Linda Burney (Barton, Australian Labor Party, Shadow Minister for Preventing Family Violence) Share this | Hansard source

I rise to support this bill and move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes that:

  (a) this Liberal and National Government has spent the last five years trying to cut the pension and increase the pension age to 70;

  (b) in every Budget, this Government has tried to cut the pension—including a plan to change indexation, which would have left pensioners $80 a week worse off; and

  (c) the Government did a deal with the Greens political party to change the pension assets test and cut the pension for 370,000 pensioners; and

(2) condemns the Government for spending years trying to cut the energy supplement to new pensioners"

The Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018 changes the way pooled lifetime income stream products are means tested. It increases the amount of money pensioners can earn from employment, under the pension work bonus, an initiative from the Rudd Labor government. This bill increases the rate at which pensioners can draw down their assets under the Commonwealth's reverse mortgage program, the Pension Loans Scheme—a legacy of the Hawke Labor government—and opens up the Pension Loans Scheme to full-rate pensioners. This bill seeks to expand on important Labor legacies which expanded income streams for our pensioners.

To that end, Labor supports the changes to the work bonus. The work bonus provides an incentive for pensioners who are over pension age to participate in the workforce by allowing them to keep more of their pension when they have earnings from working. The work bonus functions by exempting a certain amount of income from the pension income test, above the pension income test free area. Currently the work bonus exempts the first $250 of fortnightly employment income. This bill will increase the income exemption to $300 per fortnight, with a commensurate increase to the work bonus income bank from a minimum of $6,500 to a maximum of $7,800.

The bill also expands eligible employment income to include self-employment. In 2009, as part of the Harmer pension review, the Rudd Labor government introduced the pension work bonus to replace the cumbersome Pension Bonus Scheme. Labor introduced the work bonus to encourage older Australians who are able to do so to stay in the workforce longer. This brings with it social and economic benefits, not just for individuals but also for our nation. Older Australians have incredible skills and experience. It is important that those who can and want to remain in the workforce on a part-time basis can do so without losing as much of their pension. This will also help Australians save for the future—something that is incredibly important to our ageing population.

Labor also supports changes to the Pension Loans Scheme, which is the government's voluntary reverse-mortgage scheme. The Pension Loans Scheme is a legacy of the Hawke Labor government to allow older Australians who own their own house to access additional income. In 1996 the Keating Labor government expanded eligibility to those who were previously ineligible by reason of the income test. So today, to be eligible for the Pension Loans Scheme, a person must (1) be of pension age, (2) own real estate in Australia and (3) receive a payment at less than the maximum rate of the age pension because of either the income or the assets test, but not both.

Currently only part-pensioners and self-funded retirees can access the Pension Loans Scheme. This locks many full-rate pensioners who own their own home out of the benefits of this scheme, and this is unfair. Labor welcomes the improvements to this scheme to open it up to full-rate pensioners. We also support the increase in the maximum fortnightly payment rate under the Pension Loans Scheme from 100 per cent to 150 per cent of the full pension rate. This will allow pensioners to enjoy a better standard of living by accessing the equity in their homes if that is what they want. Full-rate pensioners will be able to increase their income by up to $11,912 for singles and $17,958 for couples per year based on the current rates of the pension. While the take-up rates of the Pension Loans Scheme are currently low, it is an important option for older Australians, and this increase in the allowable rate of payment might just make it more attractive for more older Australians.

The changes proposed in relation to the pooled lifetime income stream products are very important to those considering putting their savings into this kind of product, which pays an annual sum for a person's life. It is a difficult decision to make a trade-off between keeping savings and securing an ongoing income, and people need certainty. Importantly, anyone who has purchased a pooled lifetime income stream product under the current means test will be grandfathered—an important point—and there will be no changes for them. It is important not just that the proposed means-testing arrangements are fair but also that the products themselves are sound and that people will be protected from rip-offs and shonks.

Labor supports the smoothing of the means test, which is also supported by COTA Australia and other seniors groups. And we will be holding a blowtorch to the government to make sure that the right financial regulations and protections are in place to protect pensioners who are considering purchasing a lifetime income stream. We will be very closely monitoring the kinds of products that are offered and the protections that are in place to make sure that people understand all the consequences of the long-term trade-off that comes with purchasing a lifetime income product.

As the banking royal commission has exposed, too many financial products have been crafted in the interests of brokers and banks, not ordinary Australians, and Australians know that this government will do anything it can to protect the big banks. The Prime Minister and the Liberal Party cannot be trusted to implement the recommendations of the banking royal commission—and, as has been mentioned and will continue to be mentioned, they did vote against the banking royal commission 26 times and they want to give the banks a tax cut. We should be changing the laws straightaway to clean up banks, but the Morrison part-time parliament is sitting only 10 days in eight months. The Leader of the Opposition has written to the Prime Minister urging him to hold two extra sitting weeks so that the Prime Minister can start cleaning up the banks now. The Liberals tried to stop the royal commission from happening. They will now try to go soft on the banks and will go slow on implementing the reforms. They cannot be trusted.

The Senate inquiry into this bill identified particular concerns related to the government's go-slow on the comprehensive income products for retirement framework, including a need to finalise the disclosure regime related to legislation and ensure that people get proper advice that is in their interests before purchasing a lifetime income stream. We will ensure that adequate financial regulations and protections are in place to protect older Australians. We will monitor very closely the types of financial products that are offered, and ensure that protections are available, so that consumers are fully aware of the financial and broader implications of those products.

Labor welcomes these positive changes and improvements to Labor initiatives which were enacted to make life easier for older Australians. But, make no mistake, pensioners will not be fooled: cutting the pension is in the Liberals' DNA. The age pension will always be stronger and safer under a Labor government. For five years the Abbott-Turnbull-Morrison Liberal government has spent every budget attacking the age pension. The current Prime Minister has spent five budgets, including three as Treasurer, trying to cut the pension. He has spent five budgets, including one as the Minister for Social Services, trying to raise the pension age to 70.

In the 2014 budget, the government tried to cut pension indexation—a cut that would have forced pensioners to live on $80 a week less within 10 years. This unfair cut would have ripped $23 billion from the pockets of every single pensioner in Australia. In the 2014 budget, they cut $1 billion from pensioner concessions—support designed to help pensioners with the cost of living. In the 2014 budget, they axed the $900 seniors supplement to self-funded retirees receiving the Commonwealth Seniors Health Card. In the 2014 budget, the Liberals tried to reset deeming rates thresholds—a cut that would have seen 500,000 part-pensioners made worse off. In the 2015 budget, the Liberals did a deal with the Greens to cut the pension for around 370,000 pensioners by as much as $12,000 a year by changing the pension assets test. In the 2016 budget, they tried to cut the pension for around 190,000 pensioners as part of a plan to limit overseas travel by pensioners to six weeks. In the 2016 budget, they also tried to cut the pension for over 1.5 million Australians by scrapping the energy supplement for new pensioners. The government's own figures show that this would have left over 563,000 Australians currently receiving a pension or allowance worse off. And over 10 years, in excess of 1.5 million pensioners would have been worse off. On top of this, the government spent five years trying to increase the pension age to 70. And they still refuse to adjust deeming rates for pensioners.

The Liberals still have cuts to the pension before the parliament. They want to completely take away the pension supplement from pensioners who go overseas for more than six weeks, which will see around $120 million ripped from the pockets of pensioners. They still want to make pensioners born overseas wait longer before qualifying for the age pension by increasing the residency requirement from 10 to 15 years. Labor has fought these cuts tooth and nail; this is the only reason the Abbott-Turnbull-Morrison government has flip-flopped and given in. The truth is: no-one spends five years—including three as Treasurer and one as social services minister—trying to cut the pension and increase the pension age to 70 unless it is what they really believe in. This is why pensioners know they cannot trust Scott Morrison. There is one simple fact: no matter who leads the Liberal Party, cutting the pension is in the party's DNA.

Over the past five years, we've seen older Australians wait longer and longer and longer to receive their pensions under the Abbott-Turnbull-Morrison Liberal government. We have read, heard and seen that pensioners wait months for their pensions, pushed to the edge of their bank accounts and pushed to desperation, uncertainty and fear. We have heard of pensioners waiting for hours on the phone to Centrelink, desperate to speak to someone about the fate of their pension payments. All the while, the Abbott-Turnbull-Morrison Liberal government has cut Centrelink jobs and outsourced them to labour hire firms.

Australians will not be fooled, and they will not forget the Liberals' atrocious record and attitude towards pensioners and older Australians. The Abbott-Turnbull-Morrison Liberal government has made it very clear that big banks, big business and the top end of town are its priority, not pensioners. The age pension will always be safer, stronger and more accessible under Labor.

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