Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Hansard source

by leave—Since the federation of our nation, Labor has believed in the need for a strong age pension for our country. Labor drove the introduction of the age pension during our nation's first decade, driven by our core Labor belief in a fair society that rewards a lifetime of work and driven by our sense of responsibility to ensure that no Australian is left behind. These Labor values endure, as the age pension in Australia has endured. A century on, more than two-thirds of older Australians receive the age pension. It remains a critical link in Australia's social fabric, ensuring that after a lifetime of work, Australians are supported in their retirement. A century on, Labor continues to deliver for older Australians.

Support and security for pensioners

Two years ago, it was this Labor government that delivered historic increases to the pension and an improved indexation system, to make sure that the pension kept pace with the cost of living. We protected the pension—and provided support and security for Australia's pensioners: support through a significant increase to the pension; security that the pension would keep pace with the cost of living through improved indexation and an increase to the wages benchmark. Australia's age, carer, and disability pensioners, our war widows and widowers, and service income support recipients have received the support of a long overdue and much needed increase to the pension. In September 2009, as a result of our reforms, single pensioners initially received a fortnightly pension rise of $70.83 and pensioner couples combined received a rise of $29.93.

And just as important, Australian pensioners have the security of knowing that they will not be left behind. The age pension will better keep pace with the cost of living through improved indexation arrangements that make pension rates more responsive to the price changes experienced by pensioners. The new pensioner and beneficiary living cost index considers a 'basket of goods and services' that better reflects pensioner consumption patterns than the overall consumer price index. We have also linked the rate of the age pension to a higher wages benchmark. The wages benchmark rate has increased for singles from 25 per cent to around 27.7 per cent of male total average weekly earnings, an increase of more than 10 per cent. This new benchmark is now enshrined in legislation.

Both the pensioner living cost index and the higher wage benchmark are proving their worth in providing greater security for pensioners when prices increase. The fourth regular increase since the historic pension reforms starts today. From today, single pensioners will receive an extra $19.50 a fortnight and pensioner couples combined on the maximum rate will receive an extra $29.60 a fortnight. Over the last two years, as a direct result of pension reform, maximum rate pensioners have received an increase of around $148 a fortnight for single pensioners and around $146 a fortnight for pensioner couples combined.

These historic reforms built on the benefits delivered to Australia's pensioners by this Labor government in 2008. Just months after coming to government, we more than tripled the utilities allowance—from $107.20 a year under the previous government to $500 a year. We also increased the telephone allowance—from $88 to $132 a year. And we helped pensioners during the global financial crisis by making economic security strategy payments to pensioners at the end of 2008.

These increases—like our pension reforms—responded to the real pressures that pensioners face. The government does understand that pensioners need some flexibility in how they pay their bills. We simplified payments to pensioners, combining four allowances into a single, simple pension supplement that is now paid fortnightly. But to increase flexibility for pensioners in balancing their household budgets, pensioners can choose to have some of their pension supplement paid quarterly instead of fortnightly—whatever suits them. To further increase flexibility for pensioners—and to help them meet unexpected costs, like circumstances where their car might break down—we have introduced new arrangements to give pensioners easier access to advance payments, and in the last financial year, around 143,400 age pensioners took advantage of the new advance payment rules.

The challenges of a fixed income, of course, are also faced by self-funded retirees and many carers. Through the pension reforms, the government introduced a seniors supplement paid quarterly to around 280,000 Commonwealth seniors health card holders. We also introduced a carer supplement, paid annually in July, to eligible carers, and now around 530,000 Australian carers are $600 a year better off.

Protecting the pension into the future

This Labor government has delivered these many improvements for pensioners, driven by our belief that a fair society does reward people for their lifetime of work. A lifetime of work is, of course, an enormous contribution. But we know that for many older Australians that contribution does not stop when their last shift ends. Many older Australians do want to continue some part-time work—to pass on some of their knowledge and some of their experience, to make some extra money or to stay involved—and all of these people should be supported.

That is why this Labor government has delivered on its election commitment to older Australians, improving the new seniors' work bonus which allows pensioners who work to keep more of their pay packets before it affects their pension. Eligible age pensioners can now earn an extra $250 a fortnight from paid employment without it being assessed as income under the pension income test. This is on top of the income-free area. Pensioners can now 'bank' any unused amount of the fortnightly $250 work bonus, up to $6,500, which they can then use to offset future employment income. Couples, where both people work, each have $6,500, or a total of $13,000. We have 78,000 age pensioners with employment income who stand to benefit from the work bonus. They get, of course, the benefit of work, and the security of the pension. Labor has been protecting the pension for more than 100 years. We have delivered for older Australians—meeting our responsibility to ensure that no Australian is left behind. We are supporting pensioners today and providing security for tomorrow. Through our pension reforms, this government has built a sustainable pension system. We will continue to deliver pension increases and improvements in a long-term, sustainable way by gradually increasing the age pension age from 2017, rising to 67 by 2023. People will have time to plan and prepare for this change. We will also continue to protect the rate of the pension into the future, by keeping Australian pensioners front and centre of reforms as we look forward to further improvements to the pension.

Pensioners will be supported in this government's plan to put a price on pollution. Under our plan, it is the big polluters who will pay for their pollution—and not pensioners. Under our plan, pensioners will receive household assistance that is more than the expected average price increase from putting a price on pollution. This will be a real and permanent increase to the pension. Pensioners will receive around $338 for singles, and $255 for each member of a couple per year.

Conclusion

This government, like Labor governments before us, is driven by a belief in a fair society that rewards a lifetime of work. We are driven by our sense of responsibility to ensure that no Australian is left behind. These Labor values endure, as the age pension in Australia has endured. A century on, Labor continues to deliver for Australian pensioners. We are providing support and security for pensioners and we are protecting the pension, now and into the future.

I ask leave of the House to move a motion to enable the member for Menzies to speak for 10 minutes.

Leave granted.

I move:

That so much of the standing and sessional orders be suspended as would prevent the member for Menzies speaking in reply to the ministerial statement for a period not exceeding 10 minutes.

Question agreed to.

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