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Tuesday, 15 May 1973
Page: 2119

Mr WALLIS (Grey) -1 rise to support this Bill. 1 am sure that it has the support of honourable members from both sides of the House because it provides some improvements in superannuation pensions to so many former employees of the Commonwealth Public Service who had contributed to the Commonwealth Superannuation Fund for many years and who have now retired. The Bill gives effect to the recommendations of Professor Pollard which were contained in the report tabled by the Prime Minister (Mr Whitlam) some weeks ago and which resulted from an examination by Professor Pollard of the means of updating the method of payment of pensions. Superannuitants have been unjustly treated in the past not only because they have been deprived of any social service payments as a result of their membership of the fund and by the operation of the means test but also because the value of their superannuation units remained static over many years. With the effect of eroding money values, these people were a forgotten race. They were falling fast behind in their battle to lead a decent existence despite the fact that in order to keep up their superannuation payments while employed they were depriving themselves of portion of their income to provide for their retirement. At the same time they were contributing to general taxation without getting some of tha benefits. The previous Government did give some recognition to the problems of eroding values of superannuation pensions.

Sitting suspended from 6.15 to 8 p.m.

Mr WALLIS - Prior to the suspension of the sitting I was speaking about the difficulties that were faced by contributors to the Superannuation Fund who retired some years ago on a pension with a constant value and who were the victims of the erosion of the value of that pension due to inflationary pressures. However the previous Government recognised this fact in that it introduced some years ago the notional salary method of adjustment of those pensions under which the Commonwealth segment of the pension was reviewed every 5 years and adjustments were made to this segment in line with the actual changes in the purchasing power of money.

However, whilst this was an improvement on what had applied in the past it still left much to be desired. Over a period of 5 years the value of the pension would drop considerably, but the pensioner had to endure a falling value of his pension until such time as the Commonwealth restored some value to its contribution. The previous Government recognised the problem to some extent in that last year the then Minister mentioned the fact that it was examining the possibility of reviews being held more often. Of course, later on Professor Pollard conducted investigations, and this is what we are dealing with tonight. This Bill gives effect to the proposal for alterations to the pension to be carried out every 12 months and, as stated by the Treasurer (Mr Crean), the alterations will be based on variations iri the consumer price index from one March quarter to the next March quarter, the increased payments being made on the first pension pay day in July of each year. This is subject to the increase not exceeding the percentage increase in average weekly eanrings. The increase will, of course, also apply proportionately to widows and other dependants of deceased superannuation contributors.

This Bill is certainly a big step forward in providing justice to all former contributors to the Commonwealth Superannuation Fund who have suffered injustices in the past because of the erosion of the value of their pension. I am sure that it has the support of every member of this House. The Treasurer in his second reading speech foreshadowed comprehensive reviews of other aspects of the scheme which we can expect to be tabled in the House in the future. We would hope that the scheme will give to contributors confidence in the future when they retire and will enable them to live at a level for which they have paid a fair proportion of earnings during their working life.

There are a few other matters associated with the Bill on which I would like to make a few comments. We are all aware that when the Commonwealth Actuary made an examination of the Fund last year he declared that there was a surplus. I think the amount stated was $15m. Some years ago the surplus that then existed in the Fund was distributed to contributors to the Fund. However, last year the Actuary suggested a new scheme under which the contributor paid a proportion of his income according to the age at which he joined the Commonwealth service. Since then we have seen a new report which comes out with a different idea under which, I think, the contribution is based on 5 per cent of the employee's earnings throughout his working life. This report was tabled in the House 'ast week. I think it is about time that a scheme such as this was introduced, because as the contributors get older they find that the payment of their contribution units becomes a greater hardship, particularly in the last few years of their working life. I know, and we all realise, that towards the time when a person is due to retire on a superannuation pension, any increase he receives in his wages or salary results in an increase in the superannuation payments he has to make to maintain his contributions at a level comparable with his wages which often exceeds the increase in his wages. We hope that a new scheme such as the one that has been suggested is introduced so that we can overcome this problem that older contributors face when they are nearing their time of retirement.

There are a few other matters which I would like to mention. I am a former contributor and I know of a number of contributors who, because they had growing families and could not raise the necessary finance to commence the purchase of a home, decided to use the accumulated money they had in the Superannuation Fund. They resigned from their Commonwealth job and used this money to purchase a home, because this was the only chance they had of raising the necessary finance. Because of this the Commonwealth in many cases lost good staff. I do not claim to be an economist, but I wonder whether an examination could be made to see whether it is possible for contributors to the Fund to have finance made available to them for. the purchase of a home with moneys provided from the Fund. Most of the men I know of who resigned were skilled tradesmen whose resignation was a loss to some Commonwealth instrumentality. 1 would also like to see examined the position of contributors who resign from the Commonwealth service to go to other employment. At the present time they get a return of their contributions and that is all. I suggest that an examination be made to see whether it is possible for these people to receive some return on the money they have held in the Fund for some years. This is a matter about which I have felt strongly for years and about which I know a lot of contributors who have left a Commonwealth job have felt strongly. All they have received back is the actual amount they have paid in. Often Commonwealth contributors living, say, in country towns are placed in the position where to get better education for their children, possibly to provide better employment opportunities for their children or perhaps for a healthy reason, they are required to resign from a Commonwealth job and move to the city. These people finish up with only the actual contributions they have paid. T would certainly like to see some examination made of the possibility of the contributors who resign receiving some interest payment on their contributions. I do not want to take up my full time. I certainly commend the Bill to the House.

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