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Thursday, 21 September 1972
Page: 1789

Mr LLOYD (Murray) - This Bill is a major piece of social welfare legislation. It is one of several social welfare measures that are in the process of being passed or have been passed by this Parliament. Measures relating to aged persons homes and hostels have been introduced. Those relating to nursing care and repatriation are still to come. Put together these measures provide outstanding and comprehensive social welfare legislation and they make a broad attack on social welfare problems in this country. It is an indication to the people of Australia that this Government is concerned about social welfare problems and shows them where this Government stands. The Government has thrown out a major challenge to the Labor Party in the field of social welfare. With an election approaching it would have been interesting and valuable not only to this Parliament but also to the people of Australia to be told the exact' policy of the Labor Party on social welfare. If the Leader of the Opposition (Mr Whitlam), the honourable member for Oxley (Mr Hayden) who is the shadow Minister for Social Services, and the honourable member for Melbourne Ports (Mr Crean) who is the shadow Treasurer, got together and coordinated their policies it would be an advantage to the people of Australia. They would have a chance to learn the real policy of the Labor Party; this is not possible from a series of contradictory and uncoordinated statements.

We were told that over a period of 6 years a Labor government would abolish the means test and introduce a national superannuation scheme. Overnight the period was reduced to 3 years, after the Budget was introduced. I think the people of Australia would be interested to learn whether that is the personal opinion of the Leader of the Opposition, as was the case with revaluation. Has Caucus agreed to the change from 6 years to 3 years? Where does that leave the national superannuation scheme? Originally it was to be introduced over a 6-year period. I listened today to the honourable member for Oxley and it seems that the closest we can get to the Labor Party policy is that if it was in office it would hold an inquiry into the possibility of establishing a national superannuation scheme.

It has also been said that the Labor Party would bring about an immediate increase of 25 per cent in the base pension rate. The Leader of the Opposition has also previously promised $100m immediate social welfare advance. The combined cost of those 2 promises is about $220m. That is a considerable increase on the expenditure that is proposed by the Government at the present time. According to the newspapers of last week, if a Labor government came to power there would be no increase in taxation. This aspect of Labor's policy involves the expenditure of a further $220m, and does not even include the expenditure of the revenue from the 1.35 per cent additional taxation which the Labor Party claims would be necessary to implement its national health scheme. That is an interesting contradiction of the statement of the alternative Prime Minister that Labor would not increase taxation and of the remarks made by the honourable member for Oxley (Mr Hayden) who evidently believes that to phase in over 6 years Labor's superannuation and abolition of the means test proposals would require a 2.73 per cent increase in taxation. If these proposals are now to be implemented within 3 years it could mean, on Labor's own reckoning, an increase in taxation of approximately 5 per cent.

There also are some interesting contradictions in statements made by leading spokesmen for the Labor Party on the question of a national superannuation scheme and tax deductibility on life insurance premiums. It has been implied that if a national superannuation scheme were introduced by a Labor government life insurance premiums would no longer be tax deductible. This is rather interesting in the light of the fact that the Leader of the Opposition a few weeks ago stated that he would channel the investments of insurance companies in Australia into protecting Australian owned companies again foreign takeovers. If life insurance premiums are no longer to be tax deductible, I do not think there will be too much insurance money floating around to prevent these foreign takeovers. These interesting contradictions and unco-ordinated statements make a mockery of the claim made by the honourable member for Oxley in regard to the Minister's credibility. If anybody's credibility is at stake on this issue, it is that of the shadow Minister for Social Services. The honourable member for Oxley spoke about on-the-spot decisions. I think the best example one could bring to mind of an on-the-spot decision is the overnight decision of the Leader of the Opposition to reduce from 6 years to 3 years the period in which the means test would be abolished.

Opposition speakers also have criticised what they consider to be an unfair relationship between the class B widow's pension and the age pension, as if this was something that was introduced by the present Government. I remind honourable members opposite that the Labor Government in 1945 introduced the differential rate between the class B widow's pension and the age pensions. At that time the class B widow's pension represented 83 per cent of the age pension. When Labor was removed from office at the end of 1949, the maximum rates for the class B widow's pension and the age pension were $3.70 and $4.25 per week respectively. This meant that the class B widow's pension represented 87 per cent of the age pension. With the implementation of this legislation, the position very soon will be that the class B widow's pension rate will represent 86 per cent of the age pension rate, and that is not taking into consideration the supplementary assistance. If the supplementary assistance is added to this rate, as it should be, the class B widow's pension rate will be increased to more than 88 per cent of the age pension rate. Obviously this is higher than it was under the Labor Government! So much for the point as to who introduced this differential between these 2 pensions.

I return now to the positive policies of the Government which we are studying under this Bill. I congratulate the Minister for Social Services on his vision, on his untiring work in relation to what must be the greatest range of social services legislation to be introduced into this House in one brief period of time and on the detail into which he goes on this subject. We saw a good example of this just yesterday morning in the pamphlets that are being produced in a whole series of languages so that everybody in Australia will know what his entitlements are under the new social services legislation. There are too many details covered by the legislation to refer to all of them. There is no doubt that the highlights are the major increase in the base rate of pension and the extension of the eligibility provisions so that a pensioner's wife no longer is debarred, through age, from obtaining the married age pension or the invalid pension, as she was in the past.

Rent assistance has been doubled. Although I think this is a very good move, I agree with those who are critical of the fact that as yet we have not seen our way clear to provide rates assistance. I know of one State that does provide this assistance; perhaps there are others. Not providing this assistance creates anomalies for people who have worked hard, but who are still paying off their own home and paying rates at the same time. They are being debarred from receiving assistance while other people who perhaps are less worthy are obtaining rent assistance. However, the legislation indicates the Government's concern that those who are in the greatest need should receive the greatest assistance and that this assistance is being increased at a faster rate than the rate at which the cost of living is increasing.

This legislation heralds the beginning of the end of the means test. In fact, it goes a good way towards achieving this objective. I congratulate the Government on this very important milestone. The means test is to be phased out for people over 65 years of age. Already, under the Bill before us the amount that one oan earn in income or have in property is to be doubled before any limitations under the taper, are imposed. This is very welcome news. Under any means test, whether it be a social services means test or an education means test, there are so many anomalies that much injustice is done. People of modest means suffer because of the arbitrary cut-off points in relation to the amount of work that they can do and the amount of income that they can earn when they are anxious to help themselves and remain as independent and as useful as possible.

In rural areas the means test presents special but very real problems. The 2 groups of people who suffer are the farmers and the small businessmen. Under the means as assessed property component of the tapered means test, there is a notional 10 per cent return on property. Quite often the Valuer-General in a particular State will set the value of the property at an artificially high level in relation to the price for which it could be sold. Certainly, what the vast majority of the farming or country town business people could ever hope to obtain as a return on their capital is far less than 10 per cent. This brings with it several problems. These small town business people cannot sell their property because nobody wants to buy such a business. They have this artificially high valuation placed on their property by the Valuer-General; yet they are debarred from obtaining any assistance in the form of the age pension.

The farming people have a real problem as regards the transfer of the family farm from one generation to the next. For a period of time 2 generations are trying to earn a living from the farm, and the hope is that the older generation will retire into the town and become eligible for some form of pension assistance. But, because of this very high value that has been placed on the property and because the cost price squeeze has reduced the profitability of the property, the farm does not provide a living income for 2 generations. Yet the older generation is debarred from receiving any pension assistance. Earlier this afternoon I read the second reading speech made by the then Minister for Social Services, Hon. Hugh Roberton, in 1960, when the merged means test was introduced. There is no doubt that the merged means test - in the meantime the tapered means test has been introduced - was a vast improvement on the situation that applied previously. Once again the present Government is to be congratulated for that.

But we still have this problem with property in relation to the means test. Perhaps this is a little carping because, after all, we have the assurance that the means test will be completely obliterated within the next 2 to 3 years. New Zealand has set an interesting example in this regard. It has cut out the property component of the means test for people between 60 and 65 years of age, and only the income component applies.. Of course, once people reach 65 years of age in New Zealand they have an income tax tested superannuation rather than a means tested age pension. I presume that that is what we will have here. We will cut out all forms of means tests and rely upon income tax, which to me is the fairest and best way to test anything, whether it is in respect of education, social services or anything else in this community. I am confident that the present Minister for Social Services will preside, as T believe he rightly should, over the complete abolition of the means test in Australia. The stage which we have reached with this legislation is a tremendous leap forward to that end. Anything that I have said about problems with the means test in relation to property is not meant to detract from that tremendous leap forward.

The amendment that is before us is delightfully vague. I think that that is the best expression one could use. Probably there is every reason why it should be delightfully vague for, as I pointed out earlier, it could not provide detailed firm policy of the Opposition's attitudes to social services because the Opposition does not have one. It has a delightful collection of contradictory and unco-ordinated statements. I have very much pleasure in rejecting the amendment, supporting the Bill and congratulating the Minister and the Government.

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