Luke Simpkins (Cowan, Liberal Party) Share this | Hansard source

I would like to rise to speak on this motion about the indexation of British pensions, and thank the member for Kingston for raising this important issue. I believe it is the second time that she has put a motion on the Notice Paper about this. As I recall, I also spoke on this matter back in September 2008, but I have raised it again in more recent months in an adjournment debate in this place.

The member for Kingston made mention that the Australian government had been pursuing the British government in recent years with regard to this matter—this injustice. But I was properly informed by the member for Pearce just then that former Howard government minister, Senator Jocelyn Newman, made repeated representations to the British government in pursuit of this matter. And so, I guess that, if anything, what we can say is that this has been a matter where there has been bipartisan support over many years. The trouble is that it has been unsuccessful bipartisan support over many years.

One of the main responsibilities of government is of course to look after those people who have worked in the interests of the nation. However, the British government have had this policy over many years. I believe it was the Attlee government that first had this policy, and successive British governments have followed it, to the benefit of the British taxpayer, obviously. The current British government, like previous British governments, has been unwilling to move on this matter.

When I last spoke on this, which was just two or three months ago, I did the right thing: I called the deputy British high commissioner to tell him that I was going to say some things about the British government and that they were not going to be kind. After I made those comments, I then also asked him if he would pass those on to the British government, and he told me that he would and he did. It is right for us to not only be prepared to go on the record here but also follow it up and make sure our criticism of the policies of, in this case, the British government, reaches them so that they are aware that their former citizens, those drawing pensions from their country, are represented here and so that the problems and inadequacies of British policy with regard to British pensioners here are highlighted.

Unfortunately, the circumstances of this injustice—the indexation of British pensions—remain the same and continue to have a negative impact on so many former UK residents, including a number from my electorate of Cowan. As is the case with most allocated pensions, the British pension scheme is indexed for increases to the cost of living. This in effect makes sure that, in real terms, the pension retains the same purchasing power over time. This method of indexation is applied to British pensioners who have moved from the United Kingdom to most other countries. The problem is that that is not the case in Australia. In my view and the view of British pensioners in Australia, the British government is refusing to honour what is nothing short of an obligation to those who have made contributions to the National Insurance Fund. Instead, the pension ceases to be indexed from the point at which the pensioner migrates to Australia. The indexation of the British pension is permanently frozen on the date the person leaves the UK for Australia or the date of the granting of the pension, whichever comes first. UK pensioners in Australia are required to rely increasingly on Australian income support because of the UK government's indexation policy, and that means that the value of the UK pension reduces over time and, as has previously been said, it has not in the past been made up by the Australian taxpayer.

I certainly completely disagree with the policy of the UK government and add my voice to calls for the UK government to change that and index the pension—to do the right thing. There are some 555,000 British pensioners worldwide, about half of whom apparently live in Australia and whose British pensions are frozen. Many of these British migrants have contributed to our great country. When travelling through my electorate, I often speak to British migrants are now residing in Cowan and, although they are happy in Australia, I am regularly told about how they are being disadvantaged in the pension payments they receive from the United Kingdom's National Insurance Fund because they migrated to Australia. Britons often leave the UK to join their children, grandchildren or other immediate family members in Australia and by doing so they face a major inequity in their pension payments. Some of these people actually served their country in World War II, putting their lives on the line and suffering the privations of the war years.

In return for their service and their hardship, they were hoping for secure support, and that is not being provided.

As I previously said on this matter, in Australia 190,000 British pensioners who are permanent residents here receive a means-tested Australian age pension to top up their unindexed British pension, at an additional cost of $100 million a year to the taxpayers. But this cost to Australian taxpayers would not be required if the British government applied the same indexation that it has in place for Europe and the United States. The UK government's position on the indexation is not only selective but discriminatory against certain countries such as Australia. As I mentioned, the Australian government is left to subsidise some of those left abandoned by the UK government. However, of the approximately 250,000 British age pensioners in Australia, only 190,000 are citizens or permanent residents and therefore able to access the support of Australia. That still leaves more than 60,000 British citizens who are not Australian citizens but are living in Australia without any assistance or support.

We are constantly reminded that the cost of living is increasing, and with this government's determination to prosecute the carbon tax it is only getting worse. Pensioners are struggling to be able to afford their basic living costs when costs are rising and the pension remains the same. The gap is worsening, and the British pensioners are right in the middle of this. This has been made very clear to me in the past through conversations with Shirley De Andrade and the President of the British Pensions in Australia group, Jim Tilley. From the British pensioners group's autumn 2012 newsletter, one statistic really stands out, and that is the estimate that the UK budget is some 3.1 billion pounds better off in 2012 as a result of so many expatriate pensioners living elsewhere, which the British Pensions in Australia group lists as an offset to the cost of re-indexing their British pensions. It is disturbing that the British Treasury already takes that benefit, resulting in its perception of re-indexation as being a cost to it. So it is both unjust and wrong that the British government is varying the level of support it gives depending on where its pensioners live.

It is clear that the British pensioners are highly motivated on this issue, and each time the cost of living rises the inequity of their situation becomes worse. I remember hearing a story back in 2008 from Mr Beyfus, who served in the Royal Navy and received a small pension for his armed service as well as a 20 per cent disability pension for that same service as a result of a back injury. It is interesting to note that both those pensions are indexed, yet he took the age pension in 1995 and he estimates that the 80 pounds that he got then has not moved since. It is estimated that he would be around 30 pounds better off in indexation were paid. So it is a shame that the UK government is happy for Australia to top up the UK pensions while not trying to advance the issue at all.

In conclusion, I would like to reiterate my view that the British government should acknowledge the contributions that these people have made to their country and index their pensions rather than letting the taxpayers of Australia and other countries pick up the cost for their obstinacy. I also note that this motion is something that has bipartisan support. It is not just a Liberal or Labor position; it is something that we all agree on on behalf of our constituents. So I join with the member for Kingston in calling upon the UK government to redress the injustice that they have created and have continued to ignore for many years. It is time for true indexation to take place, and it is about time the British government got on with fulfilling their obligations.

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