Jon Sullivan (Longman, Australian Labor Party) Share this | Hansard source

I rise to support the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. At the outset I note that I, like most members of this chamber, have received correspondence from my local branch of the Association of Independent Retirees, which in my case is the branch from Bribie Island, whose correspondence to me included a newsletter from their secretariat. Essentially, the views that they are expressing are twofold. The first view is that we should oppose the change that is being made through this legislation to the way in which income is measured for entitlement to the Commonwealth seniors health card. Secondly, they want us to increase the threshold levels from those that exist. That increase in threshold level has not been dealt with in this bill. It was never intended to be dealt with in this bill, which is about determining eligibility by way of how we measure income. Interestingly enough, that has not been championed by members opposite in any of the speeches that we have heard thus far. Not one member of the coalition has come into this chamber and suggested that the plight of these independent retirees is such that we should raise the threshold to the levels that they want.

I think it is not a bad idea to look at some of the history of the Commonwealth seniors health card, and I thank the Parliamentary Library for the information that they have provided in relation to it. In the Bills Digest, they say:

The original purpose of the CSHC was to provide assistance to retired persons who were on low-income.

In fact, the initial upper income limits for eligibility for this card were the same as the earning level at which the age pension cut out. In July 1994 that was $21,460 for a single and $35,859 for a couple. That gathered a group of people who were denied access to the pension because of either the assets test or, as the member for Solomon mentioned, the residence test.

Interestingly enough, in the May 1998 budget there were some changes made to the eligibility levels for this card. In fact, in the May 1998 budget the single rate was raised to $40,000 and the couple rate was raised to $67,000. Those were exceptionally generous increases. In five years it was deemed by those opposite, when they were in government, that this card was such a good idea that it was worth raising the level at which people could claim it by 86 per cent. In his budget speech at the time, the member for Higgins, who was then Treasurer, indicated that this would enable a further 220,000 Australians to claim the Commonwealth seniors health card and benefit from this budget largesse—in an election year where 2,000 votes would have meant that the Howard government was a one-term government. Two thousand votes in 1998 is all that it would have taken for Prime Minister Beazley to be installed where I believe he rightly should have been. The member for Cowan indicated that these people received a little bit of welcome assistance. I am sure that Prime Minister Howard figured that those votes were a little bit of welcome assistance.

It did not stop there, because they were probably a little bit worried about how the election in 2001 would go, having gone so close in 1998. So we saw further increases in the 2001 budget. The single rate was increased to $50,000 and the couple rate was increased to $80,000. Those were, in turn, 25 per cent and 19.4 per cent increases. From 1994 to 2001 the thresholds increased by 133 per cent for a single self-funded retiree and by 123 per cent for a couple of self-funded retirees, and that is not counting the money that they were allowed to earn over what their taxable income was. In the budget speech of 2001, the member for Higgins, the Treasurer of the time, indicated that 50,000 people were expected to benefit from these new levels. That is a total of 270,000 Australians put onto the card, at a rather interesting rate.

The Association of Independent Retirees have aspirational levels. They want the threshold for a single increased to $60,000 and the threshold for a couple increased to $96,000, and they would like them to be indexed. That comes to a 20 per cent increase on the current levels and, the way that the economy is going, I can understand why they are asking for it. It would bring the increase in the threshold level up to 180 per cent for a single self-funded retiree and up to 170 per cent for couple retirees. From 1994 to today, what has been the increase in the cut-out rate, or the upper level of income, that a person can receive a part pension from? In that period of time, that level has risen 88 per cent. From 1994 to today, age pensioners have been able to earn an extra 88 per cent and retain their benefits by holding onto a small part pension, yet some are seeking to raise self-funded retirees’ benefits to 180 per cent from where they currently sit, at around 130 per cent. Somehow or other that seems a little bit strange.

A single age pensioner earns $14,615, if they receive the full pension. Yet we have people whom I would not regard as wealthy—I would not regard self-funded retirees as wealthy—but who are earning $50,000 versus $14,000 who want and believe they are entitled to the same considerations from the government in assistance to live with dignity that a person receiving $14,615 is entitled to. I struggle with that a little bit, particularly considering that, as it stands at the moment, that $50,000 could actually be because of somebody’s capacity to have fairly high untaxed superannuation. They could be receiving health cards on income—money in their pocket—in excess of $100,000.

Let me give you another figure. The median household income in my electorate of Longman—that is the income below which half the households receive and above which half the households receive—is below $25,000. Of course, I have a large number of pensioners as well as a large number of self-funded retirees living in my electorate and that helps to bring that median down. Additionally, low-income earners can access a low-income healthcare card and get some benefits from the government. If you are to receive a low-income healthcare card, you have to have an income below $23,192 if you are single or $38,636 plus $34 for each child if you are a couple. Families need this assistance easily to the same extent as an elderly couple. I understand that elderly people have a lot of medications to pay for and that health is a major concern as you age. As I am ageing, I notice that myself. But certainly families also have health pressures on their daily budgets. We have a situation here where older people earning two and three times as much as couples trying to raise children today have benefits that those couples do not receive.

In fact, our situation on healthcare cards in Australia is this: if you are over 65, single and earning up to $960 a week or you are part of a couple that earns up to $1,538.00 per week, you will be eligible for a pensioner’s healthcare card, a senior’s healthcare card or a healthcare card. If you are under 65, single and earning $446 per week or if you are a couple earning $743 per week, you are eligible for the low-income healthcare card. So if you are under 65 it is $446 per week and if you are over 65 it is $960 per week. If you are a family—parents and children—receiving the maximum rate of family tax benefit part A and earning less than $42,560 per annum, you will receive a healthcare card. A family earning $42,560 and a single self-funded retiree on $50,000 get a healthcare card. I do not think it takes a great deal of intelligence to understand that this is somewhat skewed.

The member for Higgins, about whom we have been talking quite a bit lately, indicated while he was Treasurer that we needed to increase our Australian population. I think his phrase about children was ‘one for mum, one for dad and one for the country’. Yet people doing the job for the country that the member for Higgins wanted them to do receive less assistance from us than do self-funded retirees. I do not have any real beef with self-funded retirees. They have done a very good job to be able to look after themselves in their retirement. But I wonder if they are being fair in what they are seeking the government to do to assist them now. I cannot blame them for lobbying for an increase. I think anybody who knows how unions work knows that if you do not ask you do not get. I understand that the reality of their situation today is not as good as it was in 2001 when the current limits were set. But I am sure that if they are being fair they will concede that the increases that were given to them from the 1998-99 budget and in 2001 were very generous indeed. As I said before, those increases were offered in the context of impending 3 October 1998 and 10 November 2001 elections and they would have to be seen by any reasonable observer as vote-buying exercises that probably saved the Howard government in 1998 and would have gone close to making them look a little less shaky in 2001.

The increase that is being sought by the Association of Independent Retirees now would itself be very generous and out of kilter with the indexation that the AIR would like to apply. Since 1994 indexation has increased the rate of the age pension by 77 per cent. Had eligibility for the Commonwealth seniors health card been indexed in 1994 and not changed in 1998 and 2001, the amounts that self-funded retirees would be able to earn now—bearing in mind that in 1994 all income was counted and not just part of income—would be $37,985 for singles and $63,471 for couples, much less than the existing $50,000 and $80,000.

Like all members of this chamber, I acknowledge the contribution made to this country by all senior Australians—the wealthy and the not so well-off alike. I understand the extra pressures that are falling on all Australians as a consequence of the global recession. That is why I unreservedly support the Rudd government’s economic stimulus packages of last December and February this year, which have been designed to cushion the effects of the worldwide downturn on Australia—on our economy, on our wage and salary earners, on our businesses and on those whose vulnerability has been graphically demonstrated. While the situation confronting self-funded retirees has deteriorated, all reasonable people would acknowledge that couples with an annual income of around $79,000 are in better shape today than a working family with children earning around $42,500. Families with an income of over $42,500 do not qualify for assistance with medical expenses, whereas older Australians earning almost twice as much do get this assistance. Perhaps we should be concentrating our thoughts on redressing this imbalance rather than extending it.

I recently had a look at the ‘jobs vacant’ section of the Courier-Mail and at the MyCareer website—not because I am looking to change jobs any time soon but just to see what people get paid these days. In the Courier-Mail on 9 March I noticed the following job vacancies: transport salesperson, with a salary of $45,000; office administrator, with a salary of $40,000; registered nurse, with a salary of $39,000. On the MyCareer website, I noticed these vacancies: jewellery store manager, with a salary of $40,000; pharmaceutical manufacturing technician, with a salary of $40,000 to $50,000; automotive clerk, with a salary of $40,000 to $45,000; travel consultant, with a salary of $40,000 to $50,000.

These are responsible jobs, but all of the people who secure those jobs will earn less than some people whose income entitles them to receive a Commonwealth seniors health card. These people are contributing now, through the tax system, just as retired Australians did in the past. What they have in common with retired Australians is an expectation that they will be able to provide for themselves, through work, a standard of living better than that enjoyed by Australians on government support—after all, it is their taxes that the government uses to provide income support and other welfare measures for those in need. Many of them will be the self-funded retirees of the future, thanks to compulsory superannuation, which was introduced by Labor. Like their counterparts today, they would hope to have a standard of living superior to that provided to welfare recipients by future governments. Like today’s self-funded retirees, who are ineligible for the CSHC because of their income, they enjoy a standard of living better than that of many working families, not to mention those receiving income support.

While I am talking about healthcare cards and self-funded retirees, it is important to note that there are many self-funded retirees with very low incomes indeed. The number of people applying for the age pension rose to about 5½ thousand per week in December and settled back to about 4½ thousand per week in January, which shows that an increasing number of people are becoming eligible for a part pension. And when they become eligible, it is entirely appropriate that they avail themselves of that payment and the additional services that accompany it.

Things do go in cycles, however. In the mid-1990s, people were encouraged to retire early to give younger people access to jobs. But today we are asking people to work beyond retirement age because of skills shortages. We may again be asking people to retire early in the future. A consequence of having asked people to retire early in the mid-1990s is the existence of a number of self-funded retirees who have not yet reached age pension age. I received an email from a constituent in that group in relation to his own circumstances. His income from an allocated pension is at a level whereby he is eligible for, and has availed himself of, a low-income healthcare card—that is, his income is less than $38,600. Remember that he has not yet reached retirement age. He pointed out to me, though, that he and his wife have not been assisted by either economic stimulus package from the government despite their parlous financial situation. The point he made—and it is hard to reject—is that, surely, assistance from the government should be based on individual need. (Time expired)

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