Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

Twice today I have had to listen to contributions by the opposition that were full of complaints and no real solutions. As usual, there was no recognition or admission of the fact that they were the ones who put the budget in such bad shape in the first place. I am proud to stand here and say that this government is focused on building a better, stronger and more sustainable pension system for all Australians who require that support.

I will assist those opposite with a couple of basic facts. The current base asset test threshold for a single homeowner is $202,000. Under the proposed measures in the Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015 that asset test threshold will increase to $250,000 before they start to receive any reduction in their age pension. For a couple who own their own home currently the asset test threshold is $286,500 and under the new proposed limits it will be $375,000. They are two examples of how, through an increase in the bottom tiers for the asset test threshold assessment, we help those at the lower end of the income scale who are receiving significant pension payments. The end result will be a significant number of part pensioners moving from the part pension to the full pension. The arguments of those opposite were, as usual, hollow.

I am proud to support the Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill. As I said, it is focused on creating a fair, sustainable and better targeted pension system for the future. More than 90 per cent of pensioners will be better off or have no change to their pension under these measures. Additional assistance will be provided to about 170,000 people with modest assets, particularly nonhomeowners who are currently affected by the asset test. The base threshold for a nonhomeowner currently affected by the asset test is $348,500. The base threshold will increase to some $450,000 with these proposed changes.

Importantly, there will be no change to the existing asset test exemption for the family home. Only people with significant levels of assets other than their home will see their pension reduced. The shadow minister touched on someone who has $1 million of assets who will lose about $5,000 in their pension. That represents about 0.5 per cent of their assets. There is no doubt that they can accommodate that reduction in their pension through utilising the assets they have accumulated, particularly in superannuation where they have received significant tax advantages over their lifetime. The whole purpose of the superannuation system is to provide an income stream and capital to fund retirement incomes.

I think this is a tremendous step in the right direction in creating long-term sustainability for our pension system. There are also a number of other measures in the bill that look to improve the longer term sustainability. These measures include changes to the defined benefit income stream assessment, the proportional payment of pensions outside of Australia, the asset test and concession card, the seniors supplement, the pension education supplement and the education entry payment. I notice that the minister, when she was at the dispatch box, touched on those last two, but at the end of the day people who want to go and study have access to support through VET FEE-HELP and a number of other measures that then do not require those supplements in duplicate.

In addition, the pensioners who lose the pension entitlement as a result of these changes will automatically be issued with a Commonwealth seniors health card indefinitely without having to meet the usual income test requirements. The government, in introducing these changes, obviously will not be proceeding with the indexation changes. From 1 January 2017, the government will rebalance the asset test parameters by increasing the asset test free area and taper rate. The budget changes to the asset test mean that the majority of pensioners in Forde with modest assets will be on average $30 a fortnight better off or have no change to their pensions. This is a measured and fair change. Around 170,000 pensioners in Australia with moderate assets will receive a full or increased pension, with many changing from part to full pensions as I alluded to earlier. At the end of the day, as I have already touched on, it is the pensioners with substantial assets, who have already received significant tax benefits through the superannuation system, who will be affected by these changes. People who change to a no-pension situation will also continue to receive the healthcare card for those under pension age.

From 1 January 2016, with these measures, the government will ensure a fairer portion of the superannuant's actual defined benefit income is taken into account when applying the social security income test. A 10 per cent cap on the income that can be excluded from the test will be introduced excluding in military defined benefit schemes. This will result in an increase in the accessible income for people with a deductable amount greater than 10 per cent for the purpose of determining the rate of income support the person receives.

Another measure that will create a fairer and more measured age pension system for Australians is reducing the length of time a recipient can be paid the age pension and a smaller number of other payments outside of Australia at the full rate. From 1 January 2017, this schedule will reduce from 26 weeks to six weeks for the period in which the age pension can be paid outside of Australia at the full means tested rate. After six weeks the payment will be adjusted according to the length of the pensioner's Australian working life residence.

I am pleased that as a result of these changes we will see many pensioners in Forde receive an increase in their age pension benefits from 2017. I also note with interest the former minister's reference to a large increase in the pension when they were in government. That was tied to the introduction of the carbon tax, and it was this government that repealed the carbon tax but also left that pension increase in place.

I would also like to reflect on some further comments that the former minister has made that their refusal to back our changes is based on advice from consulting firm Rice Warner. This is the same organisation that made a submission to the Tax white paper, calling for the part pension to be phased out. I did not hear those opposite speak about that. They also call for the inclusion of the family home in the pension test if it is worth over $1.5 million. I am pleased to say that we are not doing that. They also say that if couples have more than $500,000 in assets they should lose the pension entirely. I am pleased to say that the minimum threshold at which pension will cut out is some $547,000, the upper threshold for couple non-homeowners is a bit over a million dollars and the policy for couples is $823,000. Rice Warner, who seem to be the source of their information, even go on to argue that, if people lose income but still have a valuable home, they can choose to downsize it to access the pension, effectively forcing someone to sell their home. As usual, the Labor Party has been exposed. They should do some policy homework before they start lecturing the government on pensions. Instead, they are voting to deny an average $30 a fortnight pension increase to some 170,000 Australian pensioners with modest assets. ACOSS backs this policy as do others. It has been well received by the members of the crossbench and key stakeholders and it will receive the support in the Senate. Labor are upset that once again they have been made irrelevant and are suffering from relevance depravation syndrome. It is good to see the Leader of the Opposition here as well. What we are not going to do is tax superannuation any more than it is already taxed. The government position on super is crystal clear. We will not be taxing it, unlike those opposite, who want to tax your super.

We understand the difference between superannuation that people have built up through their own savings and the pension as a welfare payment. We understand they are very different things. Before the 2007 election, Labor told Australians, 'We won't touch super—not one jot or one twiddle.' But Labor could not be trusted. They made 12 different changes to super in government, ripping $9 billion out of people's savings, and they are going to do it all over again. Rebalancing the asset test and assessable income and continuing pension increases at the highest inflation or wages mean that our government is looking after pensioners today and age pension recipients in the future. I commend this bill to the House.

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