Andrew Nikolic (Bass, Liberal Party) Share this | Hansard source

As usual, the member for Shortland is about five minutes behind the conversation. I welcome the opportunity to speak about this bill, because this bill improves the lives of a range of Australians, with a particular focus on the self-funded retiree community. It is a community that rarely gets a lot of thanks for what it does for our country. By virtue of being either fully or partially self-funded, these retirees make an enormously valuable contribution to our country and to the budget bottom line.

Often when we speak on bills in this House, we speak of technical details and provisions and the effects the bills will have on people around the country. What I would like to do is to frame my remarks in relation to this bill as more of a thank you—a thank you to those men and women who have saved and sacrificed to the point where they are able to look after their own needs in retirement.

On a number of occasions in the last few years I have had the pleasure of addressing large groups of retirees in my home town of Launceston, some self-funded and some partially self-funded, who belong to the Association of Independent Retirees. I acknowledge in particular President Graeme Barwick of the association for inviting me to speak to large gatherings of the association, many of whom I continue to interact with. These self-funded or partially-self-funded retirees tell interesting stories of lives well lived, of enterprise and sacrifice, where they put things like private health insurance ahead of other priorities in their lives, and they put the education of their children and savings and thrift ahead of consumption and expenditure during their lives. They put it ahead of things like holidays and luxury items.

One couple I encountered, whose story I thought was particularly relevant to the debate we are having this afternoon, has run a small business for most of their adult lives. They have now stopped working, they have liquidated most of their assets, and after almost 50 years of toil and effort they have paid off their mortgage and have just over $800,000 in assets for their retirement. Just as they have been careful to save and economise during their working life, they were very careful to ensure that, after retiring, these funds would last for as long as possible. These are not sophisticated investors willing to risk their nest egg on complex financial instruments. They wanted to keep their money safe, so they looked for the best term deposit. Currently, that is earning around four per cent. On $800,000, at four per cent, they earn about $32,000 in interest on their next egg. They are not rich people, particularly when you consider that, today, the maximum basic pension for a couple, with the pension and energy supplements, is just over $33,000. These people are earning $32,000, while a couple on the maximum rate of pension for a couple, with the pension and energy supplements, is receiving just over $33,000, or about $1,000 more than this couple earn from their interest payments each year. The income of these self-funded retirees will diminish over time as they draw down on their own capital. Their income over time has the potential to be even lower. So I say thank you to this couple, who are part of a diverse range of people, most especially Australian seniors, who have done much to make this country the very best in the world. I thank them for their sacrifice, for making provision during their working lives for their retirement, and for alleviating pressure on the public purse. My hope is that this bill will provide practical support to them and others, helping them to enjoy their later years.

This bill is founded on wide consultation, reflecting the fact that the coalition is listening to and is prepared to keep listening to the views, opinions and ideas of this influential group. The aim of the measures in this bill is to continue to contribute both morally and materially to improving the general fabric of contemporary Australian society, with a particular focus, in this instance, on self-funded retirees. This laudable purpose includes three important objectives. First, to amend the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to annually index the income test thresholds for the Commonwealth Seniors Health Card to movements in the Consumer Price Index. Secondly, it will align provisions in the Student Assistance Act 1973, in relation to the operation of the Social Security Appeals Tribunal, with those in the Social Security Act and related legislation. Third, it will amend four related social assistance acts.

In addition, the bill moves to ensure that a further range of acts are amended, including definitions pertaining to social security law, so that they accurately reflect the machinery of government, most particularly the new Department of Social Services.

I would like to focus on what is the most important element of this bill, that which pertains to some of Australia's most deserving and all too easily forgotten seniors. I have given one example of a couple that fall into the category of self-funded retirees. The seniors health card assists selected seniors with the cost of prescription medicines and other health services. The card is targeted at self-funded retirees of age pension age who do not qualify for the age pension because of their level of income or assets. It also provides card holders with access to the seniors supplement and clean energy supplement payments.

In response to an earlier question from the member for Shortland, I informed her that, as of March this year, there were 933 people in my electorate of Bass who received the Commonwealth seniors health card. It was staggering to me that the member for Shortland did not understand how many people in her electorate were eligible for the Commonwealth seniors health card. I can tell her: in March 2014, there were 1,538 people in the electorate who were eligible for the Commonwealth seniors health card. It should be a lesson to the member for Shortland not to ask questions she does not know the answer to and, more importantly, to understand her electorate better, because this will not have escaped her electors. She stands up and asks a question of me that I know the answer to, but she herself does know the answer to the same question as it relates to her electorate.

In parallel with the seniors health card but clearly distinct and separate from it is the age pensioner concession card, which provides its holders with different and broadly more generous entitlements to those received by self-funded retirees. Future eligibility for a seniors health card requires a number of conditions to be met. They must be permanent residents in Australia; they must have attained pensionable age; and they must have an adjusted taxable income of less than $50,000 for singles, less than $80,000 combined for couples and less than $100,000 combined for couples who are separated, for example, by illness or due to respite care. Importantly, there is no assets test for the Commonwealth seniors health card.

Collectively, the conditions in the bill help it to be clear, transparent and fair. As a reward to these people for a lifetime of saving, which means that they are not reliant on the public purse, we provide services and discounts. These include things like bulk-billed GP appointments, which of course are at the discretion of the GP; a reduction in out-of-hospital medical expenses; discounted rail travel on Great Southern Rail services—the Ghan, Overland and Indian Pacific; and additional health, transport, education and recreation concessions which may be offered by state and territories, local governments and private providers to Commonwealth seniors health card holders.

An important theme addressed by this bill is whether or not to maintain the income thresholds over time by indexing them to cost-of-living changes. Most income test thresholds for social security benefits are indexed, as are the rates of payment for most income support and supplementary payments. To date, as the income test thresholds for the Commonwealth seniors health card have not yet been indexed, their real value continues to decrease over time.

The coalition made a commitment at the 2010 election to index the income thresholds for the seniors health card, stating, `Indexing these thresholds to inflation will allow recipients of the Commonwealth seniors health card who maintain their incomes in real terms to continue to be eligible to receive the seniors health card.' So we will provide Australian seniors with further peace of mind regarding their healthcare costs by indexing eligibility for the card.

As I said in my introductory remarks, Deputy Speaker, given global financial events in recent years, it should be patently clear that many self-funded retirees are in fact not wealthy; rather, they find themselves under increasing financial pressure. This is most particularly the case in the context of the recent global financial crisis, especially if retiree income was, and remains, dependent on the full recovery of offshore equity markets, or indeed any international investment class or asset. For the many so affected, the last five years or so have been rather grim. Moreover, the coalition's view remains    that, having done the right thing and actively saved for retirement, many seniors should not now—or in the future—be made to live in fear of losing their entitlement because of modest changes in their retirement income. Indexing the current income thresholds so that they do not erode in real terms will allow more self-funded retirees to access the card. Through this bill, the coalition is actively honouring both the letter and the spirit of its election commitment to Australian seniors.

This bill supports an improvement in the lives of many Australian senior citizens and does so in a way which is intended to be fair, clear and consistent. Furthermore, the government is being as generous as it can be at this time, given the wider national need for fiscal restoration and recovery made so essential by the dereliction of duty of our Labor predecessors.

Contrary to some vocal and mischievous commentators, the government has both a heart and a strong social conscience. This is matched by a strong desire to help, assist and support all seniors—both pensioners and self-funded retirees alike. Where the latter are concerned, it is true that some have been financially fortunate through both circumstance and opportunity. But, equally, many more self-funded retirees have made their twilight years comfortable by dint of sheer hard work, and we want to help them.

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