Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Hansard source

I rise to join with my coalition colleagues in speaking against the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. This bill seeks to toughen eligibility requirements for the Commonwealth seniors health card, or CSHC, from 1 July this year by including superannuation drawings from a tax fund as taxable income in the CSHC income test. This will affect many of Australia’s 278,000 CSHC holders, with approximately 22,000 people to lose their entitlement to the card.

The current approach is that the CSHC is available to seniors who, although they are of pension age, do not receive an income support payment from the government, provided that their adjusted taxable income falls below certain limits. Currently, the threshold limits are $50,000 for singles and $80,000 for couples living together. Significantly, the adjusted taxable income payment does not include non-taxable drawings from a tax fund on which a contribution tax was paid when the funds were being accumulated—in other words, a taxed fund.

The income thresholds for the CSHC are not indexed in any way and have not been altered since 2001. The Australian Association of Independent Retirees suggests that, since this time, there has been an increase of approximately 20 per cent in the cost of living, but there has been no associated increase in the income threshold for the CSHC. Effectively this legislation will strip benefits away from 22,000 non-wealthy, self-funded retirees, with estimates indicating that these seniors will be at least $2,000 a year worse off under this new scheme. This will affect access to many government benefits, including cheaper prescribed medications. CSHC holders currently pay $5.30 per script but would face charges of up to $32.90 per script. Under the PBS safety net the threshold for CSHC holders is $318, but some would face a threshold rise to $1,264.90, after which they would still have to pay $5.30 per script. This would also affect the seniors concession allowance, which helps pay for essential services; future seniors bonus payments—in 2008-09 there was a payment of $500; the telephone allowance, which is $34.60 every three months; and a whole range of other benefits such as bulk billing, transport and household facilities.

It is not surprising that the National Seniors Association and the Association of Independent Retirees, or AIR, are against these changes, as they would detrimentally affect many non-wealthy, self-funded retirees who have prudently planned for their retirement with little dependence upon the government of the day. The AIR has raised issues about the lack of clarity about withdrawals from superannuation funds being included as income. The AIR president, Theresa Kot, has raised concerns about the inclusion of lump sum withdrawals in the expanded income test, which would mean that if a senior makes a one-off withdrawal to buy a car or to pay a bond to enter an aged-care facility it would be treated as income, which would potentially disqualify them from the CSHC for that year. Centrelink has advised the AIR that they will reinstate the card if you can show proof that the one-off expense was necessary, but still the AIR is understandably uneasy about these proposals.

My electorate has one of the oldest demographics in Western Australia, with a large retiring population. There are approximately 5,500 CSHC holders who could potentially be affected by these changes and they are very nervous. I have been contacted by the Peel branch of the AIR, who are extremely active advocates for self-funded retirees in the electorate of Canning. They are strongly against this legislation, which may have a big impact on Canning’s CSHC holders. I will certainly be reminding them of what the government is doing to their future.

I am contacted by both pensioners and self-funded retirees on almost a daily basis. They raise concerns about the strain on their household budgets caused by increases in the cost of living over the last few years, coupled now with the decrease in the value of their investments. These changes will have a drastic effect on Australia’s non-wealthy self-funded retirees, who have already seen the value of their assets dramatically decline over the last year through no fault of their own.

Let us look at Labor’s approach to seniors. This is yet another in the long line of policy changes that the Rudd Labor government has introduced but did not mention at all prior to the last election. However, this measure is hardly surprising in light of the Labor government’s overall approach to seniors in general. The ongoing delay in respect of increasing the base rate of pensions is just one example of the indecision of the Rudd Labor government which is hurting elderly Australians. You will recall we endeavoured to bring a bill to this House to increase the rate of the age pension, and the Labor Party would not let us debate it.

On 22 September 2008, we did introduce into the Senate a bill designed to immediately increase the age pension by $30 per week. This proposal also applied to recipients of the widow B pension and recipients of the single service pension. Despite the Prime Minister and the Minister for Finance and Deregulation both admitting they, themselves, could not live on the current rate of the pension, the government would not support this bill. How mean!

The Harmer review has now responded to the government. However, not only has this report not been made public but still no action has been taken by the Labor government in relation to this matter other than a few words saying that they would look at in the budget. Media reports have also indicated that the Rudd Labor government may be considering other changes that will drastically affect senior Australians, including changes to the assets test to include the family home, as well as to the assets test taper rate. In comparison, the coalition introduced many proposals of direct benefit to senior Australians. Under the Howard government, we introduced amendments which saw 85 per cent of seniors of age pension age qualify for either CSHC or pensioner concession cards in recognition of the extreme importance of the benefits they provide. More broadly, in 1997, the coalition government linked the age pension to growing incomes—in other words, 25 per cent of the MTAWE, in addition to the CPI, whichever was higher—as well as introducing the utilities allowance currently available to CSHC holders and age pensioners to assist with the cost of bills such as gas and electricity. Additionally, in 2007 the coalition government passed legislation to change the assets test taper rate from $3 to $1.50 for every $1,000 of assets above the allowable assets limits. It also removed the tax on superannuation benefits paid from a tax fund for people aged 60 and over from 1 July 2007.

All of these measures, and many others introduced by the coalition, sought to improve the quality of life for Australia’s pensioners and self-funded retirees in recognition of the contribution that these people have made to Australia throughout their lives. And so we should.

Finally, I am pleased to speak against this bill, as it would have a detrimental effect on non-wealthy—I repeat: non-wealthy—self-funded retirees in my electorate and across Australia who are already doing it tough as a result of the global economic crisis, which is no fault of their own. We are the party for the battlers. The Labor Party only talk about it. It is about time the Rudd Labor government gave our seniors a fair go and came clean about their plans to change the government’s assistance for Australian seniors.

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