Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise in support of the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. The bill before the House introduces a fairer system for eligibility for the Commonwealth seniors health card. The card was introduced by the Keating government in 1994 to assist those who did not qualify for the age pension and reflects the Labor Party’s long-term commitment to looking after the aged members of our community. It is available to people who have reached age pension age with an adjusted taxable income below $80,000 for couples and $50,000 for singles. It is not asset tested. It does not apply to people who receive a social security pension or benefit or a service pension. The card enables many seniors on lower incomes to access health care and medicines which they could not otherwise afford.

It is certainly a very popular initiative. Certainly, in my meetings with the Moorooka senior citizens association in my electorate and my visits with the Salisbury senior citizens association and also with other seniors in my electorate, I have heard people say time after time how important it is to structure your finances wherever possible just to get one dollar inside that threshold so that you are able to access the health care and medicines. I have here a copy of my latest newsletter, Mr Deputy Speaker, which I am sure you would be keen to read. There are two photographs here: one is of Jean Burns from the Salisbury and District Senior Citizens Welfare Association, receiving a medal, and the other is of Cheryl Nott, also from the Salisbury senior citizens association, receiving an award. Cheryl Nott is receiving an award from Lady Killen, James Killen’s widow. It is an award I initiated this Australia Day, recognising people who work in the community. Certainly, in my talks with the people at the Moorooka senior citizens association and the Salisbury senior citizens association, they often say how important it is to structure their finances just a dollar below the 80 grand or $50,000 to be able to access these benefits.

I understand that there are currently about 280,000 cardholders who are able to receive much cheaper medicines, with scripts filled for $3.60 through the Pharmaceutical Benefits Scheme. Cardholders are also entitled to bulk-billed GP appointments and transport and education concessions in some states. They also have access to the seniors concession allowance, a payment of $128.50 every three months to help with regular utility bills; and a telephone allowance of $23 every three months.

The bill before the House amends the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 to implement the budget measures to change the means-testing criteria for the Commonwealth seniors health card. It is expected to generate around $84 million in savings over four years. Some superannuation incomes from a defined benefit scheme, such as for Commonwealth public servants, and some state government funds are treated as income. However, income from some super funds and account based pensions are no longer taxable and so are not currently counted as income for the Commonwealth seniors health card.

This bill ensures that all seniors are treated the same, no matter how they receive their income. For example, the income test for the card will be changed to include income from a superannuation income stream with a taxed source and income that is salary sacrificed to superannuation. It is a much more common-sense approach. It would be like tapping a millionaire on the shoulder down at the soup kitchen and saying: ‘Hey, mate, you don’t really belong here. This is not geared for you.’ It is really about closing a loophole, and obviously the line has to be drawn somewhere. This is about making sure that the line is accurate.

For the purposes of Commonwealth seniors card eligibility, these income streams—such as income from super and salary sacrificed income—will be treated the same as taxable income, employer provided benefits, foreign income, net rental property loss and net financial investment loss. As is now the case, no asset test will apply to the Commonwealth seniors health card eligibility. That would mean that, if you were, say, a retired merchant banker living high in a penthouse at Point Piper, it would not be considered when making a decision about your healthcare card and being able to access those requirements. Importantly, an individual of age pension age who receives less than $50,000 and a couple of age pension age who receive less than $80,000 a year from superannuation will continue to qualify for the card. For example, a single person of age pension age who receives $22,000 gross employment income and a gross annual superannuation pension, with a taxed source of $27,000, will be assessed as having an adjusted taxable income of $49,000 and will continue therefore to qualify for the card.

These changes are important to ensure that the eligibility-testing system for the CSHC is fair and equitable. It also ensures that the Commonwealth seniors health card is available to self-funded retirees on lower levels of income, those who need it most. As I said earlier, it is certainly reported to me regularly that seniors ensure, if possible, that their affairs are restructured so that they can access this health card—and good luck to them. I commend them if they are able to do so.

I think most people would agree that people who derive their income from different sources should have the income test applied to them in a similar way. I note the comments of MLC’s head of Technical Services, Andrew Lawless, who told the Australian the other week:

In a broad sense the legislation is trying to level the playing field so that when it comes to government assistance programs, tax offsets and various levis like the Medicare levy, that people will be treated equally.

He went on:

When you look at it, why should someone who has the ability to package their income better get more family assistance and pay less tax than someone who doesn’t have that ability to package?

That is the same question before the House. We on this side of the House believe that all income should be treated the same. It is very important that, in 2009, we get the trajectory right. We need to get the proportion right in determining such things. As I said, it requires drawing a line somewhere. If we are going to have an economically sustainable future—and obviously both sides of the House would be supportive of that—we need to consider the situation very carefully.

Mr Deputy Speaker, I will take you to some figures that I have in front of me. These figures look at a number of factors. One factor is where the costs are for health care. By way of a round-up, if you were under the age of 15, back in 2002-03, it cost about $1,000 a year for health care. If you were aged, say, 15 to 34, it cost about the same, $1,000 a year. If we move on to age 55 or 64—I am not sure whether there is anyone in the House of that age—it was getting close to costing about $3,000 a year in healthcare costs. If you move on to age 65 to 74 then it got close to $5,000. From age 75 to 84, it cost up to $7,000 and age 85 and over, up to about $8,000 a year. Obviously, that reflects common sense, that most healthcare costs occur towards the end of someone’s life. Incidentally, one of the reasons why I am so opposed to euthanasia is that I am always worried that people might tap grandad on the shoulder and say, ‘The medical bills are going to start piling up, Grandad; maybe you could do us all a favour.’ That is what I mean when I say that we have to get the trajectory right. Some other data here says:

Ageing alone is estimated to push up health expenditure from $170 billion to $210 billion by 2045, an increase of 25 per cent.

That reflects those figures: the older we are, the more health costs we have at the end of our life. I would like to quote from a source, which I do not have in front of me, obtained from Guy Woods, a senior researcher in the Parliamentary Library, which says that, as a proportion of GDP, the increase is from 8.1 per cent to 10.3 per cent. That is why it is so important that we get this trajectory right. Maybe I should declare a self-interest here. In 2045, I will be 79, so it is important that we have a health system that is able to be supported. Looking at some other data that summarises it much more simply, when I was born in Australia in 1966, approximately 100,000 people were over the age of 85. By the time I am 85, in 2047 or so, there will be more than 1.6 million people over 85. These are phenomenal figures, demonstrating an incredibly ageing and changing society. That is why we need to get this trajectory right.

I am aware that around 20,000 self-funded retirees will lose their Commonwealth seniors health card as a result of their superannuation income and that a further 2,000 will lose their qualification once their salary sacrifice contributions to superannuation are added to their income. Obviously, I understand that that is very tough for such people. They certainly have my sympathies when they have structured their finances with different considerations. However, as I have stated, it is important that we do get the trajectory right. I understand that these people will be disappointed with the change. However, to be fair and to ensure that government assistance is going to where it is most needed, we must take into account that they receive ongoing tax-free treatment of their super payments after the age of 60. I do apologise to these people, especially those living in my electorate. Obviously, good government is about making the right decisions, not just the easy decisions and the easy political calls. We do need to make some tough and right decisions.

These new income assessment criteria ensure that everyone is treated equally. Ironically and unfortunately, in deference to my former boss, Michael Quinn, with the onset of the global financial crisis and the sudden fall in superannuation funds, many self-funded retirees who have suffered a drop in income may now be entitled to the age pension or Commonwealth seniors health card.

This legislation before the House is difficult legislation to talk about, especially in the light of many of the speeches that have come already from those opposite. It is easy to run the old class war spiel and say that that is what has motivated this. Obviously, that is not the case; it is about treating the Australian public sensibly rather than running away from a political problem. I thank the Minister for Families, Housing, Community Services and Indigenous Affairs for introducing this legislation. It is a fair and balanced approach, and I commend the bill to the House.

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