changes. The benefits which they produce will be felt by those who receive them. I thought it was somewhat carping of Senator Gietzelt when he addressed himself to these proposals to suggest that it was difficult to accept that these figures represent an improvement in our standard of living.

As Senator Laucke has said the increases which have been made, when coupled with the increases which have taken place 4 times in the last 18 months, represent a very significant change in the lot of those who have nothing but their pension on which to depend. It is not only the money sum which is available, nor is it the increase in the money sum which has been achieved over that period but also it is the qualitative purchasing power of that money sum. I suggest that if one looks at the increase in the consumer price index over the last 12 months and at the increase in the pension rate over that period one can see that, in accordance with Government policy, followed over a period, there has been an increase in real purchasing power. In the last 12 months the cost of living as measured by the consumer price index has risen by 6.14 per cent. But in the 12 months between the 1971 Budget and this, the 1972 Budget, the standard rate pension has gone up not by 6.14 per cent but by 15.94 per cent. The increase in the married rate of pension has been 13.1 1 per cent. The supplementary assistance rate for those who have rented premises and who are required to pay rent has gone up from $2 to $4 a week, an increase of 100 per cent.

The Opposition has not made any mention of this, but I can recall barely 2 years ago, I think in the last Budget which the Government brought down during the Prime Ministership of Mr Gorton, it was suggested that the Government, by allowing only 50c a week increase in the pension, was not allowing the pension to keep pace with what was required in the way of purchasing power. The illustration which was then used constantly was to refer to the consumer price index. I know that at that time the consumer price index showed roughly the same percentage increase as did the pension. But it was said that unfortunately this indicated that by the time the year was out the pension increase would bc quite inadequate. I think it is fair enough in this year 1972 to look again at the increase in the consumer price index and to contrast that percentage increase with the increase in the pension. The increase in the pension rate is more than double the increase in the consumer price index. I think that sort of thing is an indication of the real measure of assistance which this Budget is providing for those who depend upon the pension. It is a significant Budget. The increases which we are now considering are remarkable for their size.

The amendment which has been moved by Senator Gietzelt on behalf of the Australian Labor Party is, I respectfully submit to the Senate, an amendment which is rather meaningless in what it conveys. It suggests that to the motion: 'That this Bill be now read a second time* a rider should bc tacked on in the following terms: but the Senate is of the opinion that the only satisfactory way to provide social service benefits is through a comprehensive national system of social security where benefits are above the poverty level and tied to an index adjusted at least annually.

There are 3 things which I think should be said by way of opposition to that amendment, apart from the general criticism that to add words of that character really does not advance the cause at all. In the first place, undoubtedly it is a satisfactory way to provide social services to have a comprehensive national system of social security. The realy important thing, however, is what is comprehended within the system of social security. I believe that we have a very satisfactory national system of social security at the present time. We have evolved a standard which does provide security for persons who, by their thrift and energy, are prepared to look after themselves and for those who reach an age at which they arc entitled to look to the society of which they are a part and to the wealth of which they have contributed to provide for them in their old agc something to which they can look forward with a high degree of anticipation and satisfaction. I think it is known that the main thrust of the Government's social services legislation over the past 20 years has been directed towards providing for those in need. We have reached the stage where, having achieved something which 1 think would be the envy of the world, we can now move to ensure that thrift is not penalised and that the means test which has been a simple part of our social services system up till now is abrogated.

I have often referred to a statement by Professor Ronald Henderson, who, of course, was the author of a study which has been published as 'People in Poverty - a Melbourne Survey', and who is well recognised for the examination and attention which he has given to the problem of poverty in Australia. It has often been said that his surveys have illustrated that Australian pension rates are not as high as they could or should be. But that is only one side of the picture which Professor Henderson has presented. When put in context, I think that he has demonstrated that the level of poverty in Australia has been reduced - if not eliminated - to a degree almost unparalled through the world. J refer lo a letter which he wrote, defending the Australian position, to the London 'Times' on 17th April 1971. He said: lt. is our judgment-

That is, the judgment of his Applied Economic and Social Research Institute - that the incidence of poverty in Australia is lower than in any country in the world, with the possible exceptions of New Zealand and the Scandinavian countries, and that the distribution of wealth and income is more equitable than in any other country with the same possible exceptions.

That is the judgment of a well recognised institute in this country upon which we would do well to ponder and in which we can also take some pride.


Senator Webster - Has the AttorneyGeneral noted that in that survey Professor Henderson used a line to the effect that he found no poverty in any Melbourne family which was in receipt of an income?


Senator GREENWOOD - I have not read that in the survey. 1 was merely quoting from a letter which Professor Henderson wrote to the London 'Times'. The purpose of the survey he undertook was to ascertain the incidence and nature of poverty in Australia and what he reported was of tremendous interests He is now to head the Government's own inquiry into poverty. On an Australia-wide basis, I think that will provide a basis for instruction on future action. I have mentioned those things because I feel, looking at the suggestion by the Opposition that there is a need for a comprehensive system of national social security, that we do have a system of social advancement and social security in this country which has achieved a tremendous amount for those who have a legitimate welfare claim upon the society of which they are a part.

The second part of the Opposition's amendment suggests that the social security scheme should be one in which benefits are above the poverty level. For anyone to suggest, as Senator Gietzelt did, that an equating of the actual money sum of the pension today to average weekly earnings in this country will show that the position is slightly less or about the same as it was some 23 or 25 years ago is to ignore the changes which have taken place over that period. These changes make unreal a simple comparison of money figures because today there is a supplementary allowance for rent, which, by the passage of this legislation, is to be increased to $4 a week. That allowance did not exist in 1947 or 1949. So, strictly speaking, one should add that amount to the existing pension rate in the case of a single pensioner who is required to rent premises or, as a result of the passage of this legislation, in respect of married rate pensioners where a married couple have to rent premises. That would increase the standard rate pension from $20 to $24 a week and the married rate from $34 to $38 a week.

One has also to take into account all of the benefits which are described as fringe benefits that have grown up over the years. I refer, for instance, to the national health scheme and the advantages which that provides such as free treatment in public hospitals for pensioners. Then there is the telephone concession and the transport concessions provided by the States. Benefits are also provided with regard to licences for radio and television sets. In terms of money, those benefits build up to a very substantial sum. I do not believe that anyone who looks at the position of pensioners objectively can have any other view than that the affluent Australian community is certainly sharing its wealth with those who have some demand upon the conscience of society. Therefore, I do not believe that the proposition contained in the Opposition's amendment that benefits should be above the poverty level represents a legitimate criticism of the present position.

The third proposition which is contained in the Opposition's amendment is that social service benefits should be tied to an index adjusted at least annually. I notice that the Labor Party has indicated a caution which reveals its uncertainty in this area.


Senator Gair - Which Labor Party?


Senator GREENWOOD - The Australian Labor Party. I apologise to Senator Gair. We are accustomed to regarding Senator Gairs Party as the Democratic Labor Party. The Australian Labor Party's policy, as 1 recall it, is that the pension should represent 23 per cent of the average weekly earnings. It is a little curious that the Labor Party has not made that point in the amendment which it has moved. But if one looks at the present average weekly earnings and adds to the standard rate pension of $20 a week the $4 a week supplementary allowance one finds that the position is as the Labor Party says it ought to be. It may be that that is one reason why the Labor Party's amendment does not seek the tying of the pension to the average weekly earnings index.

The generalised description in the amendment that social service benefits should be tied to an index adjusted at least annually suggests that all forms of benefits should be lied in some way to an index. I think there is an essential flaw in that approach which experience has indicated. We know that in the late 1930s the United Australia Party Government introduced and then abandoned a system under which the pension was tied to the consumer price index because there were occasions when, as a result of a drop in the index, it would have been necessary to reduce the pension, and no government would be prepared to do that.


Senator TURNBULL (TASMANIA) - Has there ever been a drop in the index?


Senator GREENWOOD - Not in recent times, but in 1940-41 a Labor Government did precisely what the Labor Party's amendment today suggests should be done, that is, tied the pension to the consumer price index, but when a movement in the consumer price index in 1944-45 would have involved a drop in the pension the nexus was immediately broken. That could happen in the future. On the other hand, we might find that in a particular period the movement in the index has been so fast that it represents an inflationary situation which would have alarming national consequences if the pension were moved in the same way and exactly proportionately. The Government would have an obligation to determine whether that should be done. I believe that, difficult though the problem is from time to time and embarrassing though it may become, the Government must accept as one of its responisibilities that it fixes the actual rate of pension. I believe that a system under which the rale of pension is tied to an index is unsatisfactory. Therefore, the Government will oppose the Australian Labor Party's amendment. 1 notice that the Democratic Labor Party has foreshadowed an amendment. Let me indicate at the outset that the Government will not support that amendment cither. I do not believe that it introduces into this debate a proposition that is novel. We have heard from members of the Democratic Labor Party in the past - I think it is their traditional policy - the argument that pension rates should be fixed by an independent tribunal. For my part: - this is a view that the Government also has expressed in the past - the fixing of pension rates by an independent tribunal would be a divestiture by the Government of a responsibility that it must accept.


Senator Gair - Then why does not the Government determine wages?


Senator GREENWOOD - The difference that is to be drawn may not be as significant as members of the Democratic Labor Party would make it. The difference between a tribunal that fixes pensions and a tribunal that fixes wages is that a tribunal that fixes wages, such as the Conciliation and Arbitration Commission, is a body which undertakes a judgment that will have ramifications across the whole range of industry and a body which, in the public interest, has been established to resolve disputing claims between employer and employee. In that sense it represents the community interest in resolving what otherwise might be resolved only with great strife and hardship to the community; whereas a tribunal that fixed pensions would be determining, in effect, what the community can allow or what the Government can allow, having regard to all its other items of expenditure, by way of remuneration to pensioners. I believe that this is an area in which the Government must make a judgment that the amount it spends on social services is to be measured against how much is to be spent on education, how much is to be spent on defence-


Senator Byrne - That would applyalso to the imposition of taxation, if that principle were correct.


Senator GREENWOOD - If I understand Senator Byrne's interjection correctly, let me say that taxation must necessarily be dependent upon the amount of revenue that the Government requires for particular objectives. If the Government, for example, were to eliminate altogether the payment on social services and the payment on defence, one would suppose that the rate of taxation would be reduced very significantly. On the other hand, if the Government were to accept the obligation to increase expenditure as a tribunal that fixed social service pensions decreed, that may in its turn have some impact upon the level of taxation.

I appreciate that this is a matter that the Democratic Labor Party has raised before, and I sense that what I have said by way of answer to it also is not new. The other aspects of that Party's foreshadowed amendment also are matters upon which its members have indicated concern in the past and in respect of which there is nothing new. The Government, of course, provided for increases in the child endowment rates for the third and successive children in the 1971 Budget. Having regard to the substantial benefits that have been provided in other areas on this occasion. I think I can meet the Democratic Labor Party's objection to the present Budget by saying that not every matter that has been raised could be dealt with in this Budget, but the social services proposals that the Government has introduced stand on their own because of the intrinsic merit they possess. The Government will oppose both amendments; but otherwise it draws encouragement from the fact that only one member of the Opposition has spoken against these proposals and that opposition was expressed only in terms of an amendment.

Question put:

That the words proposed to be added (Senator Gletzelt's amendment) be added.







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