Judi Moylan (Pearce, Liberal Party) Share this | Hansard source

I am pleased to have the opportunity to speak on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009, because the welfare of older Australians and our veterans is of particular concern and interest in my electorate of Pearce. It is clear that the current economic situation is having a great impact on everyone in society. It has created an atmosphere of uncertainty and pain for those who have seen their superannuation nest egg and assets disappear. This is especially true for those older Australians who have spent their entire working life saving for retirement and have in recent times watched as their savings and investments declined rapidly. For those people on fixed, often low, incomes, the situation is especially dire. I think there really is a disproportionate impact on retired folk—people on pensions or self-funded retirement benefits—in the current economic climate because these are people who do not have an opportunity to regenerate income. It is very difficult indeed, and I think this is causing a great deal of distress and a great deal of pressure for many older Australians.

The Commonwealth seniors health card is available to Australians over age pension age—65 years for men and 63 years and six months for women—who are not receiving an age pension and who have adjusted taxable incomes of less than $50,000 a year for singles and $80,000 a year for couples combined. In this day and age, it is not an overgenerous threshold. The bill before the House proposes to amend the income test used to determine eligibility for the Commonwealth seniors health card. The test will be expanded so as to include income from a taxed superannuation fund and income that is salary sacrificed to superannuation.

It is estimated that these measures will cause some 22,000 older Australians to lose their eligibility for the Commonwealth seniors health card. At this point, I think it is important to imagine what it would be like to be one of those 22,000 Australians. These people have worked hard. They have actually been the nation builders and they have saved hard to make sure that they can retire and live independently from government, and not to become a burden on their families. Having contributed to society for many decades, they retire and budget to live off assets and savings that they have accumulated. Then, through no fault of their own, these assets and savings begin to devalue at an alarming rate. Suddenly, their future starts to look uncertain. There are a number of aspects to this I could go into, but it is probably not the forum for detail. In my electorate office and outside the office, I have seen people who are severely stressed because of the decrease in the value of their assets. Then, on top of that, they hear on the news one day that yet another blow is in store: the government, their elected representatives, are looking to take away one piece of assistance that they have enjoyed over the last few years—their Commonwealth seniors health card is going to be taken away from them. This means their medication and doctors bills will skyrocket, they will lose out on countless numbers of concessions and they will have to lead a life trying to balance the books, which will invariably become much harder. As economic commentator Nick Bruining highlighted in this morning’s West Australian, retirees have already been battered by declining investment returns and will be hit even further following a one per cent decline in the deeming rate. Deeming rates have been reduced for the third time since November and it reflects the lower returns available to pensioners.

The Commonwealth seniors health card was introduced in July 1994. It was one of several measures taken by the coalition government to try and give greater equity to people who had saved for their retirement. This card soon provided access to concessional prescription medicines under the Pharmaceutical Benefits Scheme, free hearing aids and certain free basic dental services. The Commonwealth seniors health card was available to people of age pension age who were not eligible for age pension for reasons other than the income test—for example, insufficient length of residence or assets exceeding the asset test cut-off limits. We must remember the original purpose of this card was to provide assistance to retired persons who were on low incomes and, when introduced, the income limits for the card were the same as the income test limits that applied for the age pension. So the vast majority of retired persons issued with a CSHC were those who were asset rich but income poor. Many of these people, such as farmers in the electorate of Pearce, face this problem every day. It is not easily resolved, as you would appreciate, Mr Deputy Speaker Scott.

For those who have been involved in farming all their lives, sometimes it is simply impossible to continue to live on the farm and qualify for any kind of assistance. Also, if they wanted to carve off a small piece of the farm to meet the income and asset test to qualify for a pension, it is made impossible by the planning regulations in the state. So they are caught between a rock and a hard place. For these people, this deals them another blow. These are the nation builders and I do not think we should be making life so much harder for them. This is a significant aspect in the discussion of this bill, in my view. The electorate of Pearce like much of Australia has a vast and diverse range of agricultural and horticultural industries, and the farmers in my electorate, I believe, will be made to suffer again under this new legislation. After working the land tirelessly for decades, helping to build this nation, many will be penalised for the one true asset they have.

When this measure was first announced back in May 2008, it was described as a way to increase fairness. I fail to see that it increases fairness in any way at all. While I could never accept that penalising self-funded retirees in this way could be fair, it does demonstrate just how much the financial context has changed since then. During the last budget, the government assured us that it would still be in surplus—and this is clearly not the case. Just as the government assured us that this would be a fair amendment, the current context means that nothing could be further from the truth. I think the other point to be made is that, back in May of last year, the government estimated that the measure would save $84.8 million over four years. It has become abundantly clear now that this figure is grossly outdated. Anecdotal evidence would suggest that many self-funded retirees have since qualified and started receiving the age pension and there are many seniors who would have been above the threshold in the past but, due to the decline in the value of their assets, should now be entitled to the CSHC.

The National President of the Association of Independent Retirees, Theresa Kot, recently articulated the pressures on self-funded retirees, saying:

The triple whammy of an interest rate cut by the Reserve Bank, falling values for share portfolios and superannuation funds and revised company profits does not give an optimistic outlook for a retiree depending on their retirement nest egg to deliver an income that keeps pace with the cost of living.

This quote is a very good summation of what is facing older Australians in the current economic climate. Back in 2007, while those opposite were throwing around promises—

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