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Tuesday, 6 September 1983
Page: 381

Mr WILSON(4.17) —I support the speech made by my colleague the honourable member for Mackellar (Mr Carlton) in bringing to the attention of this House our concern at the continuing attacks by the Australian Labor Party Government on aged citizens of the Australian community, causing them alarm, distress and hardship. It is nonsense for the Minister for Health (Dr Blewett), to suggest that members of the Opposition have caused the distress and alarm amongst the aged community of Australia. The distress has arisen out of two announcements in principle by the Labor Government, one in the mini-Budget and the other in the Budget a few days ago.

I want to speak about the Government's decision to impose an assets test. It is my view that every Australian aged 65 and over should be entitled to a basic pension without an income test and without an assets test. In fact, if the honourable member recalls the last few sentences in his speech, he said that he wanted every Australian to benefit from a superannuation scheme whereby a basic 25 per cent of average weekly earnings was available to everyone. It seems to me to be a very strange way of implementing that promise, to try to squeeze the proportion of the aged population of Australia receiving a pension entitlement- between 85 per cent and 90 per cent-down to 70 per cent or less to save revenue. It is strange that on the one hand the Government is advocating a universal national superannuation scheme-pensions available to every Australian as a right -and on the ther hand is seeking to take away from Australian pensioners and those who will become pensioners in the years ahead the right that many Australians properly regard themselves as having earned by paying taxes during their earning years.

It is very strange that the imposition of an assets test should be brought in at this time, because the evidence is quite clear that assets tests and income tests distort people's normal saving and investment patterns and cause a change in their behaviour, to enable them to maximise their position. It is my strong belief that all people, including those approaching retirement and those who have retired, will do better for themselves and, in doing better for themselves, will do better for the Australian nation if they invest and save according to sensible criteria. But income tests and assets tests distort those normal responses to people's saving habits. As a result of the imposition of an assets test people will further change their patterns.

I wonder whether the Government will save the sort of money that it thinks it will save at the expense of the elderly and the frail in our community. I venture to suggest that the percentage take-up rate will vary little over the time ahead as a consequence of the reimposition of the assets test. But the cost burden will be even greater because more and more people will become increasingly dependent upon government and put pressure on governments, through the public sector, to pay higher and higher pensions to a higher and higher proportion of the aged population. A smaller proportion of the population will be encouraged to be self-reliant. That is what we should be doing-encouraging individual self-reliance over and above a basic and adequate minimum pension paid to all.

The introduction of a means test is a backward step. It is interesting to note the history of the assets test as it applies particularly to those over 70. There was a time when the assets-income test withdrew the pension at the rate of 100c in the dollar. Is the Labor Party going back to that? It nearly has; it is not far from it. The tapered means test was introduced by a Liberal government. That set the maximum withdrawal rate of pensions at 50c in the dollar. Then came the Whitlam Government, which, with a great fanfare of trumpets, said that it was going to abolish the means test. But like the Hawke Government and its promises, it failed to deliver. It did abolish the means test for the very old and made a pension available to everyone by virtue of age. But it said: 'As we have abolished the means test we must make pensions taxable because one day all pensions will be paid free of means test'. So they were made taxable and the Whitlam Government then broke its promise; it failed to abolish the means test, so that those who were receiving pensions subject to a means test were not only means tested but also taxed.

In the Labor Party's Budget there was not a word to show that, because pensions are now subject to an assets test and to an income test which has been reimposed for the over-70s, pensions are going to be paid free of tax. Oh, no, not a word of it! Senior people in our community are paying the most punitive tax rates in the land. They lose 50c for every dollar of income by virtue of the means or income test, and they lose another 15c in the dollar as a consequence of the impact of personal income tax at the standard rate. When the Minister for Health , who has taken part in this debate, introduces his Medicare arrangements and the withdrawal rate taper is put on top of the means test taper and the tax liability of pensioners with modest incomes, I wonder what the marginal rate of tax, the real rate of tax, imposed upon pensioners will be?

The Labor Government in this Budget has substantially increased the tax burden on pensioners. It has frightened many because, as my colleague has pointed out, large numbers of wage earners have saved through their working years to provide for themselves. They did not want a caravan-they knew that their wives, if widowed, could not manhandle or 'womanhandle', a caravan-so they bought a small beach house or holiday house which now, because of inflation, is worth $30,000 or $40,000. They receive no rent from it but now they will be penalised; they will lose their pensions. These people are greatly worried. I had brought to me the case of a migrant whose parents also migrated to Australia. They are in the category of the old old-90 years of age or something of that order. The son built a house for his parents. He owns the house; yet now, under the assets test proposed, that will be counted as an asset against him. Is it expected by the Labor Government that that son should charge his parents 10 per cent of the value of that property to maintain his retirement income? Surely not! What should happen is not the reimposition of an assets test but the abolition of the income test so that we can move to a situation in which every Australian, on reaching the age of 65, is entitled to a retirement pension. Then if there are people in special need we should focus attention on small categories of need whilst encouraging the great bulk of the Australian community to provide for themselves over and above that basic guaranteed minimum retirement pension that should be provided to them through the taxpayer.

One of the mistakes we often make when we examine the cost of social security is that we look at it in static terms. We forget that the taxes paid over the last ten years to pay for age pensions were paid by people who are today retired . They are entitled to reap the benefits now, in their retirement, of the effort they put into providing pensions for at least 85 per cent and in some instances 95 per cent. The Government's action in the Budget is a retrograde step. It is a vicious attack on the senior citizens of this country. It is an attack on those who are approaching retirement and who, because of Labor's approach to superannuation payments, to the pension for the over-70s and to the reimposition of the assets test, will now be totally discouraged from making provision for themselves at the very time when we should be encouraging more and more people to be self-reliant.

Mr DEPUTY SPEAKER (Hon. Les Johnson) —Order! The honourable member's time has expired.