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Wednesday, 30 November 1983
Page: 3005

Senator ROBERT RAY —I direct my question to the Minister for Social Security. I preface it by saying that the Minister will be aware that many retired members of our community invest their life savings in non-interest bearing accounts. In the light of that, will the Minister's Department publish a series of comparative tables so that retired members of our community can establish how best to maximise their incomes?

Senator GRIMES —I thank Senator Ray for the question. Many retired members of the community in recent years-certainly since the introduction of the income test, as distinct from the means test-have been putting their money into non-interest bearing accounts, such as cheque accounts, in order to avoid the income test. Frequently this has been most unwise. This has been demonstrated in particular by figures Senator Gietzelt has released regarding applications for service pensions. The great tragedy of this situation, of course, is that people have been investing large amounts in interest-free deposits. The capital amount is eroded year by year by inflation, particularly by the sort of inflation rate which we have had in recent years. Banks and other organisations have taken great advantage of this. The people have been able to receive a pension and fringe benefits which they would have been better off not receiving. It would have been better for them to invest their money in a sensible way to their advantage and to the advantage of the country.

We intend to introduce the assets test. We are introducing tables to show how that assets test will affect pensioners. I will certainly take up Senator Ray's proposal that we put out tables to assist people on how to invest, and invest wisely, within the pension system. I believe the investment industry in this country, as has been said in interviews on programs recently, is now anxious to concentrate on providing proper investment advice to people rather than merely advice on how to avoid the income test or taxation. I hope that in the future the combination of that advice and new initiatives brought out by the Government will result in more sensible investment and a better and more adequate income for all retired people in this country.