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

Previous Fragment    Next Fragment
Thursday, 27 May 1993
Page: 1500

  Messages received from the House of Representatives acquainting the Senate that it had disagreed to the amendment made by the Senate to the Bills, for the reasons shown in an annexed schedule.

  Ordered that consideration of the messages in Committee of the Whole proceed forthwith.

  Reasons of the House of Representatives for disagreeing to the amendment of the Senate to the Social Security Amendment Bill 1993—

(1)It excludes shares and other listed securities from the definition of investment product in the Social Security Act and thereby prevents the equitable assessment of the ongoing gains made on shares and other investments listed on the Stock Exchange compared with indirect investments in shares through equity trusts.

(2)The amendment will reduce the equity of the social security income test. The assessment of ongoing capital gains on shares ensures that equity of the social security social security system is enhanced. Pensioners with the same means and the same financial resources available to them should have the same amount of income assessed for social security purposes. People who invest in shares should not be treated more beneficially than those who invest in equity trusts or other managed investments, and they should not be treated more beneficially than those pensioners who invest in income generating investments such as bank accounts.

(3)The amendment would result in the expenditure of approximately $60 million within the Social Security portfolio in a full year and a further $20 million for a full year within the Veterans' Affairs portfolio on a group of clients with substantial financial resources.

(4)There is no reason why shares should be excluded and given privileged treatment. It is a principle of the social security income test that ongoing gains are treated as income for all investments that can be readily realised and utilised by pensioners for their support. Only those investments which are not readily realisable, such as real estate and shares held in private companies, are currently exempt. Listed shares can be sold in small or large bundles at any time allowing gains on listed shares to be readily utilised by a pensioner.

  Reasons of the House of Representatives for disagreeing to the amendment of the Senate to the Veterans' Affairs Legislation Amendment Bill 1993—

(1)It excludes shares and other listed securities from the definition of investment product in the Veterans' Entitlements Act and thereby prevents the equitable assessment of the ongoing gains made on shares and other investments listed on the Stock Exchange compared with indirect investments in shares through equity trusts.

(2)The amendment will reduce the equity of the service pension income test. The assessment of ongoing capital gains on shares ensures that equity of the service pension income test is enhanced. Pensioners with the same means and the same financial resources available to them should have the same amount of income assessed for service pension purposes. People who invest in shares should not be treated more beneficially than those who invest in equity trusts or other managed investments, and they should not be treated more beneficially than those pensioners who invest in income generating investments such as bank accounts.

(3)The amendment would result in the expenditure of approximately $20 million in a full year on a group of clients who generally have substantial financial resources.

(4)There is no reason why shares should be excluded and given privileged treatment. It is a principle of the income test that ongoing gains are treated as income for all investments that can be readily realised and utilised by pensioners for their support. Only those investments which are not readily realisable, such as real estate and shares held in private companies should be exempt. Listed shares can be sold in small or large bundles at any time allowing gains on listed shares to be readily utilised by a pensioner.