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Wednesday, 24 June 2009
Page: 4127


Senator BOYCE (12:34 PM) —On behalf of the coalition, I welcome this excellent but belated increase in pension rates. I think we could safely say that we have had sufficient evidence through a number of the inquiries that the Senate Standing Committee on Community Affairs has been involved in that the costs for a single pensioner are not 50 per cent of the costs for a pensioner couple. There are all manner of costs such as rent and rates which are not a straight halving of what it costs a pensioner couple to survive. I certainly think that the increases in the single pensioner rate are long overdue. In fact, we in the coalition tried to get the government to see the sense of doing this in the middle of last year. The Senate accepted our changes but the House of Representatives of course rejected them.

As at December 2008 there were 2,070,300 recipients of the age pension, and 64 per cent of those people aged between 65 and 69 received a full or part age pension. This increase has been campaigned for long and hard and it has finally and belatedly arrived. The coalition is very pleased to see that this has happened. However, we do have some concerns about the legislation that is being put through, the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009. We were told by Ms Clare Martin from the Australian Council of Social Service, for instance, that the scheme now proposed is less equitable and more complex than it was before. So much for the use of the word ‘reform’ in terms of the pension—we get an increase but we get a mess. Ms Martin said:

What we have got now in terms of a social security system is four levels of payment.

We have a level of payment for the pensioners, who are getting the terrific increase of $32.50 a week. That is for the aged, carers, and disability support and veterans affairs recipients. They will be roughly on a level of about $330 a week, including the supplements that they get. But that leaves sole parents $47 behind, it leaves your average Newstart recipient $106 behind and it leaves those on youth allowance or Austudy $147 a week behind. So much for reform.

We are particularly concerned that sole parents have been left off this list of pensioners. It is the first time that the connection has been broken between pensions available to sole parents and pensions available to age pensioners. It is very concerning that perhaps this nexus will remain broken, that single parents are about to fall well behind. The National Welfare Rights Network has said:

This exclusion is perhaps the most significant assault on the payment conditions for sole parents in the last 35 years. NWRN was shocked at the decision to exclude sole parents and cannot see any justification for the government to sever the tie between the rates paid to age pensioners and those on parenting payments.

They point out that this snub undermines the financial security of hundreds of thousands of Australia’s poorest families, which include 400,000 sole parents and their 600,000 children. These people now must wait, as age pensioners had to wait, for the government to make their next move. But how long will they have to wait? It is not reasonable that the single parents, who are among the most vulnerable groups in our community and the ones who can most easily fall through the cracks into homelessness, are the ones who are being forced now to wait.

I would also like to mention briefly the government’s change to the pension age. This is supported pragmatically by the coalition. The pension age must increase simply because of the ageing of the community. There is no option on this. But the never-never scheme to start in 2017, completing the exercise by 2023, leaves the current Prime Minister and others well away from being ever called to account for how this pans out. We have had a number of comments from many working groups, including some unions, about the difficulties faced by people, particularly those who have done hard physical work all their life, needing to work for two more years until age 67. It was interesting to note during the inquiry that we conducted on this that we heard that half the people who go onto age pensions are coming from some other form of income support. So it is quite likely that people who have worked hard physically all their life are, by the time they get to 65, working part time; or they may be on workers comp; unfortunately, some of them might even be on disability support pension because of the way their bodies reacted to their very hard working life.

During the inquiry the community affairs committee conducted into this legislation we received one witness in person from the liquor and hospitality union and we received one submission from the ACTU, which consists of about 1½ pages. Admittedly this inquiry was called very quickly, but many of the groups, such as ACOSS, Uniting Care, National Seniors and Australian Independent Retirees, managed to put in substantial submissions setting out their case for how things should be improved in the areas of their concern. From the ACTU we received 1½ pages. It mentions the reality of the diversity of the workforce experience of Australian working men and women, meaning that many workers are unable to continue working until retirement age. I appreciate that there is a group that we certainly need to develop some flexibility for in this area, the people who have worked hard manually all their lives, but I have yet to see support in any meaningful way for that given the very minor submissions presented to the inquiry on this legislation by the ACTU and others.

I would also like to raise the question of the changes to the taper rate that were proposed in this legislation. As you may be aware, Madam Acting Deputy President Troeth, this legislation would increase the pension income test taper rate from 40c to 50c for every dollar of income earned over the threshold of $138 per fortnight for single pensioners and $240 per fortnight for pensioner couples. If you listened to the government, you would think that everything is hunky-dory because there is a grandfathering clause included in this, suggesting that people who currently are subject to the 40c taper rate will not be adversely affected and will be allowed to stay on that until they get to the situation of being better off under the 50c taper rate. The suggestion is that this might go on for years and years. However, when you look at the evidence given to the Senate Community Affairs Committee inquiry into this, it tells a different story. It points out that many people are on part pensions; that this will be indexed only according to CPI, not according to CPI and MTAWE, as other pensions and the pension supplements are, so that people will gradually fall behind; and that it does not take into account also the fact that people are moving on and off pensions—particularly part pensions, of course—at a fairly consistent rate. Because of investments, people continue to need to either top up their income with a part pension or, because their investments improve—

Debate interrupted.