Paul Neville (Hinkler, National Party) Share this | Hansard source

It is a pleasure to speak in the debate on the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009. I represent the electorate of Hinkler, which is very much a lifestyle electorate. It is extraordinarily popular, with people moving to the area. I have 21,000 constituents on the pension and the highest profile of constituents above 65 years of age, so it should be no surprise to the parliament that I take a profound interest in the matter before the House tonight.

I have been following this issue for some time. In the last year of the Howard government I raised on a number of occasions in the party room increasing the single pension because it was becoming increasingly evident at that time that there was quite a problem in the aged community. Pensioners in particular but also some self-funded retirees were having a number of difficulties. People would come to my office and tell me that it was getting increasingly harder to pay rates, maintain a car and pay the gas and electricity bills and that the price of fruit and vegetables had gone up as a result of the drought and the increase in the price of petrol added to the running costs of the car. Of course, some country areas do not have a public bus system. That is not the case in the city areas of Bundaberg and Hervey Bay, but in other parts of my electorate it was markedly difficult. So I welcome an increase in the pension, and I particularly welcome an increase in the single pension.

I will be totally honest with the House: I did not favour the pre-Christmas bonus that the government put out. I wanted to see that money go to pensioners. I thought the mix was all wrong. I thought it would have been much better to have paid a bonus of $500 to singles and $750 to couples and then put the remaining amount of the money that had been put aside for those bonuses into an immediate increase in the pension, because the one thing pensioners said to me as part of these interviews was: ‘We want certainty about this.’ Had we gone that way, by now pensioners probably would not be looking at $30; they would be looking at a pension topped up by around $40.

I did predict at the time that, by the time we got to actually handling the pension itself, six months or more would have slipped by. And that was the case, because the government was not going to do anything, having given out all that money at Christmas and then more recently with its other infrastructure package. The government was not going to give out any more money before the budget. On top of that, I knew that, when they did do it, it would have to be debated—as indeed we are debating it tonight and it would then have to go into the social security system and adjustments would have to happen as we moved toward September—the September-March adjustments. A lot of this will not come into full effect until September. So, rather than getting something in December on a permanent basis, to see the total fulfilment of this measure pensioners will be waiting nearly nine months. In these economic times, that is pretty tough going, and I do not think it values the Australian pensioner nearly well enough.

Yes, $30 will be welcome and it goes some way to correcting this problem of the single pensioner trying to keep up with the pensioner couple. I do not want to make it an us-and-them debate, but it is clearly obvious that it costs you almost as much to maintain a house for one person as it does one for two—to pay the rates, to pay gas and electricity, to pay maintenance on the house and so on. Certainly, other things, like food, would be cheaper. But what the government has proposed that I do agree with is taking the single pension up to 66.33 per cent of the couple pension.

However, again, I would have approached it in a different way. I think what I would have done would have been to also increase the couple pension slightly. In real terms the couple pension has not increased. There has been a $10.14 increase in the pension supplement, and that will be welcome. That is much more than the $2.49 for the single pension supplement. I am not discounting the value of that. And I realise that, had you given a couple pension a straight pension increase, you would have had to approach getting up to this 66 per cent level in another step, in perhaps September this year or March next year. I thought that would have been better, because with no increase at all in the couple pension we have fixed up part of the agenda—the single side—but we have left the couple pensioners a little bit behind. I think if we had taken this in two steps, with an increase in the couple pension, it would have gone down better. However, I am not decrying the fact that the $30 will be welcome.

If you look at the overall pension supplement now, the increase of $2.49 for the singles takes them up to $1,462 a year and the increase of $10.14 for the couples translates to $42.30 week and a gross amount for the year of nearly $2,200. I think that is helpful, and it rolls in a lot of payments of previous governments and things like the GST supplement, the pharmacy allowance, the utilities allowance and the telephone allowance—with due consideration, of course, to internet. In one respect that might be tidier, for people who can budget. For people who do not, it does pose some difficulties. But I think the government have foreseen that, in that they are going to allow half the pension supplement to be taken as a quarterly payment. I hope I have this right. I did some work on this. It occurred to me that the single pensioner would get a cheque of about $182.50 a quarter, give or take a dollar or so, and the couples would receive about $275 a quarter. For people who have trouble with budgeting, or who want to have a built-in form of saving, I think that would be quite good. But bear this in mind: for the couple pensioner to do that their weekly amount will actually slip back. What they will receive now will actually have slipped back from what they were receiving before. Sure, it will catch up over time. With the single pensioner, the large increase, and taking half, should not have the same impact.

The government has moved to three different forms of assessment. It has often been said by the opposition, including the last speaker, that we did nothing for pensioners. That is patently untrue. Pensioners are probably about $40 a fortnight better off now than they would have been had we stuck to the old Keating model, because we introduced a MTAWE factor of 25 per cent and, with CPI, whichever of those two had the highest rating for that period was taken as the benchmark and added to the pension. The government has introduced a third level. They have called it the ‘living cost index for age pension households’—a fairly convoluted name. In short, it focuses in on those particular items that would affect a pension household and not a lot of the generalities that appear in the CPI that probably are quite irrelevant to pensioners. So the pension will be adjusted in future on whichever of these three scales is the greater. I think that is fair enough. That is accepting the principle of the previous government that you go to the highest measure in helping pensioners. That will be fully implemented in March 2010. Overall, I think the opposition welcomes aspects of this.

When we go to the taper test, however, an element of mean-spiritedness seems to have crept into the government’s agenda. Previously, we had been easing the taper test. That was an encouragement to pensioners who wanted to work, especially those who wanted to work part time—to be able to earn an amount of money over and above the limit that was set, be they a single or a couple, and to retain 60 per cent of what they earned. In other words, they paid 40 per cent to the government.

Under this measure, we have slipped back. We have gone back to fifty-fifty again. I think that shows a mean streak and it runs contrary to what the government is professing to do in this social security bill. I find that a bit bewildering. I sometimes wonder—and I do not say this intending any offence to my government colleagues—whether you change the names and some of these programs just because they were the Liberals’ or the Nationals’ ideas.

Let me give you an example: the co-contribution payment for superannuation. It is very generous. It was 150 per cent. For every $100 that someone put in, the government put in another $150. You have reduced that to 100 against 100. Why? Why would you do a thing like that? Isn’t the whole idea of that to give people on very modest incomes—and there are a lot of people there, lower and middle income people—a chance to build a nest egg that gives them some dignity in their later life? And the bonus for the government is that they are less dependent on the pension. So why would you try to stop that? Is it just because you wanted to change what the Liberals and the Nationals put in place in the last government? This taper test is another example.

Then we had a bonus scheme. If people worked beyond 65, you could get up to around $33,000 if you did the whole five years. Certainly there was a carrot and stick in that, but a lot of people found that very appealing—that they could have a nest egg of $33,000 when they reached their 70th birthday. I could stand corrected on this, but I understand that people on that scheme will be grandfathered until that scheme is finished. In the short time we had to prepare for this debate, I could not clarify that. If they are to be grandfathered, then I think that is probably fair enough.

But you have replaced it with what I think is a very bureaucratic sort of measure. That is this work bonus. If you work on, up to a maximum of $500 per fortnight, or $250 per week, you will only be assessed on half of that for the income test. It is certainly a positive step in one sense, but I think it is not as tidy. It is a lot messier than the other bonus scheme, to my way of thinking. The other scheme really gives you something substantial when you get to 70, whereas I suppose this one would be helpful if it suits you to do a certain number of hours a week, but I do not think it is quite as tidy as the other one.

In the remaining minutes, I want to talk about the increase in the age for the age pension. In effect, that will become the benchmark for retirement. Everything over time will probably spin off that. As a member of parliament, I do not particularly want to tell my fellow Australians that the time is coming when people are going to have to work beyond 65. But, if we are honest, we have to realise that at present there are five working Australians for every pensioner, every welfare recipient. By 2040—and that is only 30 years away—it will be 2½ working Australians for every pensioner. That is scary. You have to make provision for these things early. For that reason I am, somewhat reluctantly, going to support the government’s measure.

I think that Australians are much healthier than they were when the retirement age of 65 was introduced. You only had seven or eight years left after that, based on the longevity figures when it was introduced. The mortality rate was much higher. Medicine, drugs and a better quality of living have come to Australia over the years. We live to much riper old ages. We really have to ask, for many of us: ‘Well, what will we be doing when we are 65, 85, 90 or even older? Are we not capable of making a contribution not only to young Australians but to other retiring Australians that follow us?’ I think this is a very important issue.

I believe a measure should be put in place because a lot of people work very hard, especially in the building industry—brickies, construction workers and so on. There are people who work in rural industry, shearers and so on, whose backs give out at an early age. People who work in rural industry throughout Australia have very tough lives and I can well understand that they would want to retire at 65. So I propose—this is not necessarily the coalition’s position; it is just my suggestion—that we reintroduce a mature age pension that would be available to people like that between the ages of 62 and 67 so that, when their physical abilities had started to fail, albeit that they were not disabled or invalided in any way, and they could not get a job or found it very difficult to do that heavy sort of work, there was an escape hatch for them. I believe a mature age pension for people from 62 to 67 is the answer.

On that note, I support the bill. I think there are a number of little mean measures in there that diminish it in a lot of ways. I think it could be improved, and I hope it is improved, in subsequent budgets.

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