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Thursday, 6 April 2000
Page: 15515


Mr ANTHONY (Minister for Community Services) (11:51 AM) —in reply—I thank members on both sides of the House for their contribution to the debate on the Social Security and Veterans' Entitlements Legislation Amendment (Miscellaneous Matters) Bill 2000. I make special mention of the contribution by the member for Parramatta—indeed, his contribution to many debates.

This bill gives effect to measures announced as part of the 1999 budget relating to the simplification of international payments relating to portability and the use of tax file numbers in data matching of employment declaration forms—EDF—the prescribed payment system—PPS—and the reportable payment system—RPS. The bill also makes some minor amendments relevant to the four per cent concession for social security payments associated with the introduction of the government's tax reform package.

Schedule 1 of the bill amends the Social Security Act 1991 to allow for changes in international portability provisions. At present the rules relating to portability vary from payment to payment. The measure will standardise these rules as far as possible subject to the qualification rules that apply to each payment. This bill will also provide for the standardisation of portability rules, the consolidation of working life residency rules and the phasing out of special needs pensions and extends to two years the short residence rule.

Uniformity is a key feature of the portability requirement of this measure. Portability of a payment overseas is conditional on continuing qualification and, where qualification is maintained, all payments will be portable for up to 26 weeks. Currently, a person claiming or receiving a social security payment may be required to make an effort to claim a comparable overseas payment to which they may be entitled, if the payment would be made by a country with which Australia has an international social security agreement. This bill will extend this requirement to all countries. However, so as to encourage people to come forward and disclose a potential entitlement to a foreign payment, a social security amnesty will operate until January 2001. This amnesty will be limited to income from foreign pensions. During the period of the amnesty, all Centrelink customers will have the opportunity to declare their foreign pension income to Centrelink without risk of penalty. As part of the bill, minor amendments will also be made to the provisions relating to qualifying residence rules for Australian entitlement, with a view to achieving better consistency.

I turn to the data matching provisions in the bill. Currently, the ATO regularly provides Centrelink with data, with data matching being carried out using identity data—for example, name or date of birth. There are difficulties in identifying customers who have inadvertently or deliberately provided different personal details to the ATO and Centrelink. These measures provide for the tax file number to be used as the primary matching key, with the objective of strengthening compliance with the social security law, particularly the provisions dealing with the income test. The Privacy Commissioner has been consulted in respect of the changes. Matching will be undertaken in accordance with the commissioner's guidelines. As part of the tax reform package, social security pension rates are to be increased by four per cent from July 2000 to compensate for the effects of the GST. The four per cent increase in pension rates will take the form of a pension supplement and will be added to a person's maximum basic rate of pension.

Amendments were undertaken in the A New Tax System (Compensation Measures Legislation Amendment) Act 1999—the compensation act—to incorporate the pension supplement into social security law. Amendments need to be made so that the four per cent increase will also be applied in the calculation of a person's pension bonus and in working out a farmer's maximum basic entitlement for the purpose of the retirement assistance for farmers scheme.

Earlier today in the House, in talking to this part of the bill, the member for Lilley once again proved his failure to understand the real benefits of tax reform and the associated compensation to pensioners and retirees. Pensioners will always be better off having received a savings bonus. The two savings bonuses that will be paid as part of the new tax system will help to maintain the value of savings and the retirement income of older people. This is particularly welcome in my electorate of Richmond where, in the Tweed, over one in four people are over the age of 65 and a higher proportion are over the age of 55.

The member for Lilley claimed that pensioners will be worse off by receiving their savings bonus. The clear facts are that pensioners can receive a bonus payment of up to $1,000. Pensioners can decide to invest this bonus or they have the choice of spending this money. On top of the savings bonuses, the government will also be providing other forms of generous compensation, including the 2.5 per cent increase to the assets test threshold and reduced personal income taxes through a number of measures in the tax system—including higher income tax free areas, reduced marginal rates of tax, more generous treatment of franking credits and the abolition of provisional tax.

This bill will provide for a much simpler way of dealing with portability and residency requirements for social security payments. It will do this by standardising provisions relating to domestic residence and overseas portability requirements. The bill will also complete a regime for providing compensation to social security payment recipients in respect of the new taxation system. It will also provide for more robust systems of data matching social security payments through the use of a tax file number.

Once again, I thank members for their contribution to the debate and I commend the Social Security and Veterans' Entitlement Legislation (Miscellaneous Matters) Bill 2000 to the House.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that the bill be reported to the House without amendment.