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Tuesday, 29 May 1984
Page: 2034

Senator GIETZELT (Minister for Veterans' Affairs)(5.24) —The Government is being accused, criticised and chided by the Opposition on its failure to present a coherent social security policy and its endeavours to restrict welfare to those in genuine need. This is the umpteenth motion that has emanated from the Opposition. On not one occasion have its motions been positive ; they have all reacted to initiatives taken by this Government. We are accused of failing to present a policy dealing with social security, despite the fact that Labor has been in office for only 15 months. The conservative Liberal- National Party Government was in office for 99 months from 1975. In the post-War years a Labor Government has been in office for eight and a quarter years out of 39 years. It was not until 1976 that even the conservative Government moved on the assets test that had been in the legislation since 1908. So, from 1949 to 1976, under 24 years of Liberal conservative governments, no action was taken in respect of the assets test. Honourable senators should consider this statement:

The Minister for Veterans' Affairs . . . has warned of conflict between demands for tax cuts and middle class welfare.

. . . .

All welfare, whether in aged or repatriation areas, should be based on need, he said . . . I warned that, with big proportional growth in the number of aged expected, looking after Australia's aged would become even more expensive.

That was not the present Minister for Veterans' Affairs, Senator Gietzelt, but the then Minister for Veterans' Affairs, Senator Messner, being quoted in the Hobart Mercury of 22 February 1982. There is no response from Senator Walters to that statement. I wish to refer to what other Opposition members said when they were senior members of the previous Administration. I quote:

. . . there are very real problems in negotiating the marginal areas, where we have to try and ensure that the genuinely needy are helped and at the same time maintain incentives and initiatives and self-reliance . . . I shall be examining . . . that the money spent in this area is spent so as to ensure a dignified level of income support for all pensioners, while encouraging people to provide for themselves where they can.

Those were the remarks of Senator Chaney, who was then Minister for Social Security, to the Australian Pensioners Federation in 1981. He said further:

. . . I am concerned . . . that, since the change from the means test to the income test in 1976, there appears to have been a marked increase in the number of people, some with quite substantial amounts of money, who are contriving to make themselves eligible for the pension by participating in artificial income avoidance schemes and by placing significant sums in non-interest bearing accounts. Such practices restrict the Government's ability to provide assistance to those in genuine need.

Senator Chaney went on to say, in one of a dozen such statements:

It is a matter of having legislation which will catch the artificial and yet at the same time leave untouched the normal domestic arrangements of the great mass of pensioners who do not enter into such schemes.

Senator Chaney also stated:

As I have indicated to the Senate before, the need for this sort of legislation is simply to ensure that we can meet our objective to provide more adequately for those in the community who do not have sufficient to provide for themselves.

What was the position? Under the previous Government, social security payments and pensions dropped from 24.7 per cent of average weekly earnings in December 1975, when Labor was in office, to 22.6 per cent of average weekly earnings. One reason why that situation developed is the tremendous increase in the social welfare budget both in respect of veterans' affairs as it applies to service pensions and also as it applies to social security. My Department has supplied me with figures that show that the number of service pensioners, that is, veterans and dependants, is expected to increase from 212,000, which was the figure in 1979, to 503,000 in 1987, an increase of 137 per cent in eight years. Spending on service pensions is expected to increase even more dramatically; in current dollars, from $693m, as it was in the 1978-79 Budget, to $2,043m in 1986 -87, a real increase of 195 per cent or $1,450m in eight years.

So this Government took the step in its first Budget of establishing an assets test. It did not include the family home and it tried to have regard for the accumulation of wealth of some pensioners. It set out to achieve essential savings so that we could meet our political commitment to raise the pensions of basic needy pensioners to 25 per cent of average weekly earnings. It is anticipated that this commitment will cost the Government something in excess of $600m. The most that we anticipated under the original scheme was a saving of something in excess of $200m to $300m.

What did the Government then do? It appointed a widely-based panel. It set out to canvass the options available to it by appointing a representative group of citizens. The report of that group has not yet received the consideration of the Government. But in the public controversy since the first leaked document, the Government has received the support of the Business Council of Australia for a needs-based pensions system, as, indeed, it has from the Australian Council of Trade Unions. We have a means test in respect of income. Is someone suggesting that to have a means test in respect of assets is somehow breaching some decent principle? Of course it is not. If assets are capable of earning income they should be dealt with in this way. To the extent that that is not happening, our capacity to meet the requirements of the genuine needy is restricted.

Of course, 2.4 million people in Australia are receiving the basic pension. Three-quarters of a million pensioners who are living in rented premises are obviously disadvantaged when compared with those who live in their own home. How can we have a system under which we cannot raise the income and living standards of this basic group of people? It is said, without contradiction from those on the opposite side of the Senate, that some three million people in this country are living below the poverty line. It is our intention, therefore, to take the essential steps. Might I just remind the Senate that Mr Peacock, when challenging Mr Fraser for the leadership of the Liberal Party back in 1982, went on public record of saying that there would be a new direction for the Liberal Party. He said in respect of social services that it was 'a clear duty of government to protect and assist those in genuine need'. This speech preceded the one by Sir Phillip Lynch in Brisbane in which he referred to 'millionaire pensioners'. I have been criticised by the Opposition for repeating this statement. Mr Peacock said that claims on the public purse must be rigorously assessed 'on the criterion of meeting genuine social need'. Mr Howard has said the same. Senator Dame Margaret Guilfoyle has said the same. Senator Chaney has said the same. Sir Phillip Lynch has said the same. Senator Messner has said the same. The business community has said the same. Yet we have been accused of not having a coherent policy. Where are the policy proposals of the Opposition? Opposition members are contenting themselves with purely negative criticism of the Government itself.

The assets test introduced in the 1983-84 Budget did not have any concept of exempted family home. It sought to raise income and to divert funds from wealthy to needy pensioners. This Government persisted with it, knowing that there would be opposition from the pensioner community. But we did so on the basis that the savings from that measure would be used in meeting our political commitment to raise the pension to 25 per cent of average weekly earnings. That, of course, is still our objective. We are a compassionate government. We as a government are concerned to meet our commitments to those who are in genuine need. We are taking the difficult decisions and we should, therefore, have the support of the Opposition in this respect.

There is no such anomaly in the proposed test as the exemption of individual luxury items that were exempted in the first proposal. There was no proposal to include the family home. Yet the Opposition said that it would oppose what we had put forward. The new scheme does not exempt antiques, jewellery and other things which the Opposition said constituted a loophole. But the Opposition now says that it will oppose and reject the revised scheme if it is ever re-elected to office, despite the fact that it has not had an opportunity to consider the Government's proposals and it has not had the opportunity properly to read the report which is now known as the Gruen report. There are no anomalies in respect of jewellery, antiques, holiday homes, boats and all those other things in the proposed revised test which has been the subject of some public debate following the leaking of the document. The Opposition is still trying to make capital out of the fact that all pensioners will be treated equally irrespective of the form in which they hold their wealth or where they live. Before long, no doubt, the Opposition will start complaining about the invasion of privacy. So this is a classic case of being damned if one does and being damned if one does not.

There has been absolutely no attempt on the part of the Opposition to adopt an attitude of helping to overcome a clear problem that exists in this community. We have an aging population. Every country in the western world has a similar problem with respect to welfare payments. Opposition spokesmen still take a view which is creating confusion, as they did in the years in which they held office. They have set out deliberately to provoke a reaction from genuine people who believe that they are going to be affected by the proposals that are considered in the Gruen report before the Government has even had an opportunity to determine its attitude to that report.

In the first four days after the publication of the 1983-84 Budget document which encompassed these proposals the Department of Veterans' Affairs received some 1,844 complaints or requests for information over the telephone. Since the public debate began on the Gruen report there have been 212 such requests for information. This indicates that there has been something like an 89 per cent reduction in the number of complaints about the proposals which have not yet been determined by the Government itself. Yet the Opposition still attempts to create hysteria and to arouse emotions although the Government has not yet made a decision on the assets test proposals. It is conceded that we do have problems . For instance, the average price of a home in Sydney is $90,000. I am told by Senator Cook that the average price of a home in Perth is $47,000. So even if the various options are adopted by the Government-and that is still a matter yet to be determined-there is no way that any of those sort of people will be materially affected by any of the propositions that the Government is considering. In conclusion, I hope that eventually the Opposition will put forward a constructive attitude which can stand up to rational debate.

The DEPUTY PRESIDENT —Order! The Minister's time has expired.