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Thursday, 1 March 1984
Page: 210

Senator GRIMES (Minister for Social Security) —by leave-Despite the tone of Senator Sir John Carrick's remarks, I happen to believe that this is a very serious and very important subject. It cannot be dealt with in a series of five minute speeches such as this. The simple fact of the matter is that we have an aging population. We have a large expenditure on retirement incomes in this country. Over the years we have had a very distorted picture. Distortions were created in the system through the taxation benefits which were available to those who were able to take lump sums and therefore get a considerable advantage over those who had weekly superannuation payments or weekly small income payments and over those who were on the base rate pension. Those people who have been fortunate enough to have assets from which they can gain an income but who, under the strange definitions that exist in our system, have had that income termed as 'capital gains' have had an extraordinary advantage-and still have an extraordinary advantage-over those who are on base rate pensions or those who receive small weekly payments. So, by everybody's admission, there is a distortion of the system, a distortion which the previous Government did nothing about and a distortion which it aggravated in 1976 when it made changes to the system.

It is clear and plain that the vast majority of people in the community agree with a needs based system of the type we are trying to introduce. I merely reflect, with regard to Senator Sir John Carrick's remarks, it is very strange that the turmoil and problems that he saw in the community were not reflected in the recent by-elections. The Australian Labor Party gained a swing of 1.8 per cent in Richmond-

Senator Sir John Carrick —Oh, go on. Tell us about Hughes.

Senator GRIMES —It remained the same in Corangamite-

Senator Sir John Carrick —Tell us about Corangamite.

Senator GRIMES —I am telling the honourable senator that it remained about the same in Corangamite and in Hughes the swing against the Government was less than the average swing in by-elections in this country.

Senator Sir John Carrick —Tell us why your Prime Minister dropped this proposal.

Senator GRIMES —I suggest to Senator Sir John Carrick that we should not debate this serious subject on that basis. We should look at what needs to be done-and no one denies that something needs to be done. The Prime Minister (Mr Hawke) announced that we remained firmly committed to the principle of an assets test, the principle of ensuring that we have a needs based retirement benefit system, excluding assets, only including income. Senator MacGibbon, who is trying to interject is, above all, the person in this place who defends privilege and those who have extremely high incomes. I will not bother to talk about his remarks. Of course, there has been considerable controversy and uncertainty. I have said that in this place before and the Prime Minister has said it. We would have preferred to have passed the legislation so that we could demonstrate to people that about 85 per cent of pensioners in the country would not be affected . But it was quite clear from statements by all of the Opposition parties that the legislation would not have been passed. So what we are doing-

Senator Walters —That is not what your Prime Minister said. He said it was a mistake.

Senator GRIMES —Senator Walters, of all people, should never act in this chamber as a defender of the underprivileged, the poor or low income earners. Her attitude and lifestyle make that offensive to the average person in the community.

Senator Walters —It is no use resorting to abuse. There is absolutely no use at all in that.

Senator GRIMES —I was responding to Senator Walters's abuse. We are setting up a panel. I earnestly ask honourable senators to wait and see who is appointed to that panel and to allow that group to look at the legislation, to look at the propositions which are brought up by various pensioner groups and various other groups in the community, and to consider its recommendations in a sane and sensible way, without all of this nonsense about harassing people. It is a serious problem. It is something that this community must face. It is something that governments have not faced until now. If we do not approach it in a sane and sensible way, with economic and social rationality, we will continue down the path we are following now. We will hear honourable senators on the other side of the House repeatedly talking about the high cost of welfare, the high cost to the taxpayer, and at the same time we will hear members of the community speaking for the disadvantaged groups bewailing the fact, quite justifiably, that the base rates of pension are too low, that disadvantaged people with children receiving pensions and benefits are receiving inadequate support, that people who are in private rental accommodation are receiving inadequate support. All of those things are true.

The only way we can correct those distortions in our community, the only way we can correct those inadequacies in income support in the community, is to look at the system that we have now and see whether we cannot have some rational change. To suggest that a serious attempt-which is continuing-to make up for those inadequacies is in some way aimed at harassing people, and to raise red herrings of the type raised by Senator Sir John Carrick about jewellery, is not assisting and will not assist rational debate in this area. I hope that in the next few months, as the panel looks at the matter and has the opportunity to listen to positive suggestions from the other side of the House-which I think is terribly important and which we have not had until now-and is able to look at it in a calm and rational way, the benefits will be felt by all of us, not only by pensioners and politicians but also, in particular, by the taxpayers of this country who must pay for the social security system. I ask people to look at it in that light and debate it in that light. It is all very well to impute all sorts of evil and horrible motives to me or the Government. I suggest the issue is far too important to be looked at in that way and I hope that in the future it will be looked at in a sensible way.