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Tuesday, 9 September 1958

Mr WILSON (Sturt) .- The report of the Director-General of Social Services indicates the tremendous improvement that has taken place in the provision of social services since this Government has been in office. In 1949, the total expenditure on age and invalid pensions was £41,000,000. For the year just concluded, it was £121,000,000, just three times as much as the 1949 figure. The total expenditure on all social services in 1949 was £74,000,000. This year, it will be £202,000,000, again three times more than the 1949 figure.

The report also discloses that social services have kept pace with the rising national income, for in all years while this Government has been in office, expenditure on social services has represented approximately 4 per cent, of our total national income. It also discloses that pensions and other social service benefits have kept pace with national productivity, for, at all times during that same period, expenditure on these items has represented approximately 3 per cent, of our gross national product. The report also discloses that approximately 14 per cent, of the Commonwealth's revenue has been spent on social services in all years during that period. In view of those circumstances, we can justly say that social services have kept pace with the rising prosperity of Australia.

Further, during the last nine years, the aged and the sick have been granted other benefits such as free life-saving drugs, free medical attention, free medicine and the tremendous benefits provided under the Aged Persons' Homes Act to which previous speakers have referred.

This year, the Government is faced with a cash deficit. That being so, any increases in social service benefits must be paid for out of borrowed money. Notwithstanding that fact, the Government was determined to remove hardship where it could, with the result that, for the first time in the history of aged and invalid pensions, it has introduced a new principle. It has now introduced the principle of ascertaining where hardship exists and then taking such steps as may be necessary to remove that hardship.

The means test for pensions was first introduced in about 1909, and at that time it was treated as a measure of need. The means test has always been regarded as a measure of need since then, but it is now no longer a satisfactory measure in that it does not now measure real need. Honorable members have to look only at two cases under the present social service legislation to see how far short the means test falls as an accurate measurement of need. Under the present legislation, a married couple are entitled to receive £7 a week in superannuation payments and £8 15s. in pension payments, making a total income of £15 15s. a week, or approximately £2 more than the basic wage. At the other end of the scale is the widow in receipt of the base pension of £4 7s. 6d. a week, paying, say, £2 a week in rent, and struggling to live on the remaining £2 7s. 6d. In the first case, obviously it cannot be said that any real need exists, but in the second case the need is very great.

This year the Government endeavoured to arrive at a more accurate measurement of need. An examination was made in Melbourne of a representative number of persons in receipt of the age pension. It was found that 44 per cent, of those people owned their own homes and that 56 per cent, had to pay rent or board. Of the total number, 40.4 per cent, were single and paid rent and 15.3 per cent, were married and paid rent. It was obvious, following an examination of those cases, that the main hardship was suffered by the single people who had to pay rent. The Government this year found that the maximum additional sum that it could provide, having regard to the deficit for which it was budgeting, was approximately £5,000,000. If this £5,000,000 were to be used to increase the base pension rate, the increase would be approximately only 3s. a week. That would do virtually nothing to relieve the hardship suffered by single people, widows and widowers who have to pay rent. Therefore, the Government has decided that the £5,000,000 shall be used to assist those most in need, and those most in need are the single people, widows and widowers who pay rent.

So a special hardship payment of 10s. a week is to be made in a case where only one pension is coming into a home and where the pensioner has to pay rent and receives no income by way of superannuation or wages to supplement his pension. I feel that the Government is to be heartily congratulated for getting away from a cutanddried system which, as I have pointed out, does not really measure need. This special provision will get very much nearer to meeting need than anything else that has been in operation in this country for the last twenty years. I am sure that, with the experience gained as a result of this departure from the old system in the field of social services, the Government will be able to improve the system further as time goes on in such a way as to meet the needs of the smaller number of people who own their own homes but have to pay heavy rates and taxes and, in some cases, high interest rates on mortgages. It is only by practical experience that it is possible to find out where hardship actually exists. No cut-and-dried rule can be used. This departure from previous standards will provide the Department of Social Services with a very good means of ascertaining where hardship still exists after the reform has been implemented.

I was very pleased to hear the honorable member for Port Adelaide (Mr. Thompson), speaking on behalf of the Labour party, congratulate the Government upon this reform, because he knows more about social services than do all the rest of the members of the Labour party put together. Speaking about this proposed payment, the honorable member for Port Adelaide said -

It is a great compliment to the Government that an honorable member of the calibre of the honorable member for Port Adelaide should give such generous praise. It is not often we expect or receive praise from members of the Labour party.

The second reform that is to be introduced consequent upon the Budget has relation to the liberalization of the means test. As I mentioned earlier, the means test has failed completely to fulfil the purpose for which it was designed, namely, to be a measure of need. Although I have advocated, and will continue to advocate, the complete abolition of the means test, it is pleasing to me to note that the Government has, almost every year during its term of office, made some substantial and worthwhile liberalization of the means test. In 1949 a person was not eligible for a pension if he owned property valued at £750. Under the present proposals, a single person can own property to the value of £2,250, and a married couple can have property to the value of £4,500, in addition to a home, furniture and motor car. Although the Government has not totally abolished the means test, it has to a large extent removed the penalty on thrift. There are one or two other reforms I propose to suggest to the Government with a view to removing the penalty on thrift, which is so damaging to the whole economy of the country, but at the same time I wish to compliment the Government on the extent to which it has liberalized the means test. Nowadays a married couple are entitled to a partpension, provided their combined capital does not exceed £4,500.

I hope that the people who will become entitled to these benefits will lodge their applications quickly. If they do not lodge them before the passing of the act, they may miss receiving a portion of the benefits, because I imagine that the benefits will be paid from the date of the lodgment of a claim or from the date of the passing of the act, whichever is the later.

It is interesting to note in the report of the Director-General of Social Services that 48 per cent, of aged people are now in receipt of a pension, and that 67.6 per cent, of those people are women and 32.4 per cent, are men.

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