Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 19 June 2001
Page: 27978


Mrs IRWIN (6:07 PM) —This budget will become a nightmare for ordinary Australian families. They get nothing from this budget. There is nothing to reduce hospital waiting lists. There is nothing to improve their children's schools. There is nothing to fix our roads to improve our nation's productivity. There is nothing to boost our training and technology to give Australia a competitive advantage in the face of globalisation. Who are the people who are supposed to be the winners in this year's budget?

When the newspaper headlines described this budget as one for the golden oldies, I thought I would check the reaction of some age pensioners in my electorate. My first call was to a dear old lady—and I use that term in the nicest way. She lives on her own in a pensioner unit. She is over 80 years old and got nothing from the government's promised $1,000 GST compensation last year. So when I asked her what she was going to do with her $300 I was at first surprised when she said she was thinking about giving $20 to her neighbour. Her neighbour is a woman of 58. She suffered a stroke some years ago and is paralysed down one side of her body. She is on a disability pension and will get nothing from this budget. According to the Treasurer, she is not deserving. Her needs are no different from those of an age pensioner. In fact, because of her condition she faces higher expenses than most but she must pay GST on her gas bill to keep herself warm this winter, she must pay GST on her electricity bill, she must pay GST on her phone bill—even though the telephone is now the only way she can stay in touch with her family. She may be needy but, according to the Treasurer, she is not deserving so she gets nothing. It is no wonder that so many age pensioners can see through this government's attempt to bribe them, because they still have the decency to know the difference between genuine help for the needy and a clumsy attempt to buy votes.

My next visit was to an age pensioner couple living in their own home, the home they built 40 years ago. When I asked for their reaction to their $600 jackpot, I was greeted with loud laughter. `Just take a look at this!' said the lovely gentleman, and he showed me the bill for the recently completed renovation to their bathroom. There it was, the second last line on the bill, `GST, $580.' There are many struggling families in the Fowler electorate. There are more children under five years old than there are people over 65. Families are struggling to pay the rent or pay off a mortgage, something that most wealthy, self-funded retirees do not have to worry about. Families are struggling to pay for their children's clothes, school uniforms and school books—all now with GST added. These are all things that wealthy, self-funded retirees do not have to worry about.

Here we have a situation where a full-time employee on what is now the minimum wage of $20,000 per year can expect to pay $2,380 in income tax while a single, self-funded retiree on $20,000 per year pays nothing. A worker earning $32,612 per year can expect to pay $6,163 in income tax while a retired couple will pay nothing. When you consider that the tax break extends as far as $58,200 for retired couples, this far exceeds the median income for families with children at $52,000 per year. Wealthy retirees with cash assets can find lots of ways to minimise their taxable incomes. Where does all this lead us?

The Treasurer must be the only person in Australia who has not noticed that we have an ageing population and that the burden of supporting that population will fall on a smaller and smaller proportion of the population in the coming years. If he has not noticed, this is the year 2001: the first baby boomers, born in 1946, are now turning 55. They can already access the tax concessions granted to self-funded retirees in the Treasurer's 1996 budget, and in 10 years time they will be eligible for these over-generous tax concessions. `They deserve it,' says the Treasurer. He is quick to overlook the fact that many self-funded retirees over the age of 65 enjoyed generous tax concessions as they built their wealth through superannuation.

Who is going to pay for this? No doubt, many baby boomers will now factor the tax break into their retirement planning. For some it will mean they can now retire earlier or reduce their saving rate because they will not need as large a nest egg as they would have before the changes. I hardly think that is a good thing for the economy. We could easily find in 10 years time governments of either party looking to reverse these tax breaks, but that will not be easy. By then nearly 40 per cent of voters will be over 55, and trying to take the tax breaks away will be like trying to take a rattle from a baby. If you can remember the campaign waged against the Labor government in the 1980s, when changes were made to the assets test for pensioners, you might get some idea of how difficult it would be. Australia's future economic prospects are not so rosy that you can afford to commit future governments to funding such generous tax breaks for an unproductive sector of the community. This legacy of the Treasurer and the government may be a poisoned chalice. This action by a government desperate to hold onto power at any cost may come back to haunt the Treasurer.

Not surprisingly, a large group of self-funded retirees—that is, those between the ages of 55 and 65—will not receive these tax breaks. They, too, are not seen as deserving. Yet this group of self-funded retirees contains some of those in most need. In particular, there are now many self-funded retirees who did not leave the work force of their own accord. They have been made redundant by the many structural changes that have swept through large government organisations such as Telstra. At a time of life when they have less chance of finding work, and receive no assistance to retrain for new jobs, they have been left on the employment scrap heap. They have had no choice but to take early retirement. Even after more than 30 years in the work force, they often do not have sufficient resources to last them for the rest of their lives.

Many have been forced to run down their superannuation and redundancy payments by the cruel action of this government, which denied them support payments in its 1996 budget. At the same time the increased tax thresholds granted to self-funded retirees in 1996 did not allow for this group to top up its income with part-time work. They have been caught in two traps. They were forced to raid their nest egg if they were under 55 at the time of their redundancy and then they were locked out of the work force through a lack of training and tax incentives. For many their only option has been to sell the family home and move to cheaper housing, often in coastal centres where employment opportunities are even more limited. They now look forward to when they reach retirement age so that they can top up their modest superannuation pension with a part age pension.

Clearly this government has no policy to address the problems faced by the nation in dealing with an ageing population when it brings in one-off measures such as those contained in this year's budget, which do not target areas of need but simply try to buy votes. This is a budget for the greedy, not for the needy. Why else would the Treasurer justify his handouts by saying they were deserved—not needed, but deserved? As this budget clearly shows, this is a short-sighted government which cannot see beyond the short term. Thankfully it has only a short time left in office. I call on the Prime Minister to bring on the election because the Australian people will remember this budget and they will cast their votes at the ballot box to elect a Beazley Labor government.