James Stevens (Sturt, Liberal Party) Share this | Hansard source

Unfortunately, a large increase in the pension on the back of indexation is not something to celebrate whatsoever. If the pension is going up by a record amount thanks to indexation, it's because inflation is equally at record levels. The cost of living and the burden on everyone in our society, particularly those on fixed incomes who have to provision very carefully for how they meet the costs in their household and their everyday expenses, means they are really, really struggling. The increase we've seen come through is in an environment where the Commonwealth budget predicts inflation increasing even more dramatically in the future.

The latest ABS figure is 7.3 per cent. The budget predicts eight per cent. All the predictions that are happening around the world at the moment continue to be revised up. We desperately hope that inflation won't increase beyond its current rate, let alone to eight per cent or higher, but unfortunately there is a serious risk in the environment that we're in right now that inflation will potentially be revised up even further. But even at eight per cent that is making it really, really difficult for people on a fixed income and particularly for pensioners.

At the same time, interest rates are increasing. We've had seven interest rate increases in a row, each and every month for the last seven months. Regrettably, in a couple of weeks time when the Reserve Bank meets in December, there is every chance that we'll have an eighth increase. Decisions like that are, again, only putting pressure on the people who find it the most difficult to balance their budgets. That means they have to make serious decisions and sacrifice some of the special things that they do with what discretionary income they've got, if they've got that discretionary income, and that's making things tighter and tighter.

This is a motion that congratulates the government for something that happened automatically through legislation and that has happened for many years. It is right and appropriate that we increase the pension to meet increased cost-of-living burdens on people, but there's nothing pleasant and nothing to celebrate about the fact that the pension has increased by a record amount which is linked to a record increase in the cost of living. As I say, that is a burden that sits disproportionately upon people that are on a very fixed and managed income.

The member for Monash made some important points, in a lateral way, around the need to put a lot more flexibility in place for people on the pension and for senior Australians more broadly, so that they are able to contribute to our economy in a voluntary way—if they want to—without being penalised and without having that impact their eligibility for certain things like the Commonwealth seniors healthcare card. For those that are on the pension, that is providing an increased incentive for them to participate in the economy by taking on work and earning an income without hitting them too early and too hard on the eligibility of the entitlements that rightfully belong to them.

I acknowledge we've made a few steps in that direction recently, which was thanks to important policy announcements that the coalition made during the election, particularly the increase to the entitlement of the Commonwealth seniors healthcare card. Since the election, of course, the opposition has led the debate on increasing the earnings eligibility that should be there for pensioners before it starts to impact on their pension entitlement. What the government has done is a half step towards that. It is temporary, and we certainly think that we need to go further.

But at least we're all talking about the very important need to be supporting pensioners at a time when they have never been doing it so tough because of factors that are completely out of their control, like the costs in their household budget increasing so dramatically. The inflation rate might be 7.3 per cent and it might be increasing to eight per cent or beyond, but we know that there are elements within that, particularly around fuel and around groceries et cetera, that have been increasing even more significantly. That's putting a huge burden on them, and Labor are now saying they're getting a 56 per cent increase in their electricity bills over the next two years. This pension increase is nothing to celebrate. We want to increase the pension, but more importantly we want pensioners to not have to face these dramatic cost-of-living pressures that they're enduring under Labor.

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