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Wednesday, 30 November 1983
Page: 3068

Mr WILSON(4.01) —The Opposition today has drawn to the attention of the House for public debate the following matter of public importance:

The Government's attack on the thrift of the aged in the imposition or the proposed imposition of its assets test.

The honourable member who has just resumed her seat argued that the reintroduction of an assets test was a progressive step. It is not progressive, it is regressive. It is a backward step which attacks not only the affluent but also, as I will develop in a moment, the poor. What has the Government done to assist the poor? It has done nothing.

Mrs Darling —I raise a point of order, Mr Deputy Speaker. Firstly, I would like the honourable member for Sturt to refer to me by name, as the honourable member for Lilley, which is provided for in the Standing Orders. Also, he was quite incorrect in saying that I said that just the assets test was a progressive test . I said that the assets test, in conjunction with a national superannuation scheme, was progressive.

Mr DEPUTY SPEAKER —There is no point of order.

Mr WILSON —Mr Deputy Speaker, where is the national superannuation scheme? Was it contemporaneously introduced? No, it was not. Whenever the leading spokesmen of the Australian Labor Party refer to the national superannuation scheme they talk about putting it off for some future government at some time in the far distant future, while in the meantime they seek to penalise all those who endeavour to provide for their retirement by postponing expenditure during their lifetime. Whilst they do that, the imposition of the assets test will make thousands of pensioners change their patterns of behaviour. It will make them dispose of their assets by unwanted overseas trips. It will make them spend during their working lives in order that when they reach retirement they will qualify for an age pension. Where is this well developed, long planned national superannuation scheme? There has not been a word of it. Reference was made by the honourable member for Lilley (Mrs Darling) to the report of the Hancock National Superannuation Committee of Inquiry. The Labor Party has no clear policy of income security for those who are dependent because they are aged. Honourable members opposite talk about a national superannuation scheme and imply that imposing the means test and the assets test will make it easier to introduce a national superannuation scheme. I ask: Will the national superannuation scheme be universal? Will it cover every person who is aged? When it is introduced, will it be available to every person at a level of income that will enable him to take advantage of it or will it take 40 years to be phased in because the Government will want people to make a contribution to it now and in the future?

Let me look at the taxation system that we have had operating in this country for the last 30 years and the way in which we have funded retirement incomes. We have had a pay-as-you-go superannuation scheme that covered 85 per cent of the Australian population. The Labor Party is trying to reduce the cover of that superannuation scheme. It is strange that honourable members opposite talk about Medicare and wanting universal cover, and yet when it comes to retirement income they want to put a wealth tax and an income tax on the aged. The imposition of an assets test is no different from the imposition of a wealth tax. Honourable members opposite need only to ask their own Minister for Social Security ( Senator Grimes) whether he holds this view. In recent days he has published an article which talks of the relationship between income tax, tax policies and the assets test. He said:

A fallacy common among critics of the welfare system is that any payments flowing otherwise than to the 'truly needy' are somehow wasted, or at least inefficient. But what really matters, given the overall objectives of helping some people and having others pay, is not the gross flows to and forth which comprise the tax-transfer system but rather the net result of those flows.

The honourable member for Lilley has failed to identify or take into account the effect of the net flow that this assets test will cause. More, rather than fewer , people will be dependent upon the assets-tested pension because more people will reduce their level of assets and their degree of self-reliance. I shall quote again the Minister for Social Security:

Those who argue that an assets test is necessary to properly assess need should consider the implications of that for the positive tax structure. Clearly assessment of 'need' is the other side of assessing ability to pay tax; to be consistent, those who argue for a pensions assets test should also argue for the personal income tax to be supplemented by a substantial tax on personal assets . . .

Here we have exposed what the Minister for Social Security has in mind. The first step he is taking is to impose a wealth tax on the aged, the dependants, the people who are not in the work force.

Mr O'Neil —Mr Deputy Speaker, I take a point of order. I point out to the honourable member for Sturt that he has frightened one old gentleman--

Mr WILSON —Mr Speaker, this is outrageous! He does not have the opportunity to point out such matters while I am in the middle of my speech.

Mr DEPUTY SPEAKER —Order! The honourable member will resume his seat.

Mr WILSON —Will you protect me, Mr Deputy Speaker?

Mr DEPUTY SPEAKER —I will try to do so if the honourable member remains in his seat. What is the point of order of the honourable member for Grey?

Mr O'Neil —My point of order is that the honourable member for Sturt has frightened one old pensioner, Frank O'Keefe, out of the chamber.

Mr DEPUTY SPEAKER —Order! There is no point of order.

Mr WILSON —Let me deal with our present tax system and the cost of meeting age pensions, including Service pensions, for those who qualify. The proportion of tax that goes towards retirement incomes is quite substantial. In the current year, 1983-84, the cost of the existing pension scheme for people of pension age is $6.6 billion. If there were universal eligibility the cost would be $7.4 billion. Dealing with the cost of the current scheme, if it were assumed to be taken as a flat rate of tax within the present rate structure so that it came out of the 30c in the dollar of taxable income above the threshold that applies to everyone, the tax that would be payable-8.7c out of every 30c in the dollar- would go towards providing the community's retirement income. If the scheme were to be universal, 9.8c in the dollar of personal income tax for those on the 30c rate would be payable to fund universal age pensions. That would be a very good foundation for a national superannuation scheme available universally to everyone.

Honourable members opposite fail to recognise that there is an interrelationship between those who pay tax while they are working and those who receive the benefits of tax when they reach retirement. The Australian people believe and I believe that, because they pay their taxes, they are entitled when they reach retirement to a universal pension, a flat rate pension, as a right. Honourable members opposite talked about the Hancock report. They should look at its minority report. It recommended a universal flat rate pension for everyone. It also recommended that individuals, through employment and in other ways, should be encouraged to provide income on top of the flat rate pension. That could be funded today simply by nominating, as if it were a levy, 9.8c out of the 30c in the dollar that people pay in tax. If one wanted to make that tax levy progressive, the rates for a universal scheme would be 9c in the dollar for those on the 30c rate, 13.7c for those on the 46c rate and 17.9c for those on the 60c rate. The Labor Party is destroying its own capacity to help the poor by distorting the savings patterns of middle Australia, which people want to be self-reliant. But the Labor Party wants to impose a wealth tax on the aged, and follow it with a wealth tax on the whole community-

Mr DEPUTY SPEAKER —Order! The honourable member's time has expired.

Mr WILSON —So that the only way-

Mr DEPUTY SPEAKER —Order! The honourable member's time has expired.

Mr WILSON —Well, he took frivolous points of order.

Mr DEPUTY SPEAKER —Order! I warn the honourable member for Sturt.

Mr WILSON —You should have warned him.

Mr DEPUTY SPEAKER —Order! I warn the honourable member for Sturt. Before calling the honourable member for Canning, I remind the House to observe decorum while the debate is taking place. The Hansard reporters are having great difficulty in taking down this debate because of the continual noise from both sides of the House. I ask honourable members to remember that they are in a democratic House and to give each other his due. I call the honourable member for Canning.