Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Hansard source

Today it is very clear that there is only one party in Australia which cares about pensioners. There is only one party which cares about those Australians who have worked very hard for their whole lives, and saved hard, so that they can feel secure in their retirement. There is only one party which cares about making sure that a fair retirement system exists in this country, and that party is Labor.

Today we have seen a despicable deal done between the Liberal Party, the National party and the Greens party to cut the pension. That is what today's deal is all about—a deal between those three parties to cut the age pension. Of course, it is not the first time that this government has tried to cut the pension. We all remember last year's attempt. Last year's attempt by this Prime Minister and, of course, his Treasurer was to cut the pension for 3½ million Australians; 3½ million Australian pensioners would have seen their pension cut by around $80 a week over the next decade.

This year the government has a new proposal. This year they want to cut the pension by $2.4 billion. And you would not be surprised to know, Madam Speaker, that this Prime Minister and all of those behind him are lying about who is going to be impacted. So today I want to put to bed some of these falsehoods that have been spread by the government again in question time today, and now by their friends in the Greens party.

These deceptions are designed to cover up one key fact, and that is that this is a cut of $2.4 billion to Australian pensioners. The money will come out of the pockets of pensioners. This is what the Prime Minister and his new best friend, the leader of the Greens party, have conspired to do. They have joined forces with the National party and the Liberal Party and, of course, all of them have joined forces to attack pensions and to take $2.4 billion out of the pockets of pensioners.

According to the government this is justified because all of the people who are going to be affected are apparently millionaires. Of course, that is complete and utter rubbish! The government would have us believe that all the pensioners impacted by this cut to pensions are on easy street. Well, we can tell you that that is not the case. We know from the government's own figures that some single pensioners will lose as much as $8,000 a year. These are pensioners with assets of around $500,000 and who have a superannuation income of just $25,000. So people with an income of $25,000 are going to have $8,000 ripped off them by Liberals, the Nationals and the Greens. That is the deal that has been done. That is a quarter of their income; and we know that couples could lose up to $14,000.

This is the important thing that this government has lost sight of—these people are middle-income Australians.

Many of them in fact are very low-income retirees: pensioners who have worked very hard all their lives and saved hard all their lives. They are the people for whom our superannuation system was designed. This is why we designed it the way we did: so that those who were able to save in their working lives could also rely, if they needed to, on a part pension. But this is how hard this government is. The harshest elements will be felt by these very hardworking Australians who have worked and saved so hard for all of their lives. And it is not just people who are already retired; it is people who are planning their retirement, in the 50- to 60-year age group. These are not millionaires who will be affected. None of these people are millionaires. For a couple due to retire in 10 years time the largest impact will be felt below average earnings. That is where the cuts of this change will fall the hardest: on people planning their retirement, in the 50- to 60-year age group, earning below average earnings. This government is taking the knife to their retirement incomes. That is a message that thousands of middle-income Australians will be hearing loud and clear from us over the next weeks and months to make sure they understand that this government is cutting their retirement income.

The detailed modelling that has been done indicates that around 45 per cent of Australians, currently very young Australians, aged between 25 and 29 will not have income sufficient to support a comfortable standard of living because of these cuts. That is the real impact of these changes. Under this proposal, according to the same modelling, eight in 10 single women retiring in 2055 will do so on incomes below that needed for a comfortable standard of living. I want to make it crystal clear. The government's argument is that the only people who will be affected by this cut to the pension are millionaires. That is blatantly wrong. It shows either extraordinary ignorance from the Minister for Social Services, the Prime Minister and the Treasurer about the long-term impacts of this change or—I think more likely—a deliberate fabrication of the impacts. These changes are not just harsh; they are actually also very bad policy.

My colleagues will be very surprised to know that I am going to quote from a previous Liberal Treasurer, Peter Costello. When he changed the taper rate for the age pension in 2007 he said:

The current taper rate of $3.00 means that a retiree loses more age pension than they earn on their additional savings if they do not achieve a return of at least 7.8 per cent a year.

Who is getting 7.8 per cent? This is what he said back in 2007. But of course it was pretty prophetic when you think about the returns that older people can get on their savings today. The Treasurer of the day, Mr Costello, went on to say:

This is currently a large disincentive to save for retirement.

That is what this government is putting in place with these pension changes: not just a cut to the pension but also, to quote former Treasurer Peter Costello, 'a large disincentive to save for retirement'. It is not very often I agree with Peter Costello but on this occasion he is absolutely right. We have already seen pensioners come out publicly and say they know that this will place in front of them a strong incentive to sell off their assets. In fact we heard some extraordinarily dopey remarks from some members opposite yesterday saying to pensioners, 'Just go out and sell down your assets'. Let us see how many of those members write to the pensioners in their electorates and tell them to sell off their assets. Pensioners are already recognising that that is what all of the members opposite want them to do. They are telling them to invest in non-assessable assets like their home or—the worst thing of all—not to save in the first place. These are the consequences of this measure. Pensioners will be forced to sell off their assets—assets that they have worked very hard for and saved for all of their lives. I cannot believe that all of the members opposite do not have pensioners telling them what this will mean for their future.

This measure is not only bad for pensions but also badly designed. Labor will oppose it. The government is not on its own in spreading these falsehoods; the Greens have been at it too. Yesterday we heard the Greens claim that they had agreement to a review of retirement incomes. It did not take long in question time today to hear from the Prime Minister that that was not worth the paper it was written on. There will be no review that is worth anything to the Greens. (Time expired)

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