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Thursday, 13 October 1983
Page: 1713

Mr WILSON(11.23) —In taking part in this debate I should like in the first instance also to deal with the Australian Labor Party's proposal to introduce an assets test because in making that announcement the Labor Party broke yet another promise. In the lead-up to the election campaign the Prime Minister (Mr Hawke) promised that his Government would not 'take money out of pensioners' cheques'. By reintroducing the assets test his Government is doing just that and as a result is causing anxiety and concern amongst many aged pensioners. That concern has also been increased for a significant group of the aged population-those over 70-because of the reintroduction of an incomes test which is to be converted into an assets test for persons 70 years and over. It needs to be pointed out that a lot of people have planned their retirements on the basis of there being no income test or assets test for a basic pension for people over 70. Who abolished the means test? It was a Labor Government. The Whitlam Government abolished the means test for people over 75 and then reduced that age so that people over 70 were entitled to a means test-free pension.

How consistent is the reintroduction of an assets test or the reimposition of a means test of one sort or another on pensioners over 70 with the Labor Party's professed claim that it will one day introduce a national superannuation scheme? It is mostly those with modest savings who will be penalised because after paying their taxes they saved what they could for their retirement. It is ludicrous for Labor spokesmen to justify their actions by claiming that this proposal is aimed at the very wealthy. The very wealthy comprise a very small proportion of those who will lose or will have money taken out of their pension cheques as a consequence of Labor's action. Although the pensions of all people may not be affected, all pensioners will be required to provide details of their belongings by supplying inventories of their assets to the Department of Social Security.

If one wants to understand what this means to old people one has to see reports of the way in which the over 70s are affected. Those people are receiving letters from the Department of Social Security calling upon them to provide details of their income and their assets in a way in which they previously did not have to do. In many instances officers of the Department of Social Security call on elderly people and ask them to provide details not only of their income but also their assets. In many circumstances the very people who are required to provide this information could simply say to those officers: 'Knowing my assets and my income, I know that I will no longer, because of the re-introduction of an income test for pensioners over 70, be entitled to a pension, so therefore I do not have to provide you with any information'. But no, that is not the approach. There is an invasion into the private affairs of many pensioners who are now not entitled to pensions and who should not in those circumstances be required to give details to departmental officers.

The Labor Party, when it abolished the means test for those over 70, introduced taxation on pensions and justified that introduction on the basis that the means test on all pensions was to be phased out. What will happen when the assets test is reimposed? Is there any suggestion that, as a consequence of that and as a consequence of the reintroduction of the pension for the over-70s, pensions will no longer be taxed? To be consistent, pensioners should not be subject to tax on their pension income. Under Labor's recent Budget proposals pensions will still be taxable, even though the means test is being reimposed. As a result, pensioners whose pensions rise by, say, $100 a year will lose $50 of their pension because of the means test and will pay $15 tax on the balance. As a consequence, they will lose 65c out of every dollar of additional income.

This is a very high effective rate of tax and one which takes away the reward for effort and destroys the incentive for self-reliance. Until Labor came to office our age pension scheme provided retirement incomes to nine out of ten people aged 65 and over. Having held out the promise of a national superannuation scheme, which presumably would provide pensions and universal income protection for all people, the Labor Government, by the reintroduction of the means test, played a mean trick on those who have retired or who are approaching retirement. I wonder whether it is practical to reimpose an assets test. It is one thing to say that pensions are available in the first instance on the basis of people satisfying a test, but it is another thing, having given pensions to hundreds and thousands of ordinary, average Australians who have modest savings, to seek to reimpose that test.

I am of the view, and have been throughout my political career, that every Australian reaching the age of 65 should as of right be entitled to a retirement income. On that basis we could build a sensible and rational national superannuation scheme as, on that basis, people could plan and could save to supplement the basic pension that would be available to all. As I have pointed out, it seems to me totally inconsistent of the Labor Party, in espousing the introduction of a national superannuation scheme, to step back from the very foundation upon which a sensible national superannuation scheme could be built.

I turn to two other matters with which I will deal very briefly. In our social security system, we currently assess entitlement on the basis of the income and/ or assets of both husband and wife. I think the time is coming when we should change that approach and begin to look at the needs of individuals and of those individuals as they are affected by the assets and income of the household or housekeeping unit of which those individuals are members. I think the time has come when we need, for example, to look at converting the spouse rebate into a cash allowance payable to the mother at home or the homemaker. In some instances it is not the mother who is at home; it is the unemployed husband of an employed wife. All men and women need a degree of personal economic independence. It may not be possible in the first instance to provide everyone with an income equal to the married rate of unemployment benefit or pension. But at least we should make a start by providing to every adult a level of income that gives to that adult, in whatever household he or she lives, a degree of economic independence. I believe that could be achieved by converting the spouse rebate into a cash allowance.

The same is true for young people. I think that 16-year-olds and 17-year-olds need some degree of economic independence. I find it very strange that the Labor Government should be promoting in its education policy participation in an equity program to get young students to remain at school whilst, at the same time, it increases the unemployment benefit payable to that age group without providing those who stay at school or their families with additional income support. I think we need to look at the young, the 16-year-olds, and 17-year- olds, and apply common income entitlements to them all. I hope that, over the months ahead, the Government will look at the possibility of providing youth allowances to 16-year-olds and 17-year-olds.