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Thursday, 13 September 1973
Page: 1012

Mr LLOYD (Murray) - This social service legislation is the largest single item of Government expenditure. It involves $l,874m, which is almost 20 per cent of the Budget. Yet this legislation was introduced only on Tuesday. Other social service legislation was introduced before that. We have had only today to look at it, including the new taxation provisions, and we are now having a restricted debate on it. I think that shows up the attitude of this Government to such an important piece of legislation. The Australian Country Party supports it and in supporting it I should like to remind the honourable member for Mackellar (Mr Wentworth) that the Country Party was also in the last Government and that the Chairman of the Joint Social Services Committee was the Country Party member for Hume who worked hard for the abolition of the means test.

The Country Party welcomes the new measures for orphans and the blind announced in the Budget and carried on in this legislation. It also welcomes the development and progress in rehabilitation procedures and measures. I think that the Minister for Social Services (Mr Hayden) recently mentioned that a more positive role would be taken in rehabilitation in that employment would be sought for people being assisted. I hope he said that. If he did not I hope he will look at the matter because I know of several instances of people who have been rehabilitated but who have found problems in obtaining employment and who seemed to receive very little encouragement from the rehabilitation people to help them find employment.

The basic increase of $1.50 in the pension is insufficient in the inflationary situation facing Australia today. I think that a more realistic figure would have been $2, if the pensioner is to stay ahead of inflation and if there is to be any realistic move towards the Government's stated policy of having pensions equal to 25 per cent of average weekly earnings. Pensions and welfare are relative. The weekly pension figure tells only half the story of the welfare of a pensioner. The other half of the story is the cost of living. Inflation is the pensioner's worst enemy. This Government can huff and puff all day about what it intends to do or is doing to help the pensioner; but unless it can restrict the inflation rate the pensioner will be progressively worse off all the time. It is not much good honourable members on the Government side saying that in 1963 pensions were increased by a certain figure and that in 1973 they were increased by a larger figure. One also has to look at the inflation rate on both occasions.

I still object to the adult unemployment benefit rate being paid to junior unemployed. This was one of the measures of the new Government. I object particularly now to juniors - 16, 17 and 18-year-olds - being paid the adult rate when we have a situation of, if anything, overfull employment and inflation - the nation's greatest problem - and when every able bodied young man who can work should be encouraged to work and not given an easy way out if he is so inclined.

The supplementary assistance benefits still fall short of what they should be. We have rent supplementary assistance, but there is no rates supplementary assistance. I know that some of the States do provide some rates assistance and that Victoria, in the State Budget which was announced the other night, has joined those States. However, many families which have a house to be paid off, as well as rates to be paid, when the breadwinner dies, are as impoverished as anybody. Yet they receive no assistance at all. Because they have tried to be good Australians and to buy their own houses, they are penalised. The Australian Government could justifiably - I think that the States would welcome it - take over the responsibility for rates assistance as well as rent assistance.

With the various provisions for assistance to people such as unmarried mothers and widows, we are rapidly reaching the stage where the Government must look seriously at some proposition to assist those mothers who do not qualify for any form of assistance but who prefer to stay home and rear their young families in the best manner possible - that is, by being with the children at home - instead of chasing financial gain by going out to work. These people are putting their children first. Their husbands are possibly only on the basic wage or a little more.

The major item in this legislation is the abolition of the means test for those who are 75 years and over. The Country Party supports the abolition of the means test, as it did when in government with the Liberal Party. This policy was announced jointly before and during the last election campaign. As far as I am concerned, the sooner the means test goes the better, because it will provide an incentive for people to help themselves and to retain an interest in life if they can do some work after they reach retiring age and not be penalised for doing so. Also abolition of the means test will do away with the injustice of the 10 per cent notional return on the property or assets side of the tapered means test scale, which I believe is unjust to many people who have no hope of earning 10 per cent on their assets. The previous government, if it had been returned to office, would have done at least as much toward the abolition of the means test for those who are 75 years and over. I agree with taxing pensions when the means test is abolished. But this Government at no stage said that it would tax pensions paid to those between 65 and 75 years or would remove the taxation concessional allowance for those in that age category. This is a sleight of hand or confidence trick by the Government and will create an injustice for many people.

I do not think that in previous debates when the Government was in Opposition it said that there was anything wrong with the age allowance. I do not think it ever said that it was right to tax the pension when the means test applied. It seems rather incongruous, if, as has been stated, next year the means test will be abolished for those who are 70 years and over, that it is right to tax their pension this year but according to the Government's own intention it will be wrong to do it next year. The Treasurer (Mr Crean) provided some notes on the new taxation arrangements and how they will affect people. On page 4 of those notes he provided a chart. I seek leave


to have incorporated in Hansard a chart which I have prepared from basic figures obtained from Treasury officers and which shows the position more accurately. I have shown it to the Minister for Social Security and he agrees to its incorporation.

Mr DEPUTY SPEAKER (Dr Jenkins - Is leave granted? There being no objection, leave is granted. (The document read as follows) -


Mr LLOYD - The chart that I have prepared refers to those on non-pension incomes of $1,000, $1,500, $2,000, $3,000 and $4,000. The chart also provides 4 other columns. It refers to net disposable income, which is the income available to the person after tax has been paid on his total income; the tax paid by those in receipt of the age allowance but with no tax on the pension; the net disposable income if both the first two provisions are still prevailing; and finally the net disposable incomes for persons on 2 different tax rates. The chart produces some rather interesting results. For example, on the married scale a person receiving income of $1,500 plus pension will receive $2,556, but he is $169 worse off because of the provisions in this Budget. A person with income of $2,000 and in receipt of a pension is $349 worse off because of the introduction of the tax on pensions and the disallowance of the age concession. A person with income of $3,000 and in receipt of a pension is $358 worse off. A person with income of $4,000 and in receipt of a pension is $158 worse off. I thing it is quite legitimate that a person with income of $4,000 should not be receiving the benefit that those on the lower figure receive. For a person with a higher total income the reduction would be less because the concessional tax allowance for age people under the previous Government cut out at between $3,500 and $3,800.

I return to these 3 important figures: A married person with income of $1,500 a year is $169 worse off; with income of $2,000 a year he is $349 worse off; and with income of $3,000 a year he is $358 worse off. These are not wealthy people. They are ordinary people who possibly have saved to try to be a little better off in their retirement. There is a considerable number of them. These people have been hoodwinked by this Government. I agree completely with the honourable member for Mackellar when he says that more will be said on this matter when the relevant income tax Bill is introduced. I believe that the wrath of these people will be turned on this Government when they wake up to what has happened to them. Perhaps it will take a little time, but it surely will happen because in a way they have been asked to pay for the abolition of the means test in respect of those who are 75 years and over by the reduction in their net pension. The Country Party supports the legislation, but draws attention to the unjust and iniquitous provisions for those between 65 and 75 years who have been unjustly treated in the new social security provisions.

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