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Monday, 25 March 1985
Page: 877


Mr GEAR(10.30) —The pensioners of Australia today are covered by a very much fairer pension system because of the introduction of the assets test. I would like to spend some time tonight having a look at a bit of the history of the assets test. It is clear from the examples of some of the speeches of honourable members opposite that people on the other side really do not know what they are talking about. The history of our pension system goes back to good old Bob Menzies, the pariah of the Liberal Party of Australia, who gave the people of Australia the freedom of choice to look after their own retirement incomes. The freedom of choice principle still operates today. I hear it talked about now and again on the other side of the House. Certainly, we can have a look at the protection system which Mr Menzies built into that system. He had an income test and he also had an assets test. In actual fact an assets test was a feature of the pension system in Australia between 1908 and 1976. So for a relatively short time in our history we have not had an assets test.

This Government had the guts to put one back in because we could see what was happening to the pension system without one. People of substantial means, as the Minister for Social Security (Mr Howe) pointed out the other day, were able to arrange their affairs in such a way that they were able to get a pension and the fringe benefits. What they really did was to lower the amount of money we could give to pensioners in need. So when we talk about the assets test we should remember that it is not a new thing. It has been in existence for quite a while.

Let us look at the demise of the assets test. I would ask those students of politics to look at the relevant dates because they will notice that proposals in relation to the pension always appear just before a Federal election. The tapered means test which was introduced in September 1969 affected 47,000 pensioners. In September 1972 there was an increase in the free area and 30,000 pensioners were affected. Also in September 1972 we had the superannuation and annuity concessions. That was, again, as I have said, just before the Federal election of that year.


Mr Bilney —It did not save them.


Mr GEAR —It did not save the Liberals that time and neither did a subsequent proposal. In November 1976 there was the introduction of the income test and 200,000 pensioners were allowed to have pensions when the assets test was scrubbed. If we thought it all ended there we were wrong. In November 1982, in the infamous family Budget of that year, 420,000 pensioners were affected by the increase in the free area. That was another sop to the pensioners to try to get back into power. But, as history records, that did not happen and the Hawke Government came to power.

There are only two options the Liberal Party or the conservatives can put to the people of Australia if they are really dinkum about scrubbing the assets test. The honourable member for Bennelong (Mr Howard) knows that well because at least he has a grasp of the fundamentals behind the scheme. Next time the Liberal Party can either raise taxes to give the pension to those people who are scrubbed off this time-the richest 2 per cent, I remind honourable members-or it can do as it did before. This is the likely option: It can allow the value of the pension to drop over time. History shows that when the Whitlam Government was kicked out-


Mr Beale —Kicked out? I thought the people made their decision.


Mr GEAR —Sacked, or whatever one likes to call it. When the Whitlam Government left office the pension stood at 24 per cent of average weekly earnings. When the Liberal Party was kicked out of office in 1983 the value had shrunk by about three percentage points. We can see what the Liberal Party is all about. It is all about the erosion of the pension system by stealth.

We can look at some of the supporters of the assets test that was re-introduced by the first Hawke Government. The honourable member for Mayo (Mr Downer) the other night bagged the assets test. But what did he say before he was a candidate for the Liberal Party? This is what he said:

The government is absolutely right in introducing an assets test . . .

He went on to say:

The latest version of the assets test proposed by the government offers a much more equitable formula than has previously been produced . . .


Mr Bilney —Who said this?


Mr GEAR —This is the honourable member for Mayo who bagged the assets test the other night. He also said:

It would be folly . . . to reject the assets test outright, as it is the only avenue which leads to effective control over the spiralling costs of retirement policies.

He would be a good Liberal because he, like the Leader of the Opposition (Mr Peacock), is saying that it is equitable, but when the Liberals get into power they change their tune. John Elliott, the Treasurer of the Liberal Party in Victoria, said:

I have always argued that the social security system should be based on need. Therefore I do support the assets test . . .

The Liberals support it too. We can look at what we will do in the next election campaign. The pensioners of this country will always remember the party that lied to them and the party that put in the scare tactics. If the Liberals were responsible they would be agreeing with us and educating the pensioners, as did the honourable member for Wide Bay (Mr Millar) who did not get them upset. At least he had the guts to tell the bloody truth which is something the Liberals never did.