Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Hansard source

I rise to speak, in this debate on the Appropriation Bill (No. 1) 2006-2007 and related budget bills, about the effects of the budget on people who live in the western suburbs of Adelaide in my electorate of Hindmarsh. The people make the area, and this area, in which I have lived all my life, is composed of a mix of people from all over the world. We have people from Italy, Greece, Vietnam, China and recent arrivals from Somalia and the Sudan. There are over 49 different nationalities in the electorate of Hindmarsh, and that is what makes it so vibrant.

This area has its activity and vibrancy because of the people who live there. In many cases this vibrancy is evident, throughout the suburbs, in people engaging in life who are clearly of retirement age. Hindmarsh has a higher concentration of senior Australians than anywhere else in the country and the western suburbs of Adelaide gain so much from their presence—their histories, their activities, their values and, most importantly something we can learn from older people, the regard that they have for each other as fellow Australians and the kindness and consideration that makes this manifest.

This is a population to whom we all owe much. Many of these people have served in world wars. They have paid their taxes all their lives, and they have worked hard all their lives. It is humbling to speak with, for instance, recipients of World War II Commemorative Medallions and learn a little of what they endured for the benefit of this great nation of ours. People you see on the street every day all did their bit for this country, like virtually no other generation. So it hurts all of us, I think, when we see our senior Australians hurting; certainly, it hurts me.

A major consideration of most is, of course, being able to finance their lives—to pay their bills, buy their food and pay for a roof over their head. The forms and degrees of wealth among senior Australians in the western suburbs of Adelaide are as diverse as the precious wildlife within our neighbouring Gulf St Vincent. I am glad that this federal budget acknowledged this in doing the right thing by many senior Australians through a variety of measures, each designed to help the person with a particular form of wealth—or lack thereof.

The senior Australian tax offset, when introduced, gave maximum benefit to those retirees who, in terms of the single pensioner, had a total income of twice the dollar figure of the age pension. That was all the way back in the 2000-01 financial year—five years ago—and it has not been touched since, leaving the original dollar figure of maximum benefit to decrease as a proportion of the age pension for singles, from 200 per cent of the pension all the way down to around 135 per cent. That is about a third. Talk about bracket creep—this is one area where bracket creep has really had an effect.

While the parliament has been good enough to tie the age pension for singles to 25 per cent of average male earnings, seeing a moderate increase in the dollar figure of the pension from around $10,000 per annum to approximately $12,000, the government’s much exalted senior Australian tax offset has decreased in value by about a third.

The consequence of this has been that pensioners on the same amount of money, in real terms, have been increasingly paying outrageous effective marginal tax rates on an income that was supposed to be Australian tax office tax-free. Right now, with the tax offset peaking at $20,500 for single pensioners, a retiree with an income of $22,000 is paying an effective marginal tax rate of 52 per cent; with an income of $23,075 is paying at a rate of 80 per cent; with an income of $23,780 is paying 69 per cent; with an income of $27,481 is paying 68 per cent; and a retiree with an income of $34,560 is paying a 66 per cent effective marginal tax rate, according to the Parliamentary Library figures. That is remarkable. It is astonishing that those figures and those rates are put on people who have worked all their lives and have already paid taxes.

I hope the Treasurer and his colleagues have also sensed people’s dissatisfaction with the pharmaceutical allowance paying the same dollar figure for a couple as for an individual. Many electors would appreciate this allowance being addressed, and certainly people in my electorate have been calling my office to ensure that they let me know how they feel so that I, in turn, could convey their feelings here in this chamber. The allowance should be made equally available for individuals, irrespective of their domestic situation.

I think it is only proper that, if a government introduces a measure, it should maintain the value of that measure in real terms and not withdraw the benefit it offers people by neglect. The adjustment of the senior Australian tax offset does help those who have an income over $20,000. Those who do not earn such amounts face the continuation of the effective marginal tax rate that they are familiar with but nonetheless disapprove of for its similarity to the tax rates soon to be paid by people with incomes over $75,000.

An average age pensioner suspending his or her retirement for a few hours a week, going out and doing what work is available and living on perhaps approximately $18,000 per year is on an effective marginal rate equal to the income tax rate that will be paid by someone earning $80,000 per year. This pensioner’s effective marginal rate is higher than that paid by companies and higher than capital gains tax—and only for working when one should traditionally have fully retired, for working a number of hours here and there to gain a few extra dollars to fund their volunteer work, perhaps, their help at the local club or perhaps an annual trip to visit their grandchildren.

Means testing has not always been an absolute, a given. In the sixties and seventies, universalism was a policy pursued by both sides of politics. While means testing is here today and I expect that it is here to stay, age pensioners see their effective marginal tax rate of 40 per cent as a bit steep and due to be lowered in the overall context of the pension withdrawal and income tax equation.

My electorate office in Hindmarsh has been receiving many calls from people solely reliant on the age pension, people to whom $100 is a lot of money. I do not know whether members opposite can comprehend that but, yes, $100 is a lot of money to many people, especially given the increases in the cost of living that people are enduring—the extra costs of petrol, the slight rises in interest rates and a whole range of other things. A one-off payment equal to the annual utilities allowance is welcome. It will help, but it smacks of tokenism. It appears to be an afterthought, a gesture designed to suggest that the government does care for the recipients, their troubles and their lives.

In the context of this budget, with tens of billions being donated to individual interests around the country, I guess there may be a few full pensioners who might consider themselves fortunate for not being totally ignored. But I spoke recently in the electoral office with a person whose mother was a veteran, an 80-year-old woman, a volunteer with 20-plus years of service, a person who deserves our respect. I heard stories that she had been in the Flinders medical hospital for up to 12 weeks because of the lack of an available nursing home bed—and I am sorry, but that $100 will not see her through. Certainly when we hear stories like this we wonder where the economic prosperity is taking us and for whom it is. It is certainly not for this woman who waited for 12 weeks in a public hospital bed to find a bed in a nursing home.

I am not going to tell her that the $100 is not worth much. If she had buckets of superannuation, perhaps I would be able to say to her, ‘You could pay for your own home care,’ but unfortunately this woman does not have buckets of superannuation. Certainly that is not the way that we should treat our elderly. All I can tell her is that, after ringing around all over the place, my office has not been able to find her anything remotely acceptable, but we will not stop there. We are not going to wash our hands of this problem, blame the private sector and return our focus to our $30-odd billion in giveaways. We are not going to suggest, either, that her mother take a bed that is closer to the Flinders Ranges than to her family and then laugh and snigger with colleagues over next year’s anticipated $10 billion surplus. Older people have played an important role in our society. As I said earlier, many of them have fought in wars, they have paid their taxes and they have worked all their lives. The best we can do for them is to ensure that we give them some sort of comfort in their twilight years instead of torturing them in a public hospital bed for 12 weeks, with those poor people not knowing where they are going to go next.

Not one dollar of that $10 billion will be going into an area of prime importance to the health of Australians. We see that there was no dental care in this budget. I know that those opposite will debate and say that it is a state responsibility, but it clearly states in our Constitution under section 51 that dental care is a Commonwealth responsibility.

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