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Thursday, 13 September 1973
Page: 1000

Mr WENTWORTH (Mackellar) - I am here as surrogate for the honourable member for Hotham (Mr Chipp) who, unfortunately, has an engagement outside this House which he has had to accept. The Opposition will most certainly support the Social Services Bill (No. 4) 1973 which gives some increase in social services. This is in accordance with a pattern which, I am glad to say, has been current in Australia over many years that as our prosperity increases and as our standard of living increases social services should also increase. In supporting this Bill I say that many of the things, in fact all the things in it, are things which would have been on my files as the preceding Minister for Social Services. It therefore gives me great pleasure in supporting those proposals. I have said that they are proposals from the files of the previous Government, but they are not necessarily the best selection which we would have made from the files.

In some ways this Bill does not go far enough. As I proceed I shall try to make that clearer.

I refer firstly to the proposal made by the Government to increase the basic rates of social service payments. The Government's proposals scarcely keep pace with the increase in the cost of living and, indeed, they do not improve the position of the social service pensioner. The proposals merely keep it static. The nominal increases in rates simply leave the pensioner, in terms of purchasing power, where he or she was before. I do not think this is good enough because it is not what previous Liberal Party governments have done.

Previous Liberal governments increased the real value of social services. Far less does this proposal measure up to the pretensions of the present Government to bring pension rates quickly into line with 25 per cent of average male earnings. I say this with some reluctance because I realise that the Government has had to cut its cloth in some respects to the money available. The Government, by reason of its financial policies in other spheres, has now run itself into a corner. It has been unable to do those things which are just and, in a sense, the pensioners have to pay for the Government's extravagance and incompetence in other fields. Because the Government has been unable, through its extravagance and 'incompetence, to find the necessary money to increase the pensions as the Opposition would have liked to have seen, the present provisions in the Budget simply keep pensioners more or less where they were and it does not give them any real increase in their living standard. The pensioners, in a sense, have to pay for the extravagance and the incompetence of the Government in other fields. I understand the dilemma in which the Government has been placed.

I find it less easy to excuse the deceptive and misleading presentation of these things in the speech made by the Minister for Social Security (Mr Hayden).

For example, when I look at the table which he incorporated in Hansard I find that most of the increases in pension, the credit for which he claimed for the present Government were granted by the previous Liberal Government. He shows that between June 1971 and June 1972 there has been a great increase in the nominal pension rate. He does not say that the major part of this increase was given not by his Government but by the past Government. I do not want to stress these things too much. There are more important things to talk about. But I think it is illustrative to note that the Government, in its presentation to this House, has adopted deceptive means. I think that the Minister's speech illustrates that. He said:

Honourable members will note that the largest and most generous yearly increase in pensions in money terms and in percentage rates has taken place since this Government came to office.

Of course, that is untrue. The biggest increases took place under the last Government. As I said, I do not want to emphasise this too much or emphasise the fact that the supportive services, such as supplementary assistance and child allowances, have not been adequately increased. I speak particularly about supplementary assistance which is given to those on the lowest rates of income. They are the ones who need most and they have had to bear the full weight of the increases in the consumer price index. They have received nothing under this Budget.

There are some things in this Bill which the Opposition will support. In fact it will support everything in this Bill although it is not necessarily the best selection and it is not necessarily good enough in some fields. I would have hoped that the previous Government would have done something earlier about the double orphans. Certainly it was in our program for this year. In his speech the Minister referred to what had not been done for double orphans, but he forgot that assistance for double orphans is to some extent the proper prerogative of the States. What he did not say was that there is a class of people who deserve even more assistance - that is, the widowers with dependent children. They would have been my first welfare priority in the Budget had I remained the Minister. It is unfortunate that the Government has seen fit not to pay any regard to these real needs.

However, let me support unequivocably the proposals in regard to rehabilitation. I think that these are sound. These proposals are in line with what we were attempting. The rehabilitation system is one that stands to the credit of the Liberal Governments which in 23 years developed this system. I refer particularly to the work done by the Minister whom I succeeded, the present honourable member for New England (Mr Sinclair), and what happened during the time that I was Minister, when these rehabilitation services were first created and then so greatly expanded. Let me commend entirely what the Government is doing along these lines. I am sure that this is correct. I regret only that it is not tackling the rather fundamental question of invalid pensions and the way in which we must help the invalid pensioner who is unable to rehabilitate himself, and help him in a way which does not penalise him by the loss of his pension. I think that this is one of the real defects in our present social service system. This is one of the things which would have been tackled by the Liberal Government had it remained in power.

Now let me come to what is perhaps the most disappointing feature of the Minister's statement, and that is what he had to say about the means test. The liberalisation of the means test is different from other social service measures in that it can itself be counterinflationary. This is particularly important at a time when there is a labour shortage and there are avenues of employment open for those who would otherwise want to retire. It is particularly important therefore in the present situation. It is particularly important also in the present situation in which more savings are necessary in order to counter inflationary pressures which the Government, quite naturally and properly, is apprehensive about. Therefore it seems to me that expenditure by way of relaxation of the means test is possible without creating inflationary pressures and is therefore different from other expenditures on the expansion of the social service program. It is to me extremely disappointing therefore that the Government has not taken advantage of the opportunity which is open to it at the present stage.

The history of the means test is not in accordance with the statement made by the Minister in his speech on this Bill - a statement which was factually false and misleading in its implications. Relaxation of the means test has been a Liberal policy for a long time. The Minister stated that nothing had been done by the Liberal Government. This is entirely wrong. The merged means test, the tapered means test, the relaxation of the free area - all these things stand to the credit of past Liberal governments. While I was Minister, in the last Budget, that is the Budget of 1972, before we went out of office, the Treasurer gave a complete and unequivocal pledge for the abolition of the means test for those aged 65 and over during the coming Parliament. The Labor Party matched this pledge in its election promises. I believe that because of what we did it was forced to imitate this, and it came forward with something which was very like what we had proposed. But if we had remained in office the first steps we would have taken, that is the steps in this year's Budget, would have been vastly greater than the steps which the Labor Party has seen fit to take. It has failed in regard to the means test. To take it off merely at the age of 75 is itself rather derisory. Indeed the goal it is setting itself is quite different from the goal promised to the people in the Prime Minister's policy speech. The Prime Minister's policy speech was quite unequivocal in this. He said: 'We are going to abolish the means test in the life of the present Parliament.' But the Treasurer has said that the Government intends to abolish the means test only for those 65 and over. In other words the Treasurer has made a liar of the Prime Minister. I do not myself disagree with what the Australian Labor Party is doing. I think what it is doing is probably correct. All I am saying is that what it is doing is not what the Prime Minister promised to do. The Prime Minister therefore has been elected to office on a false pledge.

But this is not the real point. The real point of this Budget in relation to the means test is rather different. This is something which I believe will be the object of major criticism in the course of the next few weeks. The Labor Party's plan is to abolish the means test for those over 75 years of age - small and derisory plan as it is. But it is also a deceptive plan because at the same time Government supporters say that they are going to remove the taxation allowance for aged persons and substitute for it another plan. We have not seen the details of that other plan, but we do have the Treasurer's statement. I have here in my hand the Treasurer's roneoed statement put out from his office in regard to the plan. All I will say is this: If the Treasurer's roneoed statement is correct, this is the most cynical and dreadful betrayal of aged people that I know of.

The abolition of- the aged persons tax allowance and the substitution for it of something else as outlined in his speech is really something which strikes at the root of the position of all middle income pensioners; that is those who have, for example, superannuation income in addition to their pensions in the $20 a week to $50 a week range. Of course it does not affect the really rich pensioners who will benefit by the abolition of the means test but it does penalise every pensioner in the middle income range. Many pensioners, even those who are getting the full pension including those pensioners who are below 75 years of age will find themselves much worse off under the Treasurer's proposal. This is one of the really dangerous and dreadful things that has been done by this Government. It has done it surreptitiously. The Government has not told people what it is about. It hopes it is going to get away with it. But I can assure the Government that it is not going to get away with it, because we are going to tell the truth and when the tax Bills come before the House in accordance with the Treasurer's roneoed statement, we will endeavour to amend them. If we fail to amend them we will at least let the people know what is meant by the Labor Party.

The result of this measure is not that the Government has relaxed the means test; it has tightened the means test. Let me take the position of a single pensioner with a superannuation income of $20 a week - that is not much. He would not be a rich man. He would not have paid any tax under our proposals. Under the Government's proposals he will pay a little more than $50 a year. His income will be cut by $50 a year. The Treasurer did not say this. The Minister for Social Security has not said this, but the public had better realise it. Let us think of the single pensioner with an income of $30 a week. That pensioner under the Liberal proposals would have paid $40 a year taxation. Under the Government's proposals he will pay $130 a year taxation. That has not been told to people. They have not realised it. . They have not realised how these proposals will hit the small man.

Mr McLeay - It is double-crossing.

Mr WENTWORTH - That is right. The honourable member for Boothby has put the words into my mouth. The Government has double-crossed the pensioners on the means test. I have .spoken of the single pensioner, but the position of the married pensioner is far worse because in most cases the income will be aggregated in single hands since the income of most of the small people consists of superannuation. Let us look at the position of a married pensioner who is receiving $30 a week. He will pay something like $300 a year in extra tax under the Government's proposal.

Mr McLeay - He is hardly a wealthy man.

Mr WENTWORTH - He is not a wealthy man. Let us look also at the position of the superannuation pensioner who is receiving $35 a week. He will pay more than $300 a year extra tax under the Government's proposal. I do not want to talk about the so-called wealthy person. He will not be affected because he never received the benefit of the Liberal-Country Party Government's aged persons tax allowance. There is doublecrossing here; there is a lot of bad faith. I will be producing actual figures and examples of this. The Labor Party, perhaps without knowing it - but I believe it did know it and hoped that it would be concealed - in point of fact has double-crossed the little man, the man receiving $20, $30 or $40 a week superannuation - not the big man, but the little man.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - You do not think the tax scale will stay the same forever, do you?

Mr WENTWORTH - I thank the Minister for Housing for his interjection. He asks whether I think the tax rates will stay the same, forever. I know that under the Labor Party's plan the tax rates will have to be increased. This is what it is doing in effect. I would like to hope that tax rates will be reduced, but I know that under Labor they will not be. I do not want to go into the future and deal with hypotheticals. I will look at the position as it is now. The position as it is now, on the basis of the Treasurer's roneoed statement, is the most dreadful deception of the small and middle income pensioner. I speak particularly for the small man with an income outside of his pension, probably from superannuation, of from $20 to $50 a week. I am not speaking on behalf of the big man; I am speaking on behalf of the small man. Do honourable members opposite realise what they have done or what they propose to do? I can assure them that they will not get away with it. I can assure them also that the actual figures, based on Labor's iniquitous tax proposals, deceptive as they are, will be told to the country before very long. We will be going into this in more detail when the income tax Bill comes before us.

Mr Berinson - Did you propose to abolish the means test without making the pension taxable?

Mr WENTWORTH - The honourable member for Perth helps me. We did propose to make the pension taxable, but we proposed also to retain the aged persons tax allowance. It is not the question of making pensions taxable which is important. The important thing is the way in which the Treasurer, by some underhand trick, has changed the aged persons tax allowance. I beg your pardon, I am wrong. The important thing is the way 'in which he has proposed to change the aged persons tax allowance. I say that because I am by no means certain that the Parliament will allow him to do so. His present plans ate so appalling that I do not think the Parliament will accept them.

Mr Berinson - You did not accept the Treasury advice that retaining the age allowance was anomalous?

Mr WENTWORTH - I do not know what Treasury advice the Government had in the matter. All I know is what the Treasurer has said in this roneoed statement which he has distributed. It is on that document that I base what I am saying. I take it that this announcement from the Treasurer, a copy of which I obtained personally from his office, is a correct announcement.

Apart from this factor all sorts of troubles will occur about the provisional tax on these new classes of taxpayers, the aged persons. This tax will not apply only to people over 75. The people I am talking about are all pensioners, women more than 60 years of age and men more than 65 years of age.- All pensioners will be affected. This new impost will apply not only to people over 75 years of age but to all people of pensionable age. I believe that the extra taxation collected from these people will be somewhat greater than the $40m which the Treasurer estimates as the cost of removing the means test for people over 75. It is the 3-card trick. The Government has deceived the pensioners and, in particular, it has deceived the pensioners in the small and middle income range who earn between $20 and S50 a week. They are the people who will pay for what the Government is trying to put over the country.

I do not wish to go into this matter further. I shall be elaborating on it when the Bill relating to the taxation measures is before the Parliament. May 1 say, in regard to the relaxation of the means test, that I regret that the Government has not seen fit to take something else from my files - that is, to carry on with the projected liberalisation of the means test on supplementary assistance. This is one of the things which is really necessary.

Again I am disappointed that there is no real forward move and no real plan in the Bill that is before the House. It consists of certain proposals which were taken from the past Government. As I have said, the selection is not necessarily the best selection. It is still a selection from proposals which were good. In some respects, it does not go far enough but, nevertheless, the Opposition proposes to support this Bill that the Government has introduced.

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