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Thursday, 6 October 1983
Page: 1433

Mr CADMAN(11.53) —I wish to draw attention during this estimates debate to three of the most damaging and incredible decisions made by any government in regard to raising taxes which affect substantial numbers of people within our community. I deal first of all with the proposed assets test for pensioners. The proposal to tax pensioners is completely selective and unfair. The Government's proposal will allow those people with large homes, paintings, antiques, boats, cars and jewellery to continue to be eligible for a pension. Those who do not have those assets but assets of a different type will be seriously disadvantaged. They have expressed their concern about this matter and have rejected these proposals in recent public meetings which the Minister for Social Security (Senator Grimes) has had to face. He is starting to realise, I believe, the incredible depth of feeling on the part of these people against, and the damage that has been done by, the assets test proposals.

Mr Hodgman —He got a thrashing in Sydney.

Mr CADMAN —He did indeed get a thrashing in Sydney, and justifiably so. I do not know any government can claim to stand for the well-being of people in their retirement and devise such a damaging, all-embracing proposal. I believe the Australian Labor Party, through this proposal, has lost touch with real retirees who have completed their working lives in Australia. Having reached the end of their working lives, they retire and wish to enjoy the benefits of their hard work and their own thrift. Many of them have made investments in all forms of assets which will now be valued. The battler from the western suburbs of Sydney, early in his working life, put aside money for land at, say, The Entrance or on the north coast.

Mr Robert Brown —You do not know where the battlers are.

Mr CADMAN —I see that I can generate a response from Government members. They know how damaging this assets test is. They have been getting letters and representations from pensioner groups. They realise that this proposal has to be wiped if they are to survive in government. That is how critical this decision has been. How can the Government justify comparing holiday homes and large homes at Vaucluse? How can Government members say in honesty that they stand for the benefits of those who retire and for the benefits of pensioners? They cannot justify this decision. The Treasurer (Mr Keating) and the Minister for Social Security are finding just how strong are the feelings of the battler and of the genuine Australian who has worked hard and planned his retirement and who suddenly finds most of those benefits whipped away by an unfeeling government, by a silvertail Treasurer who does not understand the position of the average retiree in Australia. He grew up in that environment and has turned his back on the very people who elected Labor to government-the grass roots of the Australian Labor Party and the Australian community. What a dreadful thing it is to see a man diverted from the high ideals which the Labor Party supposedly stands for and then, in his first Budget, turn his back on the very people who put the Australian Labor Party into office. I think it is the most damaging and incredible decision ever made by an Australian government.

The next matter I would like to deal with is related to this; that is, the tax on lump sum superannuation payments. This is another proposal which will act in conjunction with the proposal I have just mentioned, the assets test. On the one hand, the Government will tax those people who have built up assets over many years and, on the other hand, it will tax those people who have saved in a different form. What has it got against people who are retiring? Why does it hate pensioners and retirees in Australia? It is putting down, attacking and vilifying the very people who try to help themselves. Leaving aside the gross anomaly in the lump sum tax proposal for the defence services, the combined effect of the Government's decisions on the assets test and the tax on lump sum superannuation will be to discourage people from saving and preparing for retirement, to discourage thrift and to discourage genuine efforts made through a working life. The Australian community will gradually adjust their views in this way: 'We need not look after ourselves. We will depend on the Government. We will fritter away our funds. We will not conserve our funds. We will not work hard. We will not set aside funds and forgo income for benefit at a later date'. That is what superannuation is. They will say: 'We will not prepare for our own future by building up assets which we can enjoy and perhaps pass on to our families. The Government will look after us'. They will sit back. So, instead of 40 per cent of the community being superannuated, that figure will be whittled away so that more and more people will be dependent on government expenditure.

First of all, on the lump sum proposals, the Treasurer said: 'We have to stop double dipping'. He did that effectively with the assets test, but he is sticking with the lump sum tax. Then he used the argument of the $2,000m subsidy to superannuitants provided by the Australian community. Let us look at that. To encourage 40 per cent of our community to invest in superannuation schemes costs $2,000m. We meet the total bill of $6,000m for the remaining 60 per cent. It seems to me that a half price approach to encourage people to prepare for their retirement does not involve a subsidy at all. It is a fallacious argument. The Government should be genuinely looking at retirees and saying: 'How can we encourage people to do the very things they have been doing-preparing for their own retirement by investing in assets, bonds, building societies and superannuation funds?' That has to start now. It should be started by this Government which calls itself a reforming government. Actually it is a penalising government. The Treasurer does not understand; the Government does not understand.

What is the Government's objective? It has removed completely the incentive which people need to prepare for their retirement. It has removed the incentive for superannuitants. It is all right to talk about the airline pilots. I inform the Committee that every outside member of staff of the Hawkesbury Shire Council , which is in my electorate, has signed a petition against these proposals. They are people on ordinary wages preparing for their retirement. They object thoroughly to the Government's approach to lump sum taxes. If the Treasurer wishes, I will produce the petition. I have it with me. The Government has succeeded in panicking every pensioner but its crass, crude and unfeeling decision on the taxing of assets.

I would like to mention briefly a third decision which I think is incredibly bad; that is, the prescribed payments tax and the way in which it has been implemented. I had a few words to say about the tax yesterday. It is a tax on the capital of Australia's most important and hard-working sector-contractors and those who are trying to survive in their own, generally small business. In the recent adjustments that the Government has made there is no provision for paying back that working capital if there is an overcharge or if a business turns bad. The Government will be taxing these people as employees, and they are also paying provisional tax. The tax will be paid whether or not there is a loss on a particular job or the year's trading is bad. The exemption provisions are far too narrow, even with the current adjustments.

All in all, this Government, by various techniques, has attacked those people who are extremely important in our community and who comprise a very large proportion of the community. It has attacked retirees and their benefits. It has attacked pensioners and their assets. It has also attacked the people who provide the wealth and the capacity to meet the bills that the Government is running up. In this process it will create unemployment and dissatisfaction and eventually will lose government.

The DEPUTY CHAIRMAN (Mrs Darling) —Order! The honourable member's time has expired.