Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

When I was last speaking on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009, I pointed out the stark contrast between the opposition and the government in relation to the way we have treated seniors, pensioners and carers. The position we have had from this government is one where we have made positive and genuine contributions to their wellbeing, knowing that they have been doing it tough in the economic climate that we are in. This is in stark contrast to the position that we have had from the opposition benches. There was the confected anger some months ago demanding that pensions be increased, that ‘something had to be done about the pensions’ et cetera, continually going on, trying to make a cheap political point.

In fact, with the passing of time we can see that it was a desperate last gasp from the former Leader of the Opposition to try and hold onto his position, and that was all it was. There was nothing more to it than that at all. What we have seen since that time and since the passing of that particular opposition leader—they have moved on to another one—is that the support that was there initially for the government’s stimulus package in October, which provided some welcome relief to pensioners and carers, has been walked away from by the opposition. It is suddenly something that is no longer good. It started as a position of support. They then got to a position where they had some doubts about it, and they have ended up in a position where they are just outright opposed to the stimulus package that was introduced.

On this side, we are firmly there with seniors. We are firmly there supporting seniors and making sure that they are looked after in our communities, because they play such an important role in our communities. When I was speaking last time, I was going through some of the important roles that they play in my community in Dobell and just how important they are for the community there on the Central Coast. I mentioned the important role that the Toukley Senior Citizens Centre plays. That was the largest senior citizens centre group in the Southern Hemisphere and had at its height around 6,000 members. Today it has slightly less than that, but it is a tremendous senior citizens centre where people are involved in all sorts of community activities, keeping their minds lively but also contributing positively to the community at Toukley and on the Central Coast.

From about the age of 17, I have been actively involved in Meals on Wheels. While I was 17 and doing it, the majority of people who have been involved in Meals on Wheels are, again, seniors. They are older Australians who in most cases are no longer working, and they make a tremendous and active contribution to the wellbeing of others in communities all around Australia by giving up their time so that they can help those who need assistance more than themselves. It is a tremendous role that these senior citizens play. On the Central Coast we have no shortage of senior citizens who are involved in the Meals on Wheels organisation. It is something they should be congratulated on and admired for.

Seniors in my community also play a tremendous role in developing business and helping the local economy. The business enterprise centre, something that this government funded from the Commonwealth for the first time, is something the previous governments totally ignored even though they said they were for business and they were for small business. In my electorate, where small business employs vastly the highest numbers of people, the former government was found wanting in relation to its support for the business enterprise centre. Nonetheless, what we find at the business enterprise centre is that there is an extremely active program of mentoring. The mentoring that takes place comes from senior citizens in the community, many of whom have had extensive time in business, who are prepared to give up their time on a voluntary basis so that they can help contribute to growing businesses on the Central Coast. Businesses are the lifeblood of the economy in many regions around Australia, and particularly in my area. It is a vital contribution that they make.

Going to some points in the legislation, a key point of this legislation is that it enables income for seniors to be treated similarly. It is important that this takes place, that there is a similar assessment in relation to the way in which we treat people. If we look at the background of this Commonwealth Seniors Health Card, it was introduced in 1994. It was initially intended to assist those people who did not qualify for an age pension due to lack of residence qualifications or the value of their assets. In 1999 eligibility was based on an adjusted taxable income test to allow more people to qualify for the card. Adjusted taxable income comprises the following: taxable income, which includes superannuation income streams from untaxed sources such as defined benefit scheme pensions; net rental property losses; targeted foreign income; and employer provided fringe benefits. The current qualifying income limits for the cards are less than $50,000 a year for a single person and less than $80,000 a year for couples combined. Indexation of these income thresholds was abolished by the previous government in 1999.

The Seniors Health Card entitles the holder to discounts on prescription medicines through the Pharmaceutical Benefits Scheme, bulk-billing with participating doctors and reduced out-of-hospital medical expenses above the threshold set through the Medicare safety net. In some cases, the card also gives access to local, state and territory government and private provider concessions, such as discounted transport, education and recreation. At the Commonwealth level, cardholders are entitled to certain cash payments—notably the Seniors Concession Allowance, which was increased from March 2008 to $500 a year and is now at $514, paid quarterly, as part of the government’s delivery of its election commitments. This is a government that is delivering for seniors; a government that is delivering for pensioners. Cardholders also received an Economic Security Strategy payment in December 2008, valued at $1,400 for singles and $2,100 for couples combined.

We have legislation that is important to be passed. There is a stark contrast between the position of the government in relation to seniors, carers and pensioners and that of the opposition. We have the opposition adopting its policy based on party room politics as to where a particular argument will get them on the reshuffling and continuously moving opposition front bench—and as to which particular leader they are going to back this week. In contrast, on this side of the House we have government policy that firmly and clearly has the interests of pensioners, carers and seniors front and foremost in terms of the way in which we proceed on these issues. I commend the bill to the House.

Chris Pearce (Aston, Liberal Party, Shadow Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

To follow on from some of the comments of the honourable member for Dobell, he talks about a stark contrast. In relation to this bill there is a very stark contrast, and that is that the government of Australia, his government, will rip the Commonwealth Seniors Health Card off 22,000 Australians. That is the stark contrast. As the member for Dobell leaves the chamber, I say to him: will he go to the Toukley Senior Citizens Club and will he explain to all of those people in the Toukley Senior Citizens Club who lose their Commonwealth Seniors Health Card why he has voted for 22,000 of them to have their card taken away?

This bill, the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009, in essence proposes to introduce an income test that will now include income from superannuation and include income that is salary sacrificed to superannuation in the income assessment. As the shadow minister for superannuation, I have to say that it beggars belief that the Australian government would be undermining Australians putting money into superannuation, but that is what they are doing through this bill. The Australian government are effectively saying to Australians, ‘If you put money into superannuation, if you are prudent and if you save for your future, we will punish you by moving the goalposts, taking away the Commonwealth Seniors Health Card.’ So no longer are the Australian government saying to the Australian people, ‘Please do what you can to save for the future; please do what you can to make yourself prosperous for the future so that you can have a good standard of living in your retirement.’ The government are no longer saying that. What they are saying is, ‘If you put money into superannuation and if you earn money from that superannuation investment, we are now going to punish you by taking away Commonwealth rights under the Commonwealth Seniors Health Card.’

It beggars belief that any government would ‘disincentivise’ Australians to provide for their future. Why would they do that? Why would the Australian government say to the Australian people, ‘Don’t worry about your future anymore, because if you have been prudent enough to do that, we’re going to punish you’? What this bill will do if it is passed is to take away the concession card from 22,000 senior Australians. That in itself is a considerable concern, of course, but what is even more concerning is that, really, I think it is obvious that this is only the thin end of the wedge, because in relation to superannuation there are very interesting developments happening right now, and superannuation is a key part of this bill. Madam Deputy Speaker Burke, I know that you are very supportive of superannuation and that you will find it very difficult to justify to the seniors in your electorate why this government is taking away the Commonwealth seniors health card from them.

We see this as very much the thin end of the wedge, because, in relation to senior Australians—in particular, self-funded retirees—and the whole issue of superannuation, we read this morning in the media that the government are now considering axing the superannuation co-contribution scheme that helps low-income Australians. Why on earth would they also want to punish low-income earners? We have this piece of legislation wanting to punish senior Australians, and the government is thinking about axing superannuation co-contributions for low-income earners. Not only that; the government is also contemplating increasing taxes on superannuation investments across the board.

It is a very concerning development that the Kevin Rudd government is, all of a sudden, starting to punish Australians for doing the right thing. For years and years, this parliament and governments of all political persuasions have encouraged Australians to invest for their future. That has been a very central bipartisan approach. Governments of all persuasions have wanted Australians to set aside funds for their future. That is a good and prudent thing to do, and it is a wonderful thing if an Australian can work throughout their life and provide for their future by themselves. It is a marvellous thing. But here is a bill before the parliament today that is now going to punish people for having done the right thing.

What needs to happen is for the government and the Prime Minister in particular to come into the parliament today and guarantee that no senior Australian is going to be worse off into the future, because we have these very concerning emerging developments happening in relation to senior Australians in and around the area of superannuation. The pension review is also going on. We hear of very concerning developments coming out of that about what the government might have in mind in relation to many aspects of the pension. We need to make sure that no Australian is going to be worse off under this government going forward, and that is something that I think should concern all of us.

One of the main aspects of this bill is in relation to the threshold limits that are being adjusted. At the moment, threshold limits are $50,000 for singles and $80,000 for couples living together. This refers to adjusted taxable income and does not include non-taxable drawings from a superannuation fund on which contribution tax was paid when the funds were being accumulated. If this bill goes through the parliament, those threshold limits will remain the same and superannuation drawings from a tax fund will remain untaxed, but those drawings that people have taken will be added to a person’s adjusted taxable income for the purpose of assessing eligibility within the threshold limits. This is at a time when all superannuants across Australia have been suffering average annual losses of up to 20 per cent, and in some cases more, so people’s savings have been plummeting. At a time when people are losing money on their superannuation investment, the best that the Australian government can do is to come into the parliament and introduce a bill that is going to punish and slug 22,000 senior Australians even more. Talk about a double whammy! On the one hand you have people losing money on their investments because of what has been happening, and on the other hand the government is now going to rip away some entitlements from them. This is a double whammy—two things happening at once.

What is concerning is that many of the affected Australians will have planned their retirement in a very prudent and methodical way. They may have got professional advice on what to do. What do we find now? The goalposts are being shifted without any proper explanation. Certainly, Madam Deputy Speaker, you will know, like me, that there was no discussion of this whatsoever prior to the last election. So the goalposts are now being moved, and they are being moved for very hardworking people. These are people who have worked hard and who deserve certainty in retirement. I do not believe that they should have to put up with government changes that effectively alter their eligibility for essential services at a whim. This is a government that introduces these bills out of the blue and, at a whim, takes away the entitlements of 22,000 senior Australians who are suffering, as I say, because their superannuation investments are down. Their investments are not attracting the returns that they were whilst the coalition was in government. I think that, as I mentioned earlier, there is something more sinister going on here from the government. This is a total affront to superannuation. This is a complete reversal of what has been a bipartisan approach over many, many years which has sought to promote the need for Australians to invest in superannuation. But now, all of a sudden, we have this change of approach from the government which is extremely concerning.

There will be some very real impacts as a result of this bill. Let’s look at some of the entitlements that seniors currently get under the Commonwealth seniors health card. If we look at prescribed pharmaceuticals under the PBS, Commonwealth seniors health card holders pay $5 per script. After this bill, they will lose that and they will have to pay $31.30 per script. If we look at the PBS safety net, with the Commonwealth seniors health card a senior reaches the safety net threshold when he or she has paid a total of $290 for scripts, and prescriptions after that are free. Now, without a health card, the safety net threshold rises from $290 to $1,141, after which a fee of $5 per script still applies. There is the seniors concession allowance. When they have the health card, a senior is eligible to receive an annual allowance of $500 to assist with payments for essential services for which pensioners are granted concessions. After 1 July this year, if this bill goes through, many seniors will lose that entitlement. There is the seniors bonus payment. Currently, Commonwealth seniors health card holders will receive a lump sum payment of $500 in 2009. If they lose their health card as a result of the eligibility changes in this legislation, they will not participate in any further bonus payments. There is the telephone allowance. Currently, Commonwealth seniors health card holders qualify for a telephone allowance of $88 per year for a residential service. If you do not have the health card anymore, you will not get that $88. There are a whole range of benefits that are going to be impacted.

I think it is interesting to ask the following questions: why would the Rudd government take away benefits to help seniors pay for prescribed pharmaceuticals? Why would they want to punish seniors and take them out of the Pharmaceutical Benefits Scheme safety net? Why would they want to take concession allowances away from seniors? Why would they want to take away bonus payments to seniors? Why would they want to take away telephone allowances for seniors? Those are the questions that the Prime Minister needs to answer. It is all part of, as I say, the very worrying development in and around the area of superannuation and senior Australians which is taking place at the moment. We have serious issues emerging about what the government intend to do in relation to age pensions going forward. They have now flagged the axing of the superannuation co-contribution scheme. They are now saying that they are going to increase taxes across the board on superannuation investments—right at the time when people who have been doing the right thing with superannuation are being punished because of what has been happening across the globe. The government are going to take them and rub their nose right in it. The government’s policies and this bill will make it even worse for these people.

I think it is interesting to stand back and ask: what has happened since the government came to office? There are a number of things that have happened since the government came to office. The economy has gone backwards since Labor came to office. Since Labor came to office, unemployment has risen. Today we hear that unemployment has risen substantially, to a four-year high. More people are out of work and, at the same time, the government is introducing these types of bills to punish people. Since Labor came to office, consumer confidence has collapsed. Since Labor came to office, business confidence has plummeted. Since Labor came to office, industrial disputes have increased. Since Labor came to office, taxes have increased. We hear that there is going to be even more tax now on superannuation going forward. Since Labor came to office, the budget has turned from a healthy surplus to a massive deficit. Since Labor came to office, the level of wealth of Australian households has experienced a significant decline. Since Labor came to office, Australia has been driven further into debt each and every day. You could even add that, since Labor came to office, the Prime Minister has spent more time out of the country than in it—all at a time when senior Australians are being greatly impacted in terms of their savings and the work that they have done over their many years to save so that they can look after themselves.

This bill will hit self-funded retirees most hard. Self-funded retirees are people who have done everything possible on each and every day of their working lives to save, to do the right thing, so that they could be self-funded. Self-funded by definition means ‘without the government’s assistance’. The Commonwealth seniors health card is an initiative that was put in place to support these people and other senior Australians. It is there to help these people who have done the right thing and who have been doing the right thing for years and years. Why would any Australian government turn around and, at the drop of a hat and without any explanation at all, introduce this bill, essentially out of the blue, out of nowhere, with almost no consultation whatsoever? This government is saying: ‘If you take drawings out of your superannuation fund’—in other words, if you actually do get any positive returns from your superannuation fund—’we are now going to add that to any other income, and we are going to punish you by ripping this health card away from you if you now go over this threshold.’

These are people who are drawing money out of their savings over years and years, and we are going to punish them. I say to the older Australians who are going to be greatly impacted by this: do not be fooled, because this is only the start. This is only the thin end of the wedge. Do not be fooled that the Rudd government is going to just stop here because, if the Rudd government can rip away the Commonwealth seniors health card from 22,000 senior Australians, they will not stop there. They will play around with all the limits, thresholds and parameters of one sort or another across the entire social security system. And watch what will happen: they will start to tweak all of this in order to start knocking people out one by one, and it will be like a domino effect. So, to those senior Australians who are going to have their Commonwealth seniors health card taken from them, I say to them: we will fight this. We will oppose this bill. We will not stand by and let the Rudd government just rip your concession allowances, your telephone bill allowance, your concessions in relation to prescribed pharmaceuticals and your senior bonuses away from you. We will not allow the Rudd government to just stand idly by and do that. We will oppose this bill. We will argue against this bill. This is not right. It is morally wrong. This bill is morally corrupt. It is the wrong thing to do.

I call upon each and every member of the Australian Labor Party to stand up in this parliament and justify how something can be taken away from 22,000 senior Australians. Why would you be taking away something, at this time in particular, after everything that has been done by the Labor government since they have been in office? The economy is going backwards. Every day more Australians are losing their jobs. Look at today’s unemployment figures—a four-year high. And what you mob are going to do is just take away this card from 22,000 Australians. It is deplorable. It is wrong. It should not happen. Australians should be encouraged to save for the future, and they should be given incentives to save in their superannuation—(Time expired)

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I think I have some homework to do. I think I am going to have to look at the budget that was handed down by the Treasurer in May 2008 to see if the member for Aston was in the chamber. Then, when we passed the legislation governing the Economic Security Strategy, I am going to have to look to see if the member for Aston was in the chamber. Then, when we passed the legislation concerning the Nation Building and Jobs Plan, I am going to have to look to see whether the member for Aston was in the chamber, because I do not think he actually heard anything about what we are doing for self-funded retirees and pensioners in the legislation that we have handed down—in the budget, the Economic Security Strategy and the Nation Building and Jobs Plan. It seems to have passed him by entirely. He does not seem to understand any of the assistance we are providing for our senior citizens, but I know that the 14,714 people in my electorate of Blair in South-East Queensland who are 70 years of age and older have benefited enormously by the Rudd Labor government’s initiatives.

I say to the member for Aston, who talks about morality and ethics and the like: is it morally right to treat the income of someone who receives income from a superannuation fund differently to someone who actually worked with their hands or worked in an office and earned income that way? Under the coalition’s perspective, policies and philosophy, one senior citizen in Australia should be treated one way but another Australian, who works in an office or with their hands and earns income in that way, should be treated differently. Are we talking about one standard for those who are comfortable—or even well off—and one for those who are doing it tough? Is that the philosophy that the member for Aston thinks we should adopt in 21st century Australia? Is that what he thinks is ethical or moral? I think it is fair, just and equitable to treat income—from whatever source a person receives it—in the same way. And that is what this is about. It is about refining the adjusted taxable income test for the Commonwealth seniors health card to make it fairer—to ‘treat similar sources of income in a similar way’, as the member for Maribyrnong, the Parliamentary Secretary for Disabilities and Children’s Services, said in his second reading speech on 12 February 2009.

The Commonwealth seniors health card is, I think, supported by both sides of the House. It is a just and equitable idea to help our senior citizens. It is available to all Australians over pension age—65 for men and 63 years and six months for women—who are not receiving an age pension and who have adjusted incomes of less than $50,000 a year for singles and $80,000 a year for couples combined. It has a number of implications if you are in receipt of the Commonwealth seniors health card. Let us look at the qualifications to get that. We will need, as well, to look at the history of the Commonwealth seniors health card. To qualify, as I have said, there is an income test, and there is another $639.60 per year that is added for each dependent child. Having children is not confined these days to people in their 20s and 30s. We have senior citizens who have children these days as well. They must not be also receiving an income support payment from Centrelink or the Department of Veterans Affairs, and they must be an Australian resident or a Special Category Visa holder. So there are certain qualifications to get a Commonwealth seniors health card, and what we are doing is adjusting the income test. It is a good thing for constituents in my electorate and elsewhere to get one, because it provides access to concessional pharmaceuticals under the Pharmaceutical Benefits Scheme. It also provides for bulk-billed GP appointments and that is a help for those people who, as they get older, suffer from illness and infirmity and the travails and troubles of senior years. It also provides, through the Medicare safety net, for a reduction in the cost of out-of-hospital medical expenses above a concessional threshold. We also, in some instances, see additional health, household, transport, education and recreational concessions which are offered by states and territories to those people receiving a Commonwealth seniors health card. So it is a good and helpful thing for those people who are in their 60s and older to have.

The Commonwealth seniors health care card was introduced in 1994 by the Keating Labor government and was initially intended to help those who did not qualify for the age pension due to the lack of resident qualification or due to the value of their assets. It was to help our older Australians in those circumstances. In 1999 the eligibility for the Commonwealth seniors health care card was based on an adjusted taxable income test to allow more people to qualify, but the indexation was abolished by the previous government in 1999. So let us not get too sanctimonious about how much was done under the Howard years to help our senior citizens, because that government abolished the indexation of the income threshold. Let us not get too proud about the record of Mr Howard and his government in that regard.

The current qualifying income tests for the card are less than $50,000 a year for singles and less than $80,000 combined for couples. At the Commonwealth level, if you get a Commonwealth seniors health care card under the Rudd Labor government, you will qualify for certain cash payments, notably the seniors concession allowance, which was increased from May 2008 to $500 a year by the Rudd Labor government and is paid quarterly as part of the government’s delivery of election commitments. Commonwealth seniors health care card holders also received, as I said before, moneys in the Economic Security Strategy. In December 2008 they received $1,400 for singles and $2,100 combined for a couple.

The budget measure announced in May 2008 introduced a similar treatment test, if I can put it like that, for those people earning an income and claiming the Commonwealth seniors health care card. Currently, if you receive income from a defined benefit scheme—for example, ComSuper for a public servant or some of the state government funds—it is treated as income. But income from a private, retail or industry based superannuation fund or from accounts based pensions are no longer taxable and so they are not counted as income for the purpose of the Commonwealth seniors health care card. But if you work in an office, work outside with your hands, do a bit a relief teaching, help out with the council or do other sorts of work in the retail sector, your income is taken into consideration, so you are disadvantaged. We on this side of the House do not believe that is fair. We do not think that is equitable. So with this bill we are going to change the income test to include income from a superannuation income stream with a tax source and income that is salary-sacrificed to superannuation. That is what we are about to do to make it fairer in all the circumstances.

Income salary-sacrificed into superannuation is already assessed as income for the age pension but not for the Commonwealth seniors health care card, so we are bringing the entitlement and qualification for the Commonwealth seniors health care card into line with the age pension. For all those opposite who seem to be worried about this aspect: where was their bill before November 2007? Where was their legislation to amend the taxable income test in respect of the age pension? If they are so concerned about what we are doing now, what did they do about the qualification for the pension in relation to this prior to November 2007? The answer, of course, is that they did not do anything about it at all. The truth is, they can prognosticate over there and pose and claim that they are standing up for our senior citizens, but the reality is that they did not do it—and that is the truth. It was probably coming in the 13th, 14th or 15th years of the Howard government. That is when it was probably going to happen.

The Australian government, the Rudd Labor government, is supporting self-funded retirees through this very difficult time. In reference to the failure of the member for Aston to actually acknowledge any of these sorts of things, they are amongst those millions who will benefit through our $42 billion Nation Building and Jobs Plan. Self-funded retirees who paid their tax in 2007-08 and, as a result of their investments or other income, earnt less than $100,000 will get the tax bonus. If they earnt less than $80,000, they will get up to $900, so they will get funding. As well, if they are part pensioners and they paid even $1 in net tax last year, they will receive the $900 tax bonus.

About 290,000 older Australians, including self-funded retirees and part pensioners, can expect to receive the tax bonus—something that the Rudd Labor government is doing but those opposite did not have the wit or wisdom too. This is important for my constituency in Blair and it is important across the whole of Australia to help pensioners, seniors and those who are self-funded retirees. In December the Economic Security Strategy payment of $1,400 for singles and $2,100 for couples was made available to age pensioners and self-funded retirees who have a Commonwealth seniors health care card. Did the coalition support that? They supported it, they opposed it, they equivocated and now they criticise it. That is their position. Four out of every five of the 2.8 million older Australians 65 years and older benefited from the Economic Security Strategy.

What has the Rudd government done with respect to superannuation draw down requirements? The Rudd government has suspended the minimum draw down requirement for account based superannuation pensions for the second half of this financial year. That means that in the 2008-09 year draw down requirements will be reduced by 50 per cent, and that will help. That is responding to what the self-funded retirees are saying, to what they are concerned about. They are concerned that they will have to sell their investment assets and realise losses in a depressed market. So the Rudd Labor government is listening to what they are saying, listening to their concerns and acting on them.

Also, in relation to the age pension, many self-funded retirees have seen a fall in their investment income and they are now eligible for a part pension. The age pension is important. It is a fundamental social equity provision supported by the Rudd Labor government, and we are doing this. Since mid-October 2008 there has been a substantial increase in the age pension claim rates. We have seen a rise from about 3,500 a week in mid-October to about 5,500 a week in December 2009. That is the Rudd Labor government caring for our senior citizens. There were 4,608 pension claims lodged in the week ending 16 January 2009, and we remain committed to comprehensive reform, be it in terms of the aged care system—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member for Blair will have leave to continue speaking when the debate is resumed.