Cathy O'Toole (Herbert, Australian Labor Party) Share this | Hansard source

The Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018 makes some positive changes for our pensioners. It was less than a year ago that I met with a Townsville pensioner named Tom. Tom, although retired, was still very active and was still able to work part time. Tom would rebuild broken bicycles and do paid handyman jobs here and there. Clearly, Tom's work schedule and pay would fluctuate. The difference would often be minuscule, but it would be enough to affect Tom's pension. This is where the system was very difficult for him. Tom still wanted to be able to work and earn a bit of cash, but he certainly required his pension. A few dollars here or there, when the limits were already so incredibly small, would affect Tom's pension. It did. This bill seeks to make changes to help pensioners like Tom.

This bill changes the way pooled lifetime income stream products are means tested; increases the amount of money pensioners can earn from employment under the work bonus before their pension is reduced; increases the rate at which pensioners can draw down their asset under the Commonwealth's reverse mortgage program, the Pension Loans Scheme; and opens the Pension Loans Scheme to full-rate pensioners.

The changes to the work bonus in particular will assist people like Tom. The bill will increase the income exemption under the work bonus from $250 per fortnight to $300 per fortnight, with a commensurate increase in the work bonus income bank from a maximum of $6,500 to a maximum of $7,800. Also, the bill will expand eligible employment income to include self-employment. These are positive changes that will encourage older Australians to stay in the workforce longer, with all the social and economic benefits that brings not just for individuals themselves but for the nation as a whole. Older Australians have incredible skills and experience, and it is therefore important that those who can and want to remain in the workforce on a part-time basis can do so without the losing as much of their pension.

The changes to the Pension Loans Scheme will also provide great assistance to our pensioners. The purpose of the Pension Loans Scheme is to allow older people who are asset rich but cash poor to access an income. Currently, to be eligible for the Pension Loans Scheme a person must be of pension age; own real estate in Australia that can be used as security; receive a payment less than the minimum rate of the income or assets test but not both—this test can apply to a partner; and meet age-pension residency requirements. Currently, only part-pensioners and self-funded retirees can access the Pension Loans Scheme. This locks out many full-rate pensioners who own their own home from the benefits of the scheme. This is unfair, and Labor welcomes the government's changes to open the scheme to full-rate pensioners.

I 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. This will allow pensioners to enjoy a better standard of living by accessing the equity they may have in their homes. Full-rate pensioners will be able to increase their income by up to $11,912 for singles or $17,958 for couples combined, per year, based on the current rates of the pension. While the current take-up rates of the Pension Loans Scheme are very low, it is an important option for Australian pensioners. The increase in the allowable rate of payment might make it more attractive to many more older Australians.

Then there are the changes proposed in relation to the pooled lifetime income stream products, which are complex. 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 dishonest operators. That is why Labor supports the smoothing of the means test, which is also supported by COTA Australia. But we will be holding to account the Morrison 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. I want assurances around the kinds of products that are offered and the protections in place to make sure people understand all of the consequences of the long-term trade-off that comes with purchasing a lifetime income product.

As the banking royal commission has exposed, far too many financial products have been crafted in the interests of brokers and banks and not ordinary Australian citizens. Australians know 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, because they voted against that banking royal commission 26 times and they wanted to give big banks a tax cut. We should be changing the laws straight away to clean up the banks, but the Prime Minister's part-time parliament is sitting only 10 days in eight months and that makes it a bit difficult. Given these facts and the fact that the Prime Minister, Scott Morrison, is a good friend of the banks and not the Australian people, I am sceptical and will be holding them to account if they allow financial institutions to run riot under the changes in this bill.

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 the need to finalise the disclosure regime and related legislation and ensure that people get proper advice that is in their interests before purchasing a lifetime income stream. Clearly, the LNP government's go-slow approach on this framework, as well as the recommendations from the banking royal commission, potentially allow for unscrupulous behaviour. Enough damage has already been done by the Morrison government delaying the banking royal commission that I call on them to not use the same approach for this framework.

Although there are positive changes in this bill, pensioners won't be fooled by this LNP government. Cutting the pension is in the Morrison government's DNA. They have tried in every single budget—including in three budgets where the current Prime Minister had the job of Treasurer—to cut the pension and to increase the pension age to 70. In the 2014 budget they tried to cut pension indexation—a cut that would have forced pensioners to live on $80 a week less within 10 years. This is unfair and unjust. It 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 the deeming rates thresholds—a cut that would have seen 500,000 part-pensioners worse off.

In 2015 the Liberals did a deal with the Greens to cut the pension of around 370,000 pensioners by as much as $12,000 a year by changing the pension asset test. In the 2016 budget they tried to cut the pension of around 190,000 pensioners as part of a plan to limit overseas travel for pensioners to six weeks. In the 2016 budget they also tried to cut the pension of over 1.5 million Australians by scrapping the energy supplement for new pensioners. The Morrison government's own figures show that this would have left over 563,000 Australians currently receiving a pension or allowance much worse off. Over 10 years, in excess of 1.5 million pensioners would have been worse off. On top of this, they spent five years trying to increase the pension age to 70. They still refuse to adjust the deeming rates for pensioners.

I feel as though I need to take a breath after going through that long list of LNP cuts to pensioners, but the sad fact is the cuts don't stop there. 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. This 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 requirements from 10 years to 15 years.

Labor has fought these cuts tooth and nail. No-one spends five years, including three as Treasurer, trying to cut the pension and increase the pension age to 70 unless it is what they truly believe in. This is why pensioners know that they cannot trust Prime Minister Scott Morrison or his government. There is one simple fact: Prime Minister Scott Morrison was the architect, the designer, the engineer, the craftsman and the builder behind every cut and every attack on Australian pensioners. Pensioners know that with another term of a Morrison government, there would be more cuts on the way which will impact on them. It is only Labor that has fought against every single cut to pensioners, and it is only Labor that will look after Australian pensioners.

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