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Monday, 22 April 1985
Page: 1578


Mr GEAR(4.08) —In speaking to the National Welfare Fund Repeal Bill l985, I am cognisant of the historical connections that our actions today have with those of the wartime Curtin Government. It was that Government which introduced the National Welfare Fund Bill of l943 to provide finance for a number of social security benefits, including initiatives for maternity allowances, funeral benefits for pensioners and a sustenance allowance for the dependants of invalid pensioners. When we look at that Bill of l943, a number of principles embodied in the legislation of the day maintain their relevance today. The benefits were available to all. It was felt at the time that the social stigma certainly felt by people at the lower end of the spectrum needed to be addressed at the time. Certainly one aspect that comes to mind is the provision for funeral benefits for pensioners, because of the social stigma that was attached at the time to people having a pauper's funeral. When one reads the speeches of l943 and looks at the words that were used in those days, one can see that the overriding social conscience of the then Government was to make sure that that social stigma, to the largest extent possible, was alleviated.

Another principle was the ability to pay. Of course, by paying the benefit out of Consolidated Revenue it was taken from all taxpayers. However, some of the benefits up to that time relied on private contributions, and people who were at the lower end of the socio-economic scale of the day could not afford them. While I was reading some old speeches I came across a speech by a Mr Pollard, who was in 1943 the honourable member for Ballarat. He had this to say about the Bill:

Behind all the opposition to this bill is the fact that the tax by which the necessary funds are to be raised is to be levied in accordance with the taxpayers' ability to pay.

If we bring our minds back to l983 when this Government brought in Medicare we will see that the very same principle applied. We recognised that the ability to pay should not be the principle by which people receive medical treatment. It should not be based on the fact that some people can pay more than others. If we adopt that principle we will be looking at people who will receive better treatment than others for their medical condition solely because they are wealthier. Another significant fact is that the Opposition of the day proposed a flat levy in exactly the same way as the medical system required prior to Medicare.

A second feature of the Bill of the day was that the money that was not expended was invested for the future. That was a radical departure for the government of the day. It indicated to me that that Government was willing to look further into the future, certainly more so than governments which have followed it. I will speak briefly on the relevance of that to the age pension. The Superannuation Act 1943 in some ways was the embryo of a national superannuation scheme; it certainly had some significant points going for it. If this scheme had continued we may today have had a national superannuation scheme instead of the age pension system. In l974, 5.75 million people in Australia were in civil employment and 29 per cent of those had access to a superannuation fund of one kind or another. Thus honourable members can see that the provision of superannuation entitlements is not universal in Australia. It was not in l974 and it certainly is not now and that is something that needs addressing.

An Australian study on superannuation showed a great imbalance. This private study covered 583 private businesses within Australia. Fifty-six per cent of the males in those businesses were covered by superannuation, whereas only 22 per cent of the women were covered; so there was a great imbalance. There was also a great imbalance according to which end of the spectrum one worked at. For example, 9l per cent of the executives, 72 per cent of salaried people and only 32 per cent of the workers had access to superannuation. Certainly the proponents of the l943 Bill were very much more aware of the age spread than were the governments which followed them. Australia does have an aging population. I am sure that what was in the mind of the Government in l943 when it brought in the National Welfare Fund Bill was that services for the aging population would have to rely on investing money for the future rather than paying it, as we do now, from taxes collected in the year in which benefits are paid.

In l88l only 2.5 per cent of the population was over 65. By l98l, l00 years later, that figure had risen to l0 per cent; and, if we project into the future to the year 200l, in excess of l2 per cent of the population will be over 65. The fundamentals of the l943 National Welfare Fund Bill should be addressed again in this place when we start to look at social security provisions for the future.

In l938 the conservative Treasurer of the day, Mr Casey, was concerned at the cost of pensions and made a 40-year projection. In that year he predicted that in 40 years there would be l.28 million pensioners. In actual fact there were l.38 million pensioners. So his prediction was fairly close; he was within 2 per cent. He predicted that the cost of those pensions in l978 dollars would be $476m but in actual fact it amounted to $3,229m. So when he came to estimating the cost to revenue of those pensions he was out by a massive 680 per cent. That gives honourable members an idea of the sorts of figures we are working with. Once again I go back to the principle involved in the National Welfare Fund Bill l943 of investing money so that in the future we can draw on money that people have earned in the past and that money will build up into a significant amount so that we can afford real benefits for people as they retire. We should also be able to afford social security provisions for welfare people as they need them.

Another point about that Bill was that it was opposed by the conservatives of the day. However, that is nothing new. Just about every major reform that the Australian Labor Party has brought into this House has been opposed by them at one time or another. So in that regard nothing has changed. We are coming up for another reform this year. As we all know, the tax system is long overdue for reform. We will see how the Opposition plays its cards on that one. In Question Time the Prime Minister (Mr Hawke) gave us a fairly good indication of how we should view that. When speaking on the National Welfare Fund Bill Mr Morgan, who was the then honourable member for Reid, had this to say about the Opposition's tactics:

When it was proposed 30 years ago to establish the Commonwealth Bank the argument advanced against it was that it was a 'phoney scheme' and a 'confidence trick'.

Some other terms used by Opposition members to describe the National Welfare Fund Bill l933 were 'Frankenstein monster', 'nebulous and hollow sham', 'fundamentally unsound', 'fantastic', 'too visionary', 'a wildcat scheme', 'the time is not right' and 'a confidence trick'.


Mr Kerin —They never learn.


Mr GEAR —The conservative parties never learn; they are still saying the same things today. It will be very interesting when the tax reform comes up because to see the back of a Liberal one has only to mention the word 'reform'. A sniff of reform in the air and the Liberals are gone. The Leader of the Opposition (Mr Peacock) has already said that if he were given an invitation to the tax summit he would not attend.


Mr Kerin —They are very worried.


Mr GEAR —I think they should be worried because the Liberals realise that if we do reform the tax system they will be in opposition for a very long time. In l950 and l95l the formula by which money was paid into the account was changed. It was based on payroll tax with an amount paid from Consolidated Revenue which rose proportionately to the increase in payroll tax. That year the amounts were $l0lm from general revenue and $26m from payroll tax. The formula was that as payroll tax increased so too did the amount paid in from Consolidated Revenue. In l952 that scheme was changed to what we have today, so that a sum equal to expenditure was paid into the account from Consolidated Revenue. The Government did not get rid of the Fund; what it did essentially was to make sure that the money that was paid out of the account in any year was matched by money paid into the account from Consolidated Revenue. It is this problem which we are addressing today. We are getting rid of the National Welfare Fund so that payments can be made straight from Consolidated Revenue and not through the Fund. While I am on this subject, I address a question to the Minister who will be wrapping up this debate. I refer to a statement recorded on page 638 of Hansard of l952. Sir Arthur Fadden, the Treasurer of the day, in his second reading speech had this to say, among other things:

The amendment of section 5 of the National Welfare Fund Act embodied in the bill will ensure for the fund an annual appropriation from Consolidated Revenue equal to expenditure from the fund; it will preserve the existing balance of #l85,000,000 in the fund and will permit the balance to grow each year by the amount of the income from its investment, which it is estimated will be #l,800,000 . . .

I work that out to be roughly one per cent a year. Whatever became of the #185m which the Fund had accrued until 1952? The National Welfare Fund Repeal Bill 1985 is no more than a tidying up of messy bookkeeping procedures, because all benefits come from Consolidated Revenue.

I have appreciated the opportunity to participate in the debate. It gave me the opportunity to read the history of and debate on this Bill, which was a significant advancement for people at the lower end of the socio-economic structure. This happened in spite of the many demands of the war effort and the ever present, and still continuing, obstruction of conservative forces, which are at this moment waiting in a destructive way to sabotage this Labor Government as it sets itself the difficult task of reforming a tax system that penalises those very same people. We do not run away from the fact that it is a difficult task, but we can draw some strength from the Curtin Government in 1943 which confronted the problem and won some justice for the people of the day despite the many demands on that Government.