Linda Burney (Barton, Australian Labor Party, Shadow Minister for Families and Social Services) Share this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. I 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 notes the Coalition Government has repeatedly tried to cut the pension, including pensioner concessions, the assets test and indexation, and attempted to increase the pension age to 70".

The Pension Loans Scheme lets older Australians get a loan from the government to supplement their retirement income. It is an important program, offering older Australians another option for improving their retirement income. Established in 1985, the scheme is a legacy of the Hawke government. But take-up rates for the scheme have been low, primarily due to a number of barriers to access. These barriers are well known and have been known for the nine years of this government. They include: not being accessible to all older Australians who own their home; the complexities of the loan scheme being difficult to understand and navigate; a lack of safeguards against securing excessive debt; high interest rates on the loans; and cultural concerns Australians have around protecting the family home in retirement, and family inheritance.

In the 2018-19 budget the government announced it was finally moving to introduce legislation to address the low take-up rate. Labor welcomed and supported the changes, and take-up rates did improve—moving from 780 participants in 2018 to over 5,000 participants in September 2021. But this improvement is against a potential pool of around four million Australians of age-pension age, including around two million pensioners who own their own home. So this result is not good enough. Many pensioners are asset rich but cash poor. They are struggling to make ends meet and would benefit from options offered under the scheme. Many older Australians living in retirement homes have contacted me to say having access to this scheme would make a big difference to their quality of life. The government's actions demonstrate they know just how far short their previous efforts to improve this scheme have fallen.

This bill introduces two new features to the scheme. Firstly, it introduces a new safeguard: the no negative equity guarantee. This will prevent the Commonwealth from recovering the amount of the debt exceeding the value of the asset. Secondly, it allows participants to access a portion of their payments annually as a lump sum advance. This change will help older Australians to make larger purchases such as extra support or to make home modifications. These are improvements to the scheme, and Labor welcomes them. They are changes that could and should have been made earlier.

The government committed in the last budget to a campaign to raise awareness of the scheme. Crucially, they have kept secret just how much they plan to spend on this campaign. I think every Australian would have questions about this government spending an unknown amount of public money on advertising during an election year. This is a government that thinks of ad campaigns first and policies second. That's why this measure comes up with a branding effort, changing the name of the scheme from the Pension Loans Scheme to the Home Equity Access Scheme.

At MYEFO, the government further reduced the interest rate, to a level more in line with other mortgages: 3.95 per cent. Labor supports the reduction of the interest rate, but it comes way too late. Participants have been paying interest rates higher than almost every other mortgage across Australia for years. Worse still, Labor knows these higher interest rates have been indirectly contributing, as a savings measure, to the government's budget repair policy. These are savings made off the back of older Australians, including full-rate pensioners, and Labor believes the changes in the bill are another job half done and another missed opportunity to fully address all the well-known and identified barriers that stop pensioners taking up this scheme and improving their quality of life in retirement.

The University of New South Wales's analysis shows that, whilst these changes will make a modest difference, much more work remains to make sure access is easy for those who need it. Too many older Australians in retirement homes and other communities have no access to this scheme. This lack of access is unfair. Addressing this will take some work—work that a government which cared about making a difference instead of an announcement would already have done.

Pensioners won't be fooled by the government's half-hearted attempts to support them. They know that this is a government that has tried to cut the age pension and reduce the living standards of pensioners at every opportunity. In fact, to improve the budget bottom line, this government has tried to cut the pension and increase the pension age to 70 in almost every one of its nine budgets, including the three budgets where the current Prime Minister had the job of Treasurer.

In the 2014 budget, they tried to cut pension indexation, a cut that would have meant pensioners would be forced to live on $80 a week less within 10 years. This unfair cut would have ripped $23 billion from the pockets of pensioners in Australia, affecting every single pensioner. In the 2014 budget, they cut $1 billion from pensioner concession support that was designed to help pensioners with the cost of living. Also in the same budget, they axed the $900 senior supplement to self-funded retirees receiving the Commonwealth seniors health card. In the 2014 budget, the coalition government tried to reset deeming rate thresholds, a cut that would have seen 500,000 part pensioners made worse off. In 2015, they did a deal with the Greens to change the pension asset test and cut the pension to around 370,000 pensioners by as much as $12,000 a year. So many part pensioners lost their pension because of this coalition-Greens saving measure. 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 showed this would have left over 563,000 Australians currently receiving a pension or an allowance worse off. Over 10 years, in excess of 1.5 million pensioners would have been worse off.

On top of all this, the government spent five years trying to increase the pension age to 70. They waited four years before adjusting the deeming rates for age pensioners, despite the Reserve Bank continually reducing its rate for the same period, another indirect saving measure for the government. The coalition still have cuts to pensions in the parliament. They want to completely take the pension supplement away 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 requirement from 10 to 15 years.

Spiralling out-of-pocket healthcare costs are a big concern for older Australians. These have increased because of the Medicare freeze put in place by the coalition government, and no-one spends nine years, including three as Treasurer, trying to cut the pension and increasing the pension age to 70 unless it is what they really believe in. Pensioners know they can't trust the Morrison-Joyce government if they are to protect their living standards and act to offset the rising costs of living.

In conclusion, the coalition have gone through three leaders in their nine long years in office. No matter who the leader has been, cutting your pension has been an enduring priority. Cutting the pension is in their DNA. But Labor's support for older Australians is unswerving, so we welcome the changes in this bill and we will not stand in the way of the bill. We have moved a second reading amendment. We will support older Australians, and our support is unswerving, as I've said. We welcome the changes in this bill and the interest rate reduction announced at MYEFO, but more work is needed to enable all older Australians of age pension age to access the scheme, untap the equity in their homes to improve their retirement income, and enhance their quality of life.

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