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Wednesday, 7 March 1973
Page: 318


Mr LLOYD (Murray) - The honourable member for Swan (Mr Bennett) and other speakers on the Government side of the chamber have shown some surprise that politics are involved in pensions. They made very political speeches in which politics were shown to be very much a part of pensions. The Minister for Social Security (Mr Hayden) made a very political second reading speech. It was the custom with the previous Government for a second reading speech to be a technical document of explanation. This matter will continue to be political because pensioners are people and people are politics. This Government will have to face more politics in regard to pensioners because of its failure to live up to its election promises which many people believed would be carried out and which will not be carried out by the legislation which is proceeding at present. It is all very well for honourable members opposite to say that the promise of an immediate payment of $100 to people on age pensions and unemployment benefit was not made in the actual Australian Labor Party policy speech. That promise was definitely made by Mr Whitlam in Perth. I have a copy of the 'West Australian' referring to the promise of $100. The matter was referred to again in Budget debates and in calculations of the cost of proposals if the Australian Labor Party became the government.


Dr Jenkins - It was not in the policy speech.


Mr LLOYD - I agree that it was not in the policy speech, but the important point is that people expected the pension increase because the promise was made. I had people coming to my office after the election asking when they were to receive their $100. This promise, too, was made by the Prime Minister in his policy speech:

All pensions will be immediately-

I emphasise immediately - raised by S1.S0 and thereafter, every spring and every autumn, the basic pension rate will be raised by $1.50 until it reached 25 per cent of average weekly male earnings.

The same people also asked me before Christmas when they would receive their $1.50 a week because it had been promised together with the $100. As to the pension rate reaching 25 per cent of average weekly male earnings, it has been pointed out already that with the present rate of inflation in this country and a twice yearly increase of $1.50, pension rates will never reach 25 per cent of average weekly earnings because the inflation rate would have to drop below 7i per cent per annum.

The Minister for Social Security mentioned in his second reading speech that the Government would be prepared to respond appropriately if such proved to be the case, the point being that the inflation rate may remain as high and, therefore, ยง1.50 would be insufficient. The honourable member for Perth (Mr Berinson) referred to reasonable time being allowed in which to introduce the changes. Considering that many Australians voted for the Australian Labor Party at the election in the belief that they were to receive additional benefits more or less immediately, I think it is up to the Government to say what is a reasonable time so that the people of Australia, particularly the pensioners who have been lulled into this belief, will have a clear indication of what will be the Government's performance as distinct from the Government's promise.

One thing to be remembered is that the greatest danger faced by people on fixed incomes, particularly pensioners, is rampant inflation. They suffer more from inflation than any other group in the community. While a government can appear to be giving something to people by increasing pensions it can be taking it away very effectively because of the inflation rate. As the bills come in, as they inevitably will - I am referring not to Bills in this House but to financial bills to this country due to the financial policy of this Government - the pensioners will have to ask the question, as will the people of Australia generally: 'Have we really been made any better off or are we worse off because of this problem of people facing inflation on a fixed income as pensioners?' This leads me to the general principle, but a false belief, adopted by some people that, because a country devotes a certain percentage of its gross national product to social welfare payments, the people of that country are better off. I think that a distinction must be drawn between a person's welfare in absolute terms and a person's welfare in relative terms. There is no doubt that if a high percentage of a country's GNP is devoted to welfare in relative terms it could be said that those people are better off than are other people in the community. But if, because of the overall financial policies of the government of a country, that country stagnates and real improvements in standards of living and welfare do not proceed as promised or as hoped, the actual welfare of those people in absolute terms is slipping behind all the time.

I can remember the comparison that was made in the course of some of the disturbances that occurred in the United States of America. People suffering relative poverty were complaining. I think they were rightly complaining because in relative terms they were badly off compared with other people in their community. But the comparison was made that the people who were complaining - industrial workers, particularly in the Los Angeles area - in absolute terms were far better off and were achieving an improvement in welfare at a faster rate than were the average workers in Britain.

I agree that it is important to have relative welfare within a community. But this cannot be achieved with complete disregard for absolute welfare and for overall improvements in standards of living in a country which the policy of any government can effectively ruin. I think the position can be summed up by the story about a person who was driving down a street in a new car. A Labor Party supporter and Country Party supporter, were walking down the street. The Labor Party supporter said: 'If I had my way that person in that car would be walking down the street with us*. The Country Party supporter said: 'If 1 had my way we would all be driving down the street.' I think that this story illustrates the difference between absolute improvements in welfare and relative improvements in welfare. Incidentally, that story originally was told, I believe, by an official of the union representing automobile workers in the United. States who was making the point that an American worker was better off than his British counterpart because America believed in absolute improvements in welfare.

In the speeches that have been delivered, poverty, when it has been mentioned, has been used in relation to city poverty. ! do not criticise this approach because various studies have made the point correctly that poverty is to be found in our cities. The honourable member for Melbourne (Mr Innes) quite properly referred to this fact in his speech. But I think it would be a mistake and an oversight if we did not recognise also - I hope the Minister for Social Security does recognise - that in many ways a greater percentage of poverty exists in rural areas than in metropolitan areas.

Some of the policies that this new Government will introduce to assist in alleviating some of the problems of poverty will be applicable in metropolitan' areas only. Not only is there a higher percentage of chronic unemployment in country areas, as indicated by rural unemployment relief grants, but also is there the problem of country people earning incomes which are below the minimum wage which is fixed for people in receipt of wages. In many of the smaller rural areas particularly in respect of dairy farms and banana plantations in northern New South Wales, owners of holdings receive very low incomes. My point is proved by the results of surveys by the Bureau of Agricultural Economics. One should not forget that poverty is something more than the conditions found in a big city industrial ghetto. A person does not need to be unemployed or in receipt of a pension to be poverty striken. A person who is self employed, unlike wage earners, has no guarantee of a reasonable income. I know honourable members on the other side will say that the minimum wage is not high enough. That may be so but at least some form of minimum wage is guaranteed for those people who qualify for it.

We should not overlook the problem of rural poverty. As yet the means test is still applied. Many of the poverty stricken people in rural areas are debarred from receiving social service benefits because of the factors working against them. People who are self employed, particularly if they are property owners, cannot receive these benefits because the means test includes a calculation of 10 per cent notional return on property. This criterion must be met before these people can qualify for social service benefits. This requirement makes it almost impossible for them to receive these benefits. They may be poverty stricken but still be refused any type of pension as they cannot sell their property. .Because of the notional return calculation of 10 per cent - in many cases the actual return is a negative return on capital rather than a 10 per cent return - they are beaten all round.

I made this criticism of the previous Government when it was in power and I will continue to make it whichever government is in office. I believe that this is a most unjust feature of our social security system. The only way to overcome it is by the complete abolition of the means test. I will encourage the present Government to get on with the job of abolishing the means test.


Mr McKenzie (Diamond Valley) - We will do that.


Mr LLOYD - Good. I am glad to hear that. The new rates announced in respect of unemployment payments are of considerable concern to me and to the Country Party. The rates for persons below the age of 21 years have been dramatically increased. The rate for 16-Year-olds has been trebled. It now equals the adult rate. I believe that this is not in the best interests of the people concerned and it is not in the best interests of our country. It discriminates against an adult and a married person. A study of the proposed increases reveals what I would consider to be discrimination against the more genuine person who needs assistance when he is unemployed. By fixing the rates in this way the Government will reduce the need for an unemployed person to take the initiative and to look for work. I agree that the proposed increase of $4.50 a week is nothing less than anybody should receive who cannot obtain work, particularly if he is over 21.

But 1 am concerned with the position of the person under the age of 21 years, particularly if that person is single. There are social implications for the nation in that case. The attitude of young people is that somehow or other they can get benefits without having to work for them. There are real contradictions between the circumstances of young people. Apprentices - I think Australia needs as many apprentices as it can train - receive a small income while they are training. Yet somebody out of work in the same age group will receive the adult unemployment rate. This situation is not good. The Minister stated in his second reading speech:

Unemployment benefits do not pander to lazy layabouts. The work test administered by the Department of Labour through its unemployment officers effectively controls the work shy.

But in a Press release from the same Minister on 19th January which was quoted earlier by the honourable member for Indi (Mr Holten), the point is made that a person's dress should not debar that person from receiving unemployment benefits. If one talks to employers about the standard approach of these young people who do not wish to gain work, one is informed that they deliberately do not have a wash and deliberately present themselves as dirty as they can, knowing full well that they will be refused employment. But under the new regulations, unemployment benefit will be paid to them. One has only to look at the shortage of workers at present in the fruit growing areas of Australia to see the facts of this situation. We are told on the one hand that Australia is suffering the highest unemployment rate that it has recorded. Yet in the Goulburn Valley fruit growing area and in the tomato and grape growing areas of Victoria, the shortage of workers has never been so great. I think that the honourable member for Angas (Mr Giles) pointed to a similar situation in South Australia. These conditions exist at a time when our unemployment rate is supposed to be the highest for many years. The reason for this state of affairs is that young people who do not wish to work find it easy to live very well on unemployment benefits. In summer they live in southern Victoria and in the winter months they travel to Darwin or Cairns. They live very well indeed. One has only to talk to the owners of orchards in the Goulburn Valley to hear of the blow-ins who think they might like to work in the orchards. When they are told what the work really entails they say: 'No, I can do far better by continuing with my unemployment benefit'.

We have to be very careful in this country that we do not put such a squeeze on the self-employed person, whether he is a small businessman or a farmer, a person with some initiative - I do not mean a wealthy company but a person who wants to lead his own life and do something constructive himself - that he would say that the only organisations really worth being employed by are the Government service and big companies. We have to be careful that a person who wants to do something for himself is not squeezed from all sides. We have to be careful also that in some areas our social welfare payments are just to all in the community and that the penalties we impose on certain sections of our society do not outweigh the justice we are doing to others or, put another way, that we do not give to one section on the one hand and take away from another section on the other. We have to realise that there are important national and social goals which should not be jeopardised by certain other aspects of policy which sound good and are good but which at the same time are outweighed by these problems which will develop.


Dr Jenkins - So we do nothing.


Mr LLOYD - No. We take a realistic attitude. We want to remember and this would worry me very much if it happened - that unless we take into account all these aspects when considering an overall social welfare policy the same thing could happen here as is happening in at least one other country, at the present time. There a backlash has developed against social welfare which is now acting to the detriment of those who deserve and need social welfare. We have to be sure that in its application our policy is just to all sections of the community and that this backlash or reaction does not develop and retard the progress of true social justice in our community and, as a result, hurt more those people whom we are trying to help with this legislation.







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