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Friday, 22 March 1985
Page: 797

Mr LLOYD(4.22) —I wish to support the comments made by the honourable member for Denison (Mr Hodgman) concerning the assets test. I refer particularly to the Department of Veterans' Affairs. The area that I represent contains probably one of the largest soldier settler districts in Australia. Many soldier settlers are now becoming eligible to receive the age pension and are hopefully looking to transfer their farm from one generation to the next. I can easily understand the figure that was given by the honourable member for Denison which showed that a higher percentage of veterans than social security pensioners were affected by the assets test. That is certainly the case in my electorate where the number of veterans receiving the pension would be double the national average. A figure released by the Department of Social Security office in Shepparton indicates the very high percentage of people affected.

Unlike the honourable member for Denison, I am very critical of Veterans' Affairs, because it has been using Australian Taxation Office valuers much more frequently than has the Department of Social Security. Valuations are terribly important; they are the critical factor in whether or not a person is excluded from receiving a pension. Remember, one is out once a family's assets are equivalent to $176,000.

Most of the properties in northern Victoria are being revalued, as is required under State legislation. Nearly all of them were revalued, about 12 to 18 months ago when farm and land prices were higher then they are now. As a result it would now be impossible to sell any of those places for anywhere near the valuation price. However, Veterans' Affairs more than Social Security is not accepting even that inflated shire valuation of these properties; it is sending up its own valuers who are valuing blind. One cannot value a property in the irrigation districts of my electorate unless one knows the details of the water right, the drainage situation, how much of the property has been laser graded and a whole variety of other things. One cannot do that by valuing blind. When property owners are asked 'Well, if you want to get the pension, why don't you sell?', they say, correctly: 'The only way we can sell is to accept a price that is about half of the valuation'. In fact, as a result of the announcement made today by the Minister for Primary Industry (Mr Kerin) on the dairy plan they would probably get only about a third of the price. They should be eligible to receive the pension if they sell their property at half the price, which would be below the valuation price. However, they are in a catch-22 situation. To add to the problem, valuations are being made in respect of renting or leasing a place at 10 per cent of its capital value. This is completely absurd and shows the unrealistic criteria being applied by both Social Security and Veterans' Affairs because the going rate for agricultural land is 5 per cent.

We have been told about the hardship criteria. The entry point for the hardship criteria for the assets test is no more than $5,000 in cash or in the bank. Older people in rural areas want to have $5,000 or so because of their concern about the problems of seasonal income variations. We all know that older self-employed people who are concerned about hospital costs and paying for funerals like regularly to put money into a little kitty. The despicably low figure of $5,000 is the cut-off point for these criteria.

We are not talking about the wealthy people of Australia in respect of the assets test. The wealthy people of Australia do not receive a pension because they do not qualify under the income test, although some are so smart that nobody in any government department will catch them. We are not even talking about the wealthy farmers because the wealthy farmers have been able to generate enough income for two generations. We are talking about the people in the poorer structure of the self-employed farming community of this country who are trying to pass on incomes and farms from one generation to the next. We are talking about people who have not been able to transfer their farm through an ordinary sale arrangement to the next generation which has basically been working without income for years. The assets test is now being used against them.

The Government has made a terrible error in failing to distinguish between those in the self-employed sector of this community who must generate their own investment and who must create capital-farming is the most capital intensive industry in this country; that is why it is the most efficient-and those who as a secondary form of investment are using capital to avoid the income test. That is where the Government is hitting the self-employed, and particularly people in the agricultural sector. The Government's policy is ideological. It is completely absurd that people in Sydney or Melbourne with a house worth half a million dollars are not affected at all by the assets test but people with a property worth less than $200,000 which is their sole means of income are excluded.

Mr SPEAKER —Order! The honourable member's time has expired.