Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

It is great to have the opportunity to follow on from where I left off yesterday on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. Back in 2007, prior to the last election, the Prime Minister promised to ease the pressures felt by older Australians to keep up with the rising cost of living. This was a promise, just like many others, that has since been broken. Rather than taking affirmative action to ease the financial pressure felt by so many, particularly self-funded retirees and pensioners, true to style, those opposite have just commissioned a report and indeed now are making life much harder for people who are retired.

We saw the failed Fuelwatch. We saw the failed GroceryWatch, which was designed to bring down the cost of groceries. Certainly the price of fuel has come down a little, but that is fluctuating constantly. Nothing has been done regarding the promise to bring the price of groceries down, so it just adds layer after layer of additional impost on people who are retired—on top of the global recession, which, as I said yesterday, has caused a lot of difficulties.

While the Labor government is now restricting people’s access to the Commonwealth seniors health card, the coalition government expanded eligibility. Eighty-five per cent of people who had reached the age requirement for an age pension had access under the coalition government to the Commonwealth seniors health card, the healthcare card or the pensioner concession card. The coalition sought to ensure that 85 per cent of older Australians could at least get a bit of assistance after a lifetime of contributing to and building this nation.

The Commonwealth seniors health card includes access to the seniors concession allowance, a non-taxable payment of $128.50 made every three months to help with regular bills such as energy, rates and motor vehicle registration fees that are not available at a concessional rate otherwise. It also includes the telephone allowance, a non-taxable payment of $23 made every three months if the cardholder has a telephone connected in Australia. A higher rate of $34.60 is paid every three months where the person has an internet connection. We know now that many older Australians rely on the internet to allow them to be connected to what is going on in the community.

In the heart of a global financial crisis, older Australians will depend on these services more than ever, so one must seriously question the government’s timing of this bill. Unfortunately for seniors who lose their card, the effects are dire. Under the PBS, cardholders pay $5.30 per script. After losing it they will pay $32.90 per script. That is a huge jump in costs. And what of the PBS safety net? With a card, a senior reaches the safety net threshold when he has paid a total of $318 for scripts. Prescriptions after that are free. Without a card, the safety net threshold rises to $1,264.90—yes, you heard right, Mr Speaker: it rises from $318 to $1,264.90—after which a fee of $5.30 per script still applies. Most working families would struggle to pay this, let alone a senior relying on the pension, who cannot go back and start a career again to restore their savings and investments.

The Commonwealth seniors health card allows holders to benefit from a range of concessions granted at the discretion of providers. These include medical bulk-billing and household, transport, education, recreation and entertainment facilities. They will be greatly missed by people who become ineligible for the card. Older Australians have a right to feel cheated by this government—the same government that voted against increasing pensions by $30 when the coalition supported that measure.

I have noticed a disturbing trend in the media of late where older Australians are being negatively targeted. One such article published in the Daily Telegraph under the headline ‘Counting the cost of filthy rich pensioners’ suggested that taxpayers’ money was being handed out to undeserving millionaire pensioners on a regular basis. This is indicative of a host of articles suggesting that thousands of retirees spend their days trying to work out the best way to beat the system.

Nothing could be further from the truth. It has certainly not been my experience in the electorate of Pearce, and I do not believe this is a true picture of what is going on. A number of elderly constituents have contacted me recently to comment on the negative social attitudes that are being put about by some elements within the community. They are attitudes that my constituents feel result from stereotypes that were created recently in the media.

My constituents further tell me that they are proud to be self-funded retirees and that they will do all that they can to ensure that they remain as independent of government assistance as possible. These are people who are proud of what they have achieved. They are proud of having raised families and of having contributed to the nation. They do not wish to have any more reliance on government than is absolutely essential. For a section of the population who cannot readily re-enter the workforce and improve their budget situation, alterations to their budget will have a significant impact on their quality of life.

The government have a duty to all Australians to uphold their promises, but they have not done so. They have breached their duty to older Australians. They have a duty to ensure that the effects of the current financial conditions do not cause even greater uncertainty and, importantly, greater financial stress for older Australians. They have breached this duty. I do not know how any person in this place who votes for this bill will be able to walk among their community and look older Australians in the eye and tell them that they are representing their interests.

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. The title of the bill in no way indicates that it takes entitlements away from senior Australians and veterans. If I can wear my previous hat for a moment—I was shadow minister for veterans’ affairs—this government came in saying that it would always protect the rights of veterans and look after them. In my previous capacity I pointed out the way in which entitlements were being taken away from veterans without any indication in the build-up to the election that they would be targeted. Here, again, some veterans will be among those who will lose their entitlement to the Commonwealth seniors health card.

This government has tried to say that it is concerned about the plight of people who are suffering in this financial crisis. It has thrown $42 billion away and plunged us into debt. It is going to try to claw back some of that money by punishing some of the most vulnerable people in our society. These are people who have worked hard and they have done so with the ethic that they do not want to be dependent upon government, that they want to provide for themselves and that they want to be proudly called self-funded retirees. For those purposes they have sacrificed the spending of money—on holidays and all sorts of things that folk do—in order to save and provide for the time when they would no longer be in the paid workforce.

As part of recognising that these people had indeed worked so hard to not be a burden on the remaining taxpayers, they were given access to the seniors health card. The card is means tested. The test is $50,000 for an individual and $80,000 for a couple. The test was never indexed; it remained at that figure. Many people will ask why it was not indexed. The answer is that it was felt that that was a reasonable limit at which people would become eligible for the card. As my colleague the member for Pearce pointed out in her speech a little earlier, with this card people have access to discounted pharmaceuticals. This is of enormous value to older Australians because they are such great users of the Pharmaceutical Benefits Scheme. They need access to the drugs that are available for keeping them in good health. The card gives them discounted access to these drugs, which is very important for maintaining their health and their lifestyles.

The member for Pearce pointed out the difference that that will make in terms of being eligible for the safety net. If you are indeed entitled to the health card, the safety net clicks in at $318 a year, but if you are not eligible for the card it clicks in at $1,264. The difference of close to $1,000 is an enormous amount if you are on a fixed income. The term ‘fixed income’ has taken on a new meaning that no-one thought it would. A so-called fixed income is becoming less and less, and more and more people who considered that they had provided adequately for themselves—self-funded retirees—are going to have to become part pensioners or become more dependent on the part pension than they were before.

This is an initiative that the government announced at the time of the budget in May last year, before we saw what was happening to the economy and to people’s incomes, and they are still pressing ahead with it. They will spend nearly $20 million over four years to gather in $84 million. Look at that in the context of the $42 billion that is being pitched out, or splashed out. Look at the $75 million that was paid to pensioners living overseas who are entitled to the $900 that went out as part of the $42 billion. That did not need to be paid out. It was supposed to be a stimulus package for the Australia economy, not for overseas economies. That $75 million could have been kept here in Australia and then this mean initiative, which saves $84 million over four years, would not be necessary.

How do the government justify not being able to go over this part of their budget, when they can plunge the country into debt of up to $200 billion? That is what the bill that they brought in has authorised them to go out and borrow. And look at the impact of that. On the one hand they are saying, ‘We’ll guarantee deposits in banks so there will be money that small businesses can borrow against and use to stay in business and keep employing people,’ and on the other hand they are saying, ‘We’re going to plunge the entire community into enormous debt’—and it looks like they are going to borrow the money domestically. So the government will now be in competition with the private sector for the money that is guaranteed in the banks so that they can finance their debt. I understand they will be paying a bond rate of about 6.25 per cent. So guess who will be buying up those bonds? The banks. So the government will be in direct competition with the private sector—the businesses that are providing jobs—for the very money that would enable them to stay in business, by plunging us into debt with a $42 billion package that in no way benefits the people of Australia in a long-term sense.

What is the cry? ‘Here, have $900 each and go out and spend it, and we hope that will keep people in jobs,’ they say. The reality is that businesses that can survive this financial crisis are not being allowed to have access to finance because the government are in competition for that same dollar. Part of that splash of money was $75 million paid instantly to overseas people who need not have been in receipt of that money at all. It could have offset the $84 million that is going to be the net saving over four years as a result of taking away the entitlement of a health card which enables people to stay healthy. What meanness and trickiness is that! Where is the morality in a decision like that? The government seem able to reconsider all sorts of things, but not when it comes to older Australians and what this will mean to them.

As the member for Pearce clearly said, the Commonwealth seniors health card provides access to discounted pharmaceuticals through the Pharmaceutical Benefits Scheme and the threshold for the safety net cuts in at $318 instead of $1,264. The Commonwealth seniors health card currently provides older Australians with access to the seniors concession allowance—that is the one that we established as a one-off payment every now and again; the telephone allowance, which is meaningful, particularly for the internet; and the seniors’ $500 bonus. And there are other things that they are eligible for. At the discretion of providers, they may benefit from concessions, such as medical bulk-billing, household, transport, education and entertainment facilities. By taking away their eligibility for the card, the government are reducing the standard of living of older Australians, who are not in a position to go back into the paid workforce.

If you look at the way in which the government are going to do it—the way in which these people are no longer going to be eligible—it is important to see how tricky and mean the redefinition of taxable income is for the purpose of having access to the seniors health card. To get access to the Commonwealth seniors health card, income which is presently excluded from the definition will be added back in. It will include income from a superannuation stream with a tax source, which means that the fund from which the superannuation payments are made has already paid tax—and which under the reforms of the last government became tax free—and it will also add back into the income test for the card income that is sacrificed for superannuation payments. In other words, while legislation previously passed by this House exempted certain superannuation benefits which are being paid now but have already been subject to a tax regime, these benefits are going to be added back into the definition of income received for the purpose of being eligible for the Commonwealth seniors health card. Double taxation perhaps? A neat way of going around and repealing benefits that were given by a previous government? All of those questions should be asked of this government.

At the end of the day, this is a moral question. The government will strip $84 million from these people over four years—$21 million a year—to lower their standard of living while, at the same time, splashing around $42 billion of taxpayers’ money and plunging us into debt. And the government are sending $75 million of that $42 billion overseas, where it will not benefit the Australian economy at all. So, at the end of the day, it is older Australians—who have saved so that they could proudly call themselves self-funded retirees and proudly say, ‘We have provided for ourselves and we will not be a burden on the taxpayer’—who are being forced to fund the $75 million worth of $900 bonuses paid to people who no longer live in Australia, which will benefit another economy, not ours. It is an immoral decision to force older Australians to be responsible for providing that money to pay people who no longer live here. I might add that the $75 million that was paid to the overseas people did not need to be paid under the agreements that have been struck between governments as to pension reciprocity payments. These are payments that are made above and beyond that. Indeed, it is my understanding that, when we as a government made one-off payments to people who met the criteria to receive that one-off payment—that is, pensioners, part-pensioners or self-funded retirees—we did not send that money overseas.

The mechanism was already there to ensure that the payments were made to stimulate the Australian economy, not to be sloppy in the administration—or perhaps it was intentional, to say: ‘We are going to grab this money away from these older Australians in order to pay it to some others.’ So in speaking to this bill and saying that we are going to oppose this provision, I personally find the decision to attack those people who are most vulnerable—that is, older Australians, including veterans, who have worked hard to provide for themselves—one of the most immoral decisions that this government has made.

Every promise that was made before the election not to reverse the benefits given by the previous government to older Australians is being reversed in this sneaky piece of legislation. The more people who know about it the more people whose voices can be heard. Perhaps their voices can be added to the voices here to implore this government to change its mind about penalising older Australians who have saved for their retirement and lowering their standard of living when they are already seeing their standard of living reduced because of the economic crisis. To do so when there is so much money being washed around the economy like a man with no hands and to benefit people who no longer live here at the expense of those who do is an immoral stance by this government. Please listen to the words of those who are going to suffer, and reconsider the decision that you have made.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. At a time when Australians are facing an economic crisis, the Rudd government is planning to cut senior concessions. I am certainly against this bill. Unfortunately, this bill sends yet another message to our seniors, our older Australians and our veterans, that the Labor government does not value the contribution they have made to Australia over their working lives. This measure totally disregards the fact that these same seniors have worked for most, if not all, of their lives. They have taken personal responsibility for themselves. They have saved. They have rarely, if ever, sought financial assistance from the government. They have raised their families and have made sacrifices during their lives not only for their families but often also in preparation for their older years. It appears that the Labor government is determined to discourage savings, to discourage hard work and sacrifice, to discourage taking personal responsibility and, clearly, to discourage reward for hard work. This bill effectively rips 22,000 concession cards from our senior Australians, including self-funded retirees and Veterans’ Affairs pensioners. How does this ease the cost-of-living pressures for senior Australians?

In 2007, during the election campaign, the Prime Minister said he would ease the cost-of-living pressures for senior Australians. Well, this does not do that. It clearly now appears that the Rudd government wants to roll back the support provided for seniors and veterans by the previous coalition government, and this comes at a time when senior citizens are feeling particularly vulnerable. They are finding it increasingly difficult to maintain a reasonable standard of living, many having no capacity or capability to find employment to supplement their fixed incomes. On 15 May 2008, the government announced a review—yes, another review—of measures to strengthen the financial security of seniors, carers and people with disability. This was known as the Harmer review. The government was provided with the final report at the end of February but has not released it publicly nor outlined its response. We can only believe that cuts in this bill may well be the first of many. Many seniors in my electorate of Forrest have read about the proposed changes in the local Western Australian seniors’ newspaper and have been in touch with me. Not only those receiving a pension but also those suffering a declining rate of return from their hard earned savings and investment funds as interest rates continue to fall have expressed their very genuine concerns that they are already facing tight financial pressures.

What has to be respected, remembered and understood is that, as we are an ageing population, many of us will require increased access to medical treatment and prescriptions to assist our wellbeing in later life. Many senior Australians struggle with the cost of prescription medicines. Even though medications under the Pharmaceutical Benefits Scheme are government subsidised, the seniors health card provides a further subsidy of $5.30. To many senior Australians that is a very important amount because so many of them need more than one script per month and would struggle to pay the higher costs for their medications at the full rate. This would simply put even more financial pressure on our senior Australians.

The Rudd government has spent the budget surplus and plunged Australia deep into debt and it is now penalising the people who have worked and saved for retirement. The coalition supports an increase in the base rate of the age pension and in September we introduced the bill that would have increased this rate. During the last 12 months I have regularly talked with many senior citizens who are finding it increasingly difficult to maintain a reasonable standard of living because the rate of the pension they receive has not kept pace with increased costs. We know that the base rate for the single pension is $562.10 per fortnight. Many of our senior Australians cannot live on this amount with the recent cost-of-living increases for basic items such as food, housing and health costs. I believe it is now time to address this very important issue by ensuring there is an increase in the base rate of the age pension in the May budget.

Also, the burden of paying rent is one of the biggest issues for retirees and pensioners. I have over 12,760 age pension recipients and over 4,400 disability support pensioners in my electorate. I ask the government: how many in my electorate will lose their Commonwealth seniors health card and therefore suffer even further financial pressure than they are currently facing? As I said earlier, I am very concerned that the changes outlined in this legislation may be the beginning of more cuts that will adversely affect vulnerable people in our communities—and we have seen so many of the benefits that have come for our seniors.

After 1 July, threshold limits will remain the same. Superannuation drawings from a taxed fund will remain untaxed, but those drawings will simply be added to a person’s adjusted taxable income for the purpose of assessing eligibility within the threshold limits. The effect will be that many self-funded retirees will lose their Commonwealth seniors health card on 1 July 2009. We need to know exactly who these self-funded retirees are and where they are currently living. Many of those same self-funded retirees altered their investment arrangements towards superannuation, to take advantage of the 2007 reforms, and they will now be negatively impacted by the eligibility changes.

There is no doubt that there is now a significant difference in the economy and in the performance of private and taxed superannuation funds and various savings vehicles. An increasing number of previously self-funded retirees have suffered a severe fall in income and, as a result, are now entitled to the age pension. A proportion of those on higher levels of income who have also had a fall in income may now be below the health card income-test limit and may qualify.

But for seniors who lose the card the effects are substantial. They will lose benefits such as prescribed pharmaceuticals under the PBS safety net, the seniors concession allowance, the telephone allowance and a range of other benefits granted at the discretion of providers. These include medical bulk-billing and household, transport, educational, recreational and entertainment facilities. These benefits will be a major loss to those who lose access to the card, and this will no doubt have a very negative impact on the quality of life of those affected. That is very important in the senior years of each individual’s life.

The first tranche of cutbacks will be enacted if this bill passes. I reiterate that approximately 22,000 self-funded retirees may lose their Commonwealth seniors health cards from 1 July 2009. The Prime Minister did not disclose this to voters before the election. The former coalition government improved eligibility for Australian government concession cards so that over 85 per cent of people above age pension age actually qualified for the healthcare card, the Commonwealth seniors health card or the pensioner concession card. The coalition significantly increased the income limits so that more self-funded retirees became eligible. Due to these measures, around 300,000 people held the card, compared to just 35,000 when Labor left office in 1996.

The Labor government proposes to allow for superannuation income streams from a taxed source and income that is salary sacrificed to superannuation to be included in the income assessment for the purpose of eligibility. These changes will hit self-funded retirees the hardest. Keep in mind that these are the same seniors who have also been penalised by the Rudd government’s bungled bank deposit guarantee and had their savings frozen and locked up by this decision.

Let us not forget that the original purpose of the Commonwealth seniors health card was to provide assistance to retired persons on low incomes. When introduced in 1994, the income-test limits for the card were the same as the income-test limits that applied to the age pension, so the vast majority of retired persons issued with the card were asset rich but income poor, and often farmers.

Mr Rudd and his government will effectively force many seniors over the income-test limit and strip them of their card. The former coalition government worked very hard to pay off the previous Labor government’s $96 billion debt so that assistance could be offered to self-funded retirees who were not claiming income support. Now, 15 months after coming to office, the Labor government is rolling back this initiative. These proposed changes, as I said, were not mentioned prior to the last election, and recently we have learnt that the Prime Minister is looking at options to roll back other measures that the coalition government provided to senior Australians.

During these difficult economic times, the Rudd Labor government should not be punishing self-funded retirees. Those people have worked hard, saved and planned prudently for their retirement with very little dependence on government support. I strongly support the seniors and veterans in my electorate. I am opposed to Labor’s proposed changes and do not support this bill.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. The government is continually reminding us that people are being stripped of their entitlements, that they are unable to claim their redundancy entitlements and that they are suffering because of the global financial down-turn, so it is extraordinary that we have before us today a piece of legislation which will effectively cut the entitlement of 22,000 people to a concession card that provides them with significant benefits which allow them to continue to fund their own retirements.

It is important for us to note that this group of people is not fabulously wealthy. These people do not have more money than they know what to do with. These people are on the very edge of being able to fund their own retirement and thereby remove a burden from all other taxpayers and the government. This is something we need to encourage for the future of Australia. We need to ensure it is a viable proposition for future generations to take up.

I find it especially hard to understand this measure when retirement incomes have been so badly affected by the global financial crisis. I believe that the government will again have to reconsider and address the whole question of retirement incomes in the near future. Interest rates are low and they are set to fall further. This will badly affect many retirees. While it may conversely provide a benefit for people with mortgages, it punishes people at the other end of the equation, who rely on income streams that have interest rates attached to them. When cost-of-living pressures are maintained and when people have already been affected by the bungled bank deposit guarantee, it is hard to understand this as being anything but an ideological measure. It is typical of a Labor government, which says, ‘We don’t want you to do anything for yourself; we will take care of things for you.’ It is a typical Labor approach: ‘Don’t ever dare to do anything such as fund your own retirement. We’d prefer to have governments fund everything for you at every moment of your existence.’ It is stunning to think that this includes veterans and will affect veterans’ entitlements.

I think that when these measures are viewed in the light of what they mean for many of those people on the edge of returning to full government assistance, it will be seen that these perhaps should be scrapped. We know that the Commonwealth seniors health card is provided to non-wealthy self-funded retirees primarily to allow them concessions on health care and pharmaceuticals. Because we have allowable income thresholds which are applied, the card is widely recognised as a means-tested provision. I think this is an important point. This is one of the benchmarks that is used for those people who are barely funding their own retirements for a wide range of other benefits by other governments and other services and other facilities and other entitlements. So by taking away the Commonwealth seniors health card we are actually removing access to a wide-ranging series of things. Indeed, the flaw in the legislation before us is that the threshold limits, which are at the moment $50,000 for singles and $80,000 for couples living together, will not change. The threshold limits will remain the same. Superannuation drawings from a taxed fund will remain untaxed but the drawings will be added to a person’s adjusted taxable income for the purposes of assessing eligibility. Of course, herein lies the rub. Those people who have structured their arrangements around superannuation changes of the previous government, people who have put in place what they consider to be a modest retirement, will then be caught up and have this card removed.

What does this mean for those people who will have their Commonwealth seniors health card removed? It is quite dire when you consider what it does mean. Under the Pharmaceutical Benefits Scheme, Commonwealth seniors health card holders will pay $5 per script. When they lose it they will pay $31.30 a script. There is the PBS safety net. With the card, a senior will reach the safety net threshold when he has paid a total of $290 for scripts. Prescriptions after $290 are free. Without the card, the safety net threshold rises to $1,141.80, after which a fee of $5 per script will still apply. People who lose their eligibility for the card will lose many other benefits, including the seniors concession allowance, the seniors bonus payments and the telephone allowance.

Why is this important? It is important because we know that retirement incomes are one of the major challenges that we face as a nation, not just during the present financial crisis but well into the future. We know that people are living longer. We know this presents us with many new and emerging challenges. Experts say that one in three female children born today will live to the age of 100. One of the biggest challenges that we face in terms of growth in government expenditure is the one surrounding pensions, superannuation and retirement incomes and it is something that we have to take very seriously. So any measure that we face in this place, like this legislation before us today, which attempts to alter the arrangements ought to be considered very carefully. We ought to ask what is the benefit of this measure as opposed to its cost. I want to argue today that, regardless of the financial crisis and the problems that we currently face, any measure that we take in this place which reduces the incentives for people to fund their own retirement is going to lead to a bigger problem for future federal governments. We need to make it attractive for people to fund their retirement. We need to make it easier and make it a viable option, especially when you consider all of the other alternatives which mean that the Commonwealth government will have to find extraordinary amounts of revenue with a declining revenue base, with the demographic challenges that we will face. I think we need to design policy settings to encourage people to fund as much of their own retirement as possible.

I was pleased to meet recently with representatives of the Association of Independent Retirees and members from my own Hills Seniors Association to discuss Labor’s proposed changes to the seniors health card. As we know, the Rudd Labor government is planning to take away this card from many Australians. Indeed, hearing their stories about how this will directly affect those seniors brought home to me exactly what this will mean for people at a very vulnerable stage of life, people who have worked hard, people who have sacrificed to put away money for their retirement, people who have given up a different lifestyle at different stages of their lives to ensure that they had a measure of their own security later in life. I want to note that they are particularly upset that these changes were never mentioned prior to the last election. There was no mandate to make these changes to the Commonwealth seniors health card. The government has no mandate for these measures. Much has been made in recent times of having a mandate, of outlining your policy prior to an election. Indeed, that has not been sought nor has it been achieved in relation to the legislation before the House.

They raised with me that the thresholds were last adjusted in 2001, and I have some sympathy with that. If this measure today was viewed in the light of an amendment or there was a proposal to see those thresholds raised, I believe many of these self-funded retirees could live with that. What we are concerned about is that $50,000 for singles and $80,000 for people living together are not realistic amounts taking into account that CPI figures indicate a rise of 20 per cent in the cost of living since the thresholds were last adjusted in 2001. In other words, retirement incomes have crept past those thresholds, just to fund the day-to-day cost of living. Again, I would stress to members here that these are not wealthy people. We are going to be affecting thousands of people who are not well off. They have worked hard to fund their own retirement and achieve a measure of security and we are threatening that security. I want to note that we have already seen thousands of people returning to the pension over the December-January period. We do not want to create a system which encourages that trend or indeed adds an extra burden on the government at a time when we will face significant challenges.

I want to reiterate that one of the things that most concerned the members of the Hills Seniors Association Australia and the Association of Independent Retirees who met with me was that they had structured their superannuation arrangements to take advantage of reforms and are now caught in the unenviable position of having to restructure their arrangements, with no guarantee that they will be able to fall under the thresholds that are set in this legislation.

I believe that self-funded retirees are playing a significant role in ensuring that our retirement system is viable. They are people who have worked hard and sacrificed much so that they can fund their own retirement and thereby lift a burden off other taxpayers. When you consider the question of what will happen in future with declining revenue bases and increasing costs and liabilities to fund many more older citizens and their retirements, this legislation attacks the very heart of a system that would encourage people to fund their own retirements.

I find the proposal to index eligibility threshold limits for Commonwealth seniors health cards a good one. If this legislation were to be improved to receive my support and the support of the coalition then indexing those threshold limits would be one way to do that. But there is no proposal to reset these limits. There is no proposal to reindex them annually. Fifty thousand dollars and $80,000 are not reasonable levels in the current circumstances, with declining incomes for many people funding their own retirements.

Without any changes to this bill, I will be standing up for the self-funded retirees in Mitchell, for the 10 per cent of people in my electorate who are over the age of 65, many of whom have sought to fund their own retirements, who have done the right thing by the government, done the right thing by society and done the right thing by themselves. We need to ensure that in the future we see legislation that encourages and rewards people and strives to get as many of them as possible to fund their own retirements, for the future of all of us in our nation. But, unless there are changes, I will be opposing this bill and will work to see it defeated in both places.

Mark Coulton (Parkes, National Party, Shadow Parliamentary Secretary for Water Resources and Conservation) Share this | Link to this | Hansard source

I rise today to speak against the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009 because I believe it is not in the best interests of our senior Australians. This legislation effectively cuts 22,000 self-funded retirees off from their concession cards. The Commonwealth seniors health card is provided to non-wealthy self-funded retirees, mainly to allow them concessions on health care and pharmaceuticals. Because allowable income thresholds are applied, this card is widely recognised as a means-test provision to identify those self-funded retirees needing some assistance.

Currently the threshold limits are $50,000 for singles and $80,000 for couples living together. This dollar amount refers to adjusted taxable income and does not include non-taxable drawings from a taxed superannuation fund. If this legislation is passed, the threshold limits will remain the same and superannuation drawings from a taxed fund will remain untaxed, but those drawings will be added to a person’s adjusted taxable income for the purposes of assessing eligibility within the threshold limits. This will mean that many self-funded retirees will lose their health cards from 1 July this year.

For seniors who lose the Commonwealth seniors health card, the effects are dire. One effect will be the increased cost of prescribed pharmaceuticals. Under the Pharmaceutical Benefits Scheme, cardholders pay $5.30 per script. After losing the card, they will pay $32.90. Another effect relates to the PBS safety net. With the seniors health card, a senior reaches the safety net threshold when he or she has paid a total of $318 for scripts. Prescriptions after that are free. Without the Commonwealth seniors health card, the safety net threshold rises to $1,264.90, after which a fee of $5.30 per script still applies. This will mean that many of these self-funded retirees will go without. They will choose not to purchase medicine when they reach the threshold limit and will put their health at risk. These people have grown up in a time when it was the done thing to put yourself last, but unfortunately, in their senior years, when it comes to medication this will have dire effects.

Another effect relates to the seniors concession allowance. With the Commonwealth seniors health card, a senior is eligible to receive an annual allowance of $500 to assist with the payment for essential services for which pensioners are granted concessions. At 1 July 2009, many seniors will lose their entitlement. The telephone allowance will also be affected. Cardholders currently qualify for a telephone allowance of $34.60 paid every three months for a residential service. If they lose their card, they lose this allowance. The Commonwealth seniors health card also allows holders to benefit from a range of concessions granted at the discretion of providers. These include medical bulk-billing and concessions for household, transport, education, recreation and entertainment costs. These concessions will be greatly missed by persons who become ineligible for the card under this system.

The simple fact is that non-wealthy self-funded retirees who have planned prudently for their retirement with little dependence on government support will be hard-hit by the proposed changes to their eligibility for the Commonwealth seniors health card. Self-funded retirees have done a great job in looking after their own interests and have worked hard to ensure they can provide for themselves during their senior years. A seniors health card is something that provides these hardworking Australians with a small amount of comfort and gives them the opportunity to receive discounts that can make a big difference to their daily costs.

Self-funded retirees have perhaps been the group hardest hit by the current economic downturn, and they are really hurting. Many of them have lost large amounts of their superannuation and are having to watch their dollars closely. Many of them have lost close to 50 per cent of their retirement nest eggs. They have been largely ignored in the Rudd government’s stimulus packages, and there has also been no real investment in aged-care infrastructure in the packages, which means this sector of our society will be fighting a losing battle in the years ahead. On top of this they are now faced with the possibility of losing their health cards. This legislation is a slap in the face for self-funded retirees.

The coalition are strongly opposed to Labor’s proposed changes and we are not supporting this bill. The coalition are not the only group opposed to these changes. I have had many groups and individuals in my electorate of Parkes contact me in relation to this issue, and they are all strongly against this legislation. One particular person who has contacted me about this—and I spoke to him last Friday—is Brian Semmler, who is the vice president of the New South Wales division of the Association of Independent Retirees, commonly known as the AIR. Earlier in the week, Brian had emailed me and said:

In my view this is a pathetic measure, as many of the present holders of the card are elderly, not in good health, and will have enormous outlays for pharmaceuticals and lose other benefits which will impact on their financial survival. Clearly the best solution to this problem is to throw out the proposed Legislation.

On Friday afternoon, I spoke to the Dubbo branch of the Association of Independent Retirees, and what is normally a modest gathering was a large crowd. In excess of 100 self-funded retirees turned up to this meeting in Dubbo. It made me feel very angry to see how frightened and confused they felt. Their feeling was that they had been abandoned, with no recognition of their hard work and the savings and sacrifices that they had made through their entire working lives, just to get to this particularly vulnerable stage in their lives and then be treated with such callousness. Self-funded retirees deserve the government’s respect and consideration, and this legislation is not in their best interests.

The coalition paid off Labor’s $96 billion in debt and extended support to our seniors, including self-funded retirees. Now, some of the first casualties of Labor’s debt train wreck are our senior Australians, many of whom can least afford it. The Rudd government is penalising the people who have done the right thing and saved for their retirement.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I, too, speak on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009 in absolute disgust. Australia is being shaken by the greatest global economic crisis in years, and the vulnerable in our society are suffering. Many older Australians have seen the devastation of the value of the investments intended to see them through retirement. Some have been refused access to money which had supposedly been safely deposited with financial institutions but was then subject to the government’s muddled bank guarantee scheme. Living costs remain high. These people are hurting. And what does the government do? Does it express sympathy or extend a helping hand? No. Does it implement measures to ease the pain felt by this deserving section of the community? No. Does it even try to maintain the services which were already in place when it took office? No. It just kicks the elderly in the teeth.

The government is telling retired Australians, who planned ahead on the basis of promises made to them while they were building the country that we all enjoy today, that they do not deserve the benefits of our society. The members opposite are telling 22,000 Australians, whose hard work has placed them just above the breadline, that they should be punished—punished for being naive enough to trust that promises would be kept under a Labor government.

These are not wealthy people by any measure. They just set aside enough so they would not have to rely on the pension alone. They are people who struggle in the current environment and get by with the aid of the Commonwealth seniors health card. Until now, superannuation payments have been excluded when assessing eligibility for the card, which carries a wide range of benefits. But this bill will take that income into account as well, and any single retiree getting more than $50,000 per annum or couples receiving more than $80,000 per annum will be denied the card. How many members of this House could get by on those income levels or less, even without the added cost burdens which come with age, particularly the expense of medication?

We all recall the Prime Minister’s admission last year that he could not survive on the aged pension—an embarrassing admission which was parroted by several of his offsiders on the benches opposite. But, of course, the Prime Minister speaks from a position of comfort, safe in the knowledge that his retirement will be easily covered by the tens of millions of dollars his family has accrued as a direct result of Howard government policies. The Prime Minister said that the pension—which is around $560 per fortnight for a single person—was ‘almost impossible’ to live on. And his Treasurer, foreshadowing an increase in the pension in the next federal budget, said, ‘The single rate pension is totally inadequate.’ The question, of course, is how they expect pensioners to survive when they themselves admit they could not get by on such a pittance.

Many of those who would be affected by this bill made their retirement plans on the basis of Howard government policy—like the Prime Minister, albeit without his vast wealth. The previous government showed them respect and care. The Prime Minister shows them only contempt. In the 2007 election campaign he promised to take care of the elderly. And this is how he is taking care of them! The plan to snatch seniors’ health cards from 22,000 retirees would save, perhaps, $40 million in the first year of its implementation. That is about 0.1 per cent of the Prime Minister’s latest spending spree in which he has emptied Australia’s coffers—and gone beyond that, to plunge the nation into grave debt—to buy some fleeting affection from the public. The members opposite took government with an impressive surplus, the legacy of the Howard government, but now the cupboard is bare. And it seems the elderly have been targeted to pay the price for this government’s bungling. Forty million dollars—that is what will be gained by causing misery and distress to thousands of older Australians who did nothing more than work hard and plan for their future. The government obviously thinks this is a price worth paying; I do not.

More than 3,000 retirees in my electorate of Tangney alone signed letters last year registering their disgust at the government’s treatment of them, particularly in the bill we are debating today. More than 200 retirees crammed into a local hall to express their rage at what they see as abuse by a government which does not care, a government which is intent on punishing seniors for reasons known only to itself. The plan to cut back on entitlements for the health care card was hatched long ago. It was buried in the last federal budget and, not surprisingly, it did not appear in any of the ‘highlights’ circulated by the government. It was brought to my attention by two elderly constituents—a couple who had worked hard and scrimped and saved throughout their lives so that they could be secure in their retirement. They are among those whose future will be determined by the outcome of this debate. The plan had been pointed out to them by a sharp-eyed accountant. This couple found that the inclusion of their superannuation income would push them over the threshold and mean the withdrawal of their health care cards. The lost pharmaceutical benefits alone would cost this couple some $300 per week—a heavy burden for anyone and a back-breaking burden for those already struggling to get by.

Most of those older constituents who signed letters and rallied in my electorate against their treatment by the government are self-funded retirees, who are the prime target of the bill before us today. Many of them have since seen access to their funds blocked by the government’s bungled bank guarantee. They are already facing dire straits, and the withdrawal of their health cards would be a massive blow. This move would see the cost of their prescribed medications soar from $5 per script to $31.30. Remember that many of these people require multiple scripts every week to deal with the health problems that beset some older citizens.

The card also includes a safety net, which cuts in when $290 has been spent on prescriptions in one year, with any further medicines being provided free for that period. This bill would see that cut-off rise to $1,141.80 in one year, after which a fee of $5 per script would still apply. The card provides other benefits not necessarily related to health but on which many older Australians are dependent. These include the seniors concession allowance, which provides cardholders with $500 per annum to help pay for basic services for which retirees are not given concessional rates, including energy, rates and motor vehicle registration fees. Then there is the seniors bonus payment, under which cardholders are due to get a $500 lump sum payment in 2008-09. If they lose their card there will be no more bonus payments. They also get a telephone allowance of $88 per annum and a wide range of other concessions—on services such as transport, recreation and entertainment—extended by state, territory and local governments as well as private providers.

Demand for these benefits is set to dramatically increase, with the number of Australians aged 85 and over to increase from 400,000 today to 1.6 million by 2047. In 2055, forecasts say, there will be 78,000 Australians aged over 100, compared to 2,860 today. Clearly the demand for medication by the aged will rapidly expand. But what will they do if they cannot afford to pay because of this government’s policies? This is a very real scenario faced by 22,000 people who would be affected by this bill right now. There is no other safety net. This is the safety net, and members opposite would like to take it away. The choice for some could come down to whether to take medication or to eat, because this government is not going to allow them do both. Obviously the Commonwealth seniors health card is of tremendous benefit to those who hold it, with some reports suggesting it saves some cardholders about $10,000 per annum. If, like the Prime Minister, you have millions of dollars it is obviously no big deal, but for those struggling to get by, and whose income makes them targets of this bill, $10,000 could be the difference between surviving and falling by the wayside. This is especially true when you consider that many self-funded retirees—assuming that they are able to access the funds they set aside for their older years—are particularly exposed to diminishing values on the stock market. In short, the withdrawal of the card would be devastating to many.

Some say this bill is the thin end of the wedge and that it is the first step in hitting the elderly to make up for the disastrous losses incurred by the government in recent months. But I do not say that, because the writing has been on the wall for some time. This is just another example, and we should not be surprised. This bill is in keeping with the contempt the government have shown for older Australian since they took office—and it appears that they are set to stay on this track, with news reports suggesting there are plans to tighten the income requirements for receiving the age pension. The reports say the effect of these measures in slashing the number of people entitled to a pension will allow payments for the few remaining pensioners to be significantly increased. Presumably the Prime Minister’s objective is to then be able to boast that the pension has reached a reasonable level, regardless of the fact that it is available to a relative few because others have been excluded from receiving the benefit. Other reports have suggested that the government may change the rates at which asset tests are tapered, which would have the effect of reducing the incentive to save for retirement. They say there may be an increase in income test taper rates, which would be a disincentive for people to earn additional money.

Many of today’s older Australian pensioners planned their retirement in the days before universal compulsory superannuation, when they were assured that a lifetime of paying tax would be rewarded with state benefits in their later years. If the government has its way, we as a nation will be defaulting on this promise. These reported planned changes are in keeping with government tactics of giving with one hand and taking away with the other—and taking far more than was given at that. The coalition supports an increase in the age pension and last year tried to raise it by $30 a week, but the government voted against it. That, you will remember, Madam Deputy Speaker, was at the time when the Prime Minister cried crocodile tears of sympathy for pensioners and said he knew they were doing it hard, while his family were sitting on piles of cash they had built up because of Howard government policies.

The members opposite should be hanging their heads in shame over their treatment of seniors. After their disgusting refusal to increase the age pension, embarrassed by their own insensitivity and squirming for a response to the emerging financial crisis, they finally caved in to our urging and made some payments available to the elderly late last year, and that was it. The government have done nothing more to help seniors, whose standard of living has steadily declined throughout their term in office. Those one-off payments were the giving part of the equation. The bill before us today is the element of taking.

With the healthy surplus which the government inherited on taking office now obliterated, we can expect more of the same. How will older Australians cope with a government which is spiteful enough to take away the very concessions which allow them to survive? How will we all cope in our old age? A raft of reports late last year painted a grim picture of life for the elderly under the current government. The OECD said that Australia had the fourth highest poverty rate for over-65s among the world’s developed economies, adding that for singles aged over 65—get this—Australia had the highest relative income poverty rate in the grouping. If there was any doubt about the likely impact of withdrawing these health cards from so many, we can look to a very disturbing report which said some older Australians were not taking potentially life-saving drugs because of financial concerns. How much worse will things get if this government has its way with this bill?

The aged-care system is another shambles under this government—and, if the system cannot meet demand for aged care today, how will it cope with the rapid ageing of Australia’s population? Many baby boomers have not yet even retired. Aged-care providers are turning down offers of federal government subsidies and refusing to build new places because it is simply not viable to do so. Continuing the government record of neglect of older Australians is the recent move to strip away pensions from the former wives of veterans. Under this despicable cash grab, women who have separated from their veteran husbands will lose their pensions. This is after spending their lives in support of men who risked everything for their country in combat zones around the world. Rather than receiving an entitlement in recognition of service to this nation, they will be forced to seek payments from Centrelink, receiving either unemployment benefits or the age pension.

In his 2007 election campaign, the Prime Minister pledged to ease life for senior citizens, but after taking office, instead of taking real steps to improve the lot of older Australians, he ordered a review into measures to ‘strengthen the financial security of seniors, carers and people with disability’. This has become typical behaviour for the government: ordering reviews and inquiries rather than effecting real change. It is a strategy of giving the appearance of motion while standing still. It is all about style and not about substance. The review to improve conditions for the elderly, carers and the disabled—the Harmer review—made its final report to the government last month, but it has not been released and no key findings have been announced. So, while promising to improve things for the elderly, the government’s only changes have been to the detriment of older Australians.

I challenge the members opposite to guarantee that no older Australians will suffer disadvantage as a result of changes implemented by their government—if, that is, they can bring themselves to make changes without ordering yet another review. Why won’t the Prime Minister give such a guarantee if his professed sympathy for the aged is genuine? Why won’t any of the relevant ministers give such a guarantee? I think we all know the answer.

As we are approaching Anzac Day, I would like to urge the members opposite to take a close look at those marching in this year’s parades. What will they see? They will see mostly older men and women who, regardless of damage suffered by their bodies caused by lives of hard graft and sacrifice and ultimately the ravages of age, carry themselves with humility, dignity and pride—and so they should. Is it too much to ask that they also be treated with dignity and pride? It is hard to find the words to convey the disgust many of us feel at the government’s treatment of older Australians. I trust the members opposite sleep well at night knowing they are sticking the knife into these people to cover their own ineptitude. I do not, because I feel real shame that this House is even debating measures which are intended to harm the welfare of these people who are held in such high regard by well-minded Australians. The members opposite would do well to pay attention to those marching on Anzac Day. Perhaps they too could learn a little about humility and honour. They certainly need to.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I rise to oppose the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. It is indeed a mean-spirited measure. It is a measure that penalises prudence. It is a measure that again emphasises the gulf between the government’s rhetoric and its actions. The coalition has proposed immediate help for pensioners in a way that offered them security and confidence about their income. But, while pensioners struggle to make ends meet and seek long-term security, the government has fobbed them off with its review of tax and pensions and a one-off, headline-grabbing bonus. Meanwhile it is whittling away the benefits this deserving sector should rightly receive. It was interesting that the member for Warringah made the observation that this government hit the ground reviewing. That is exactly what it has been doing since it came to office—review after review after review. When you finally get action it is very confused action indeed.

Let us look at who is affected by this mean-spirited measure to restrict access to the Commonwealth seniors health card. There are currently just over 270,000 holders of this card, people who are over the age pension age and do not receive any income support payments. They are self-funded retirees and some are service veterans. In the first year of this measure, some 22,000 will lose their eligibility for this card as a result of the government including superannuation income and income salary sacrificed to superannuation in its eligibility assessment.

We hear a lot in this House about the current financial crisis, but if there is one sector of the community that is suffering a financial crisis at present it is our senior Australians, particularly self-funded retirees. I represent an electorate with a high proportion of pensioners and self-funded retirees, including around 2,000 senior health care card holders, and they have left me in no doubt that they are doing it tough. Those relying on benefits are seeing the value of their benefits eroded while they wait for their income to be reindexed. When it is reindexed they face the reality that the cost of essential items—and many of them buy only essential items—such as groceries and transport is rising faster than the indexation they receive.

I remind members that at the last election the coalition proposed changing the method of indexation to better reflect pensioners’ true cost of living. This practical and effective measure, along with a basic increase, is one the government should implement. Self-funded retirees are subject to exactly the same pressures as far as their costs are concerned but with no prospect of any increase in their income. In fact, many have seen a reduction in income as the stock market crash has reduced the value of their investments and the value of their superannuation.

The government may say that as their level of income drops they become eligible for benefits. But that only puts self-funded retirees in the same position as existing age pensioners, and, as I have said, those very pensioners are doing it tough indeed. No-one welcomes the prospect of going backwards, and this poorly thought-through measure proposed by the government will cause many self-funded retirees and some veterans to do precisely that. To live on the age pension is not at all easy.

Many of my constituents were clients of locally based company LKM Capital Ltd, which went into receivership as a result of the financial crisis. Investors lost a valuable source of income when the fund went bust. But, instead of being able to access Centrelink benefits straight away, investors were forced to wait for many months until the receivers could estimate the outcome of the fund’s liquidation. While these investors were waiting, Centrelink was still deeming them to be receiving interest from the fund. Through a very difficult situation and through no fault of their own, a range of self-funded retirees were substantially disadvantaged.

Self-funded retirees have done what governments of all persuasions have encouraged responsible citizens to do—they have made provision for their retirement by saving and investing when they had the opportunity to do so. When times were good, they prudently set aside some of their income for retirement, rather than spend it, so that they would not be a burden on future generations and on the government. Now they are being penalised for their prudence. Many will feel that they are being treated like mugs, that they should have enjoyed their money while they could have, that they should have spent it rather than saved it and relied on the government to look after them. Rather than making the government pick up the tab, they saved so that they would not be a burden on the public purse. They prepared for their own retirement, and what are they getting for their efforts? They are getting ignored by this government. When the government is prepared to run up billions of dollars of debt for headline-grabbing handouts more aimed at winning votes than at economic security, we have a valuable benefit being withdrawn from a very deserving sector of our community.

We see the stimulus package being paid to overseas pensioners and to the deceased. One could quite rightly argue that self-funded retirees are more deserving of support than pensioners overseas and that we should be spending that money in Australia rather than overseas. It could quite rightly be argued that the deceased no longer have a need for such funds and that the funds should be directed to self-funded retirees.

In the face of mounting job losses, the government has failed with its various vote-grabbing packages. It has failed with its cash splashes. We see unemployment continuing to rise. We see an accelerating in-crease in the unemployment rate. The workers at Pa-cific Brands have hardly benefited from the various packages! The Treasurer said that the funds from the stimulus package of December last year were going to be spent on socks and jocks—precisely what Pacific Brands produce. Did that manage to stop the 1,850 redundancies at Pacific Brands? No, it did not. There are further job losses: 150 at Robert Bosch in Mel-bourne, 650 at Anglo Coal in Queensland and New South Wales, 100 at Ernst and Young across Australia, 95 at Carl Zeiss, 150 at the Bank of Queensland in Brisbane, 85 at BHP in South Australia, 41 at Jetstar in Hobart, 150 at Harvey Beef in Western Australia and, recently, 500 at ANZ. That is almost 2,000 job losses and we have not even reached the end of the month.

It is an absolute outrage that this government’s mismanagement is failing to address the increase in unemployment and that this government’s mean-spiritedness is taking away benefits from self-funded retirees. The government calls on Australians to save, save, save for their retirement but they also call on Australians to spend, spend, spend to stimulate the economy. It is quite an interesting dichotomy.

Of course, for many self-funded retirees these days saving is not an option. Nor is it an option for another group affected by this measure—the veterans community. Once again, we see the difference between Rudd’s rhetoric and Rudd’s reality. We all know of his eagerness to wrap himself in the flag and a service uniform, pretending to be one of the lads, on a five-minute visit to Afghanistan, but when it comes to the crunch he is quite happy to see benefits removed from some service pensions. It is absolutely outrageous. Taking a seniors health card away from some of our veterans and stopping the pay of those who risk their lives on the front line is Rudd’s reality rather than Rudd’s rhetoric.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member will refer to the Prime Minister by his appropriate title.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

That is, the Prime Minister’s reality rather than the Prime Minister’s rhetoric. I know other members have mentioned the concessions that will be lost when self-funded retirees and veterans have their cards withdrawn, but they bear repeating. Under the Pharmaceutical Benefits Scheme, holders of a seniors health card pay $5 for a script. When the card is withdrawn, they will pay $31.30—an extra $26.30 per script. For someone who presents only one script a fortnight, that is an extra $681 a year. May I remind the government that many elderly people rely on several medications, not just one, so the extra cost may be multiplied by two, three or four items. Of course, there is the PBS safety net. A cardholder who pays more than $290 for scripts will get them free thereafter. But without a card the safety net threshold is $1,141, a potential loss of $851. And thereafter they still have to pay $5 a script when the safety net applies.

Cardholders are entitled to $500 a year to help pay for essential services. Without a card, they are not. Cardholders are currently entitled to the seniors bonus payment of $500 in this financial year. Without a card, they will not be entitled to any future bonuses. Cardholders qualify for a telephone allowance of $88 a year. Without a card, they do not. There are other possible concessions covering medical bulk-billing, transport, education, recreation and entertainment that will be lost if the person does not have a card.

All these cuts are mean and, I would say, unnecessary. They are hitting particularly hard those who are most vulnerable, those who have provided for their own retirement and some veterans. For most elderly people, the prospect of falling ill and the difficulty of finding the money to pay for medicines is a constant worry. This measure will increase that concern for a wide cohort of Australians. There is no doubt that, in response to this change, some people will fail to take the medication that their doctor prescribes, purely because they will no longer be able to afford it. The effect of that on the community is increased long-term cost to our health system. It is quite clear that noncompliance with medical directions from a GP is a major source of poor health outcomes, and increasing the cost of medicines to a group who cannot afford to pay can only make that situation worse than it currently is.

We have a situation where the government is removing a vital benefit. Access to quality health services is something that we see as universal, and assisting our senior Australians to provide for their own health outcomes is something that we should be encouraging. Rather than this benefit being taken away, it must be retained. I would like to quote from a letter than I received from my local branch of self-funded retirees. It is from Mr Ross Gooley, the President of the Coffs Harbour branch of the Association of Independent Retirees. He said:

I ask you to consider very carefully the further damage that will be caused when inevitably the proposed measures result in the loss of valuable and much-needed benefits to non-wealthy self-funded retirees.

That is precisely the point. We are not stripping benefits away from this nebulous class of millionaire pensioners. We are stripping away benefits from non-wealthy self-funded retirees—retirees who saved for their retirement and who, by being prudent and frugal, are trying to look after themselves in their later years. Rather than rewarding that prudence, rather than rewarding that savings effort, we are basically kicking sand in their faces. This is a measure that should be condemned. It is a measure that I cannot support and I know that it is a measure that will be raising great outrage within my electorate.

Joanna Gash (Gilmore, Liberal Party) Share this | Link to this | Hansard source

I will keep my statement short and to the point. I am opposed to the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009 on a number of grounds. Primarily, it will reduce accessibility for some senior Australians, reversing the generosity shown by the previous government. By changing the income test and counting in more income, you are going to disqualify people who had not previously been affected. In those terms, it is a retrograde piece of legislation; it is going backwards and it is not worthy of my support.

This bill represents a roll-back as far as entitlements go and it is yet another snub to self-funded retirees. To rub even more salt into the wound, this meanness is being introduced at a time when the government has written itself an open cheque for up to $200 billion in foreign borrowings, some of which will no doubt be spent on pet projects. What is this government going to say to those affected self-funded retirees in Gilmore if this bill is passed? ‘No, you’re not entitled because you’ve saved too much over the years and now we think you’re too rich’? Remember that the Commonwealth seniors health card was originally designed to meet the needs of people who may have been asset rich but income poor—people like farmers or pensioners whose blocks of land have been inflated by the Valuer General, like some of my elderly constituents who built their homes on a waterfront 40 or 50 years ago. Without their owners having doing anything, these blocks are now worth over a million dollars, and they are occupied by older residents on a pension or self-funded retirees living on the poverty line, many of whom have been forced out of their homes because they cannot afford to pay the astronomical rates and land taxes imposed by the state government. And yet one wonders if it is only a matter of time before these homes are also included in the asset test.

This legislation will definitely push some people into poverty because they will be compelled to pay for health and medical costs that were previously, under our government, subsidised. If this bill passes the House, this will no longer be the case for some of them. I am a tad confused at the apparent conflict in direction this government are taking. Here they are tightening up benefits to senior Australians—and they want to give them less—yet, at the same time, they are splashing around bucketloads of money for people to spend in the shops every quarter. They are spending $28 million to advertise the economic stimulus package, blowing $13 million on GroceryWatch—which achieved nothing—not to mention the petrol commission or Fuelwatch. And the list goes on.

This government is driving up national debt to unheard of levels, knowing that the current members of government will not be around to clean up the mess—but their children certainly will. This government is prepared to play around willy-nilly with taxpayers’ money yet can still talk about looking after an ageing Australia, uttering reassurances as to how valued our older people are. As I said, this is a retrograde step, yet, in the budget papers, how did the government describe it? Let me quote the words:

This measure will increase fairness …

That is a very subjective view. I wonder if the self-funded retirees in Gilmore who stand to lose out on this will share the sentiment.

Since July 2007, persons aged 60 or more with income from private taxed superannuation sources have had their superannuation income treated as being tax free. In so many ways, the advances made by the previous government are gradually being eroded, and this is yet another example—give with one hand and take with the other. Arguing as to what should constitute income misses the point. The real issue is that this government is actually taking something away that has been given or, in most cases, earned over many years to gain self-sufficiency in later life.

The disposable income of this category of affected person will be reduced significantly and dramatically for those individuals. More pressure will be placed on a health system that is already struggling as it is. And the quality of life for some will be lowered. It is also reasonable to assume that the life expectancy of some people will be compromised as they are forced to introduce lifestyle economies to cope with the change.

It was only a few short weeks ago that the government were critical of the coalition’s opposition to the promised spending splurge contained in the nation-building bill. We were lambasted for daring to question the motives of the government and why they needed to splash so much money around in the way they did, especially when it seems that the December splash did not produce the results prophesied. The December quarter actually went into negative growth, but maybe the government suspected much earlier that that might be the result and deliberately pumped half the surplus into a pre-Christmas splurge. Now, when we are saying, ‘Don’t cut benefits,’ the government are equally critical. That is two bob each way—and, as I said before, mixed messages.

The fact is that if you are not on an age pension you rely on an independent income as a retiree. If your adjusted taxable income is less than $50,000 for a single or $80,000 for partners, strap in! For seniors who lose the CSHC the effects are dire. Under the PBS, CSHC holders pay $5.30 per script. After losing it, they will pay $32.90. With the seniors health card, a senior reaches the safety net threshold when he or she has paid a total of $318 for scripts. Prescriptions after that are free. Without a Commonwealth health card, the safety net threshold rises to $1,264.90, after which a fee of $5.30 per script still applies. With the Commonwealth seniors health card, a senior is eligible to receive an annual allowance of $500 to assist with payment for essential services, for which pensioners are granted concessions. But, at July 2009, many seniors will lose their entitlement.

Commonwealth seniors health card holders will receive a lump sum payment of $500 in the 2008-09 year. If they lose their card because of eligibility changes, they will not participate in any further bonus payments. Commonwealth seniors health card holders qualify for a telephone allowance of $34.60 paid every three months to qualified income support recipients or Commonwealth seniors health card holders. The card allows holders to benefit from a range of concessions granted at the discretion of providers. These include medical bulk-billing and household, transport, education, recreation and entertainment facilities. They will be greatly missed by persons who will now become ineligible for the card.

I will certainly be telling the self-funded retirees in Gilmore how little this government thinks of them. Is this intended to be their reward for working hard all those years so they could be as independent as possible? It is not a good message. I am bound to remind my constituency that this intervention was not mentioned in Labor’s election campaign, so the government certainly cannot morally claim that it has been handed a mandate to reduce benefits to thousands of people.

These are tough times, and what this government is doing is making things even tougher for thousands of people who are not in any position to make a career change. This is just another nail in the coffin for self-funded retirees, who have been passed over time and time again by this government. Where will it stop? I am grateful for one thing, and that is that our veterans will be largely spared from this bill, at least for the time being—but who knows what tomorrow will bring with this government? It is a fact that, as our population ages, there will be more demands placed on health services, which are already stretched to the limit. Is it fair, therefore, to penalise the very people who tried so hard to look after themselves and may well now need the support of the government in their autumn years?

The savings from this intervention are projected to be in the order of just over $20 million a year, over four years. Twenty million dollars is all that will be saved, at the expense of some older Australians who should be rewarded for their efforts, not punished. Contrast that with the $200 billion blank cheque that Labor has written for itself, and tell the constituents of Gilmore how this bill is an act of compassion and understanding. How can you, Prime Minister, and your government now stand in the House and say we need to save $20 million a year and, in the same breath, blow a budget surplus of $20 billion plus and then even more again this month? What credit are we spending in March—$42 billion? So this government is going to take this money from a few thousand aged citizens and give it to someone who is employed, to help subsidise, perhaps, the purchase of new televisions, the money for which will most likely end up in a foreign country.

This intervention is virtually tax by stealth. It is the action of a mean-spirited, sneaky government. In these uncertain economic times, we need to be reassuring and motivating people—the Prime Minister has said as much on many occasions—certainly not frightening them and certainly not creating a precedent for another foray into more tax collections in the future, which this bill will do. Perhaps this government will now consider setting aside some of these savings to fund a happiness workshop for the likely victims of this bill, a workshop similar to that which the bureaucrats of the Department of Education, Employment and Workplace Relations attended at a cost of $642,000 to the taxpayer. What is the government’s response to all this for Gilmore’s self-funded retirees? The answer is: ‘Go visit Centrelink.’

Danna Vale (Hughes, Liberal Party) Share this | Link to this | Hansard source

I agree with the previous speaker, my colleague the member for Gilmore, that this legislation is mean spirited. It is sneaky, it is unfair and it is also un-Australian. According to the explanatory memorandum, the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009 implements a 2008 budget measure relating to the adjusted taxable income test for the Commonwealth seniors health card. It states:

The measure will ensure that income received by seniors is treated in a similar way, will align with the age pension the treatment of income salary sacrificed to superannuation, and will ensure that the income test is applied to all cardholders consistently.

What nice bureaucratic language! When this measure was announced in the last budget I was wondering how this government was going to explain this bill to our self-funded retirees and to many of our veterans. So, for the benefit of my constituents, I would like to describe this bill in simple language. The Rudd Labor government is taking the Commonwealth seniors health card away from many senior Australians. This bill will push many seniors over the income thresholds by including income from superannuation and income that is salary sacrificed to superannuation. So while the threshold limits will remain the same and the superannuation drawings from a taxed fund will remain untaxed, these drawings will be added to a person’s adjusted taxable income for the purpose of assessing eligibility for the Commonwealth seniors health card.

The loss of the Commonwealth seniors health card will hurt many senior Australians as it provides access to discounted prescription medicines through the Pharmaceutical Benefits Scheme. Cardholders currently pay $5.30 per script, but after losing it they will pay $32.90 per script. Cardholders also benefit from the PBS safety net threshold because scripts are free once they have paid a total of $318 for pharmaceuticals. Currently cardholders also have access to the seniors concession allowance of $500 a year and a telephone allowance of $34.60 per quarter for help with essential services and expenses. Cardholders may also benefit from other services, such as bulk-billed GP appointments and a reduction in the cost of out-of-hospital medical expenses above a concessional threshold through the Medicare safety net.

In some instances, state and local governments and private providers offer additional health, household, transport, education and recreation concessions at their own discretion. These benefits are of great assistance to our self-funded retirees and to our veterans. Self-funded retirees have already been hit hard by the current global economic circumstances. Many have seen their savings decrease and their rates of return fall significantly. Indeed, one self-funded retiree I spoke to last weekend in my electorate said that since Christmas his income has reduced by over 50 per cent. But instead of providing extra assistance this heartless government is cutting assistance and forcing these retirees to dig deeper into their savings. This will ultimately lead to a decrease in their standard of living. I might point out that the recent $43 billion stimulus package had nothing in it for self-funded retirees. I have had a number of my constituents from Hughes contact me with concerns about this matter. I would like to read a letter from a Mr John S., a constituent from Engadine. He says:

I refer to the announcement in the 2008 Federal Budget regarding proposed changes to the income test for assessment of the Health Care Card. I specifically refer to the proposal to include superannuation and pension benefits paid for this test.

Access to the Health Care Card provides reduced health care costs for those retirees whom are ineligible for Government income payments, and in this regard greatly assists self funded retirees in funding medical expenses.

The proposed change to the Health Care Card income test greatly restricts access to this vital Government service for a large percentage of self funded retirees. The net result of this change will likely be that self funded retirees may have to access the Age Pension sooner than would otherwise be the case as savings will be depleted at a faster rate due to increased medical expenses.

Indeed, that is exactly the problem that these retirees will be facing: a decrease in their income. I am advised that the National Seniors Association and the Association of Independent Retirees are also opposed to this bill. The Association of Independent Retirees has brought it to my attention that a superannuant drawing down funds from their superannuation fund for a special need or emergency situation could be penalised because Centrelink would consider such a drawdown as income. The February newsletter from the Sydney St George branch of the Association of Independent Retirees clearly sets out the concerns of its members. It states that this legislation is:

… fraught with anxiety, and much uncertainty. There is the potential for significant financial loss, if pharmaceuticals and medical services must be purchased at the general price, and remembering elderly people usually are receiving treatment for chronic conditions and diseases. For example, 5 medicines per month the difference is $25 (5x$5 per script) to $150 (5x$30). Many retirees will not have that level of surplus income, or flexibility to seek an increase to the income stream.

The Government is neither recognising nor assisting retirees, in situations when a special or emergency need arises, in which case retirees must access their retirement capital. To create such uncertainty and doubt, when retirees need extra funds, but will be facing extra costs for medicines and medical services, simply because they have been denied the Commonwealth Seniors Health Card when their ‘gross income’ exceeded the income threshold.

This is the essence of what the Government has forecast when announcing that legislation will be introduced to change the eligibility criteria, when assessing gross income, for those retirees applying for and holding a CSHC.

If there are unrealistic opportunities, if there are abuses by workers applying for the CSHC, then those should be addressed. For retirees who need access to their funds for emergencies and living expenses, then the members of A.I.R. and the wider community of elderly retirees, seek your considered review of what is being proposed by the current government.

I am advised that, in opposing this bill, the National Seniors Association and the Association of Independent Retirees also point out that our senior Australians are anxious about this legislation because, should the drawdown be substantial and exceed the income threshold, the entitlement to the Commonwealth seniors health card and its related benefits, which are very important, would be lost to them and would cause significant uncertainty and hardship in their declining years.

The Association of Independent Retirees also makes this point:

In situations where the draw-down funds have been used to pay the accommodation bond to a hostel for low-care accommodation, or the money is used to replace motor car for transport, or the money is needed for home maintenance, it is difficult to understand the purpose of this ruling, and extremely distressing because the supposed ‘gross income’ would, quite possibly, disqualify the retiree from holding the Commonwealth Seniors Health Card for the remainder of the year.

This association asks:

How can the transfer of one’s own funds from one source to another and then spent on a necessity be regarded as income?

How indeed? The people in my constituency in Hughes ask this question in honesty.

The former coalition government worked hard to pay off the previous Labor government’s $96 billion debt so that we could extend some assistance to self-funded retirees and our senior Australians who were not claiming income support. Now, 15 months after getting into government, the Labor government is rolling back this support. These proposed changes were not mentioned prior to the last election.

Recently we have learnt through the media that the Rudd Labor government is looking at options to roll back other measures the coalition government provided to senior Australians. The media has reported that the Labor government could roll back the following measures: including the family home in the assets test, increasing the assets test taper rates and increasing the income test taper rates. These measures could force many of our senior Australians to sell their homes, they could reduce their incentive to save for retirement and they could provide a disincentive for them to earn additional money. During these difficult economic times Mr Rudd should not be punishing self-funded retirees who have planned prudently for their retirement with little dependence on government support. Senior Australians do not deserve to face the full brunt of this heartless Labor government’s razor gang. Mr Rudd needs to guarantee that no senior Australian will be worse off because of his pension review.

The coalition is strongly opposed to these proposed changes. As I said at the very beginning, they are unfair, they are mean spirited and, most particularly, they are an un-Australian way to treat our senior Australians, who have forged this country into one of the greatest democracies the world has ever seen. I cannot in good conscience support this bill and, on behalf of my constituents in the electorate of Hughes, I do not.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

I rise to join with my coalition colleagues in speaking against the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. This bill seeks to toughen eligibility requirements for the Commonwealth seniors health card, or CSHC, from 1 July this year by including superannuation drawings from a tax fund as taxable income in the CSHC income test. This will affect many of Australia’s 278,000 CSHC holders, with approximately 22,000 people to lose their entitlement to the card.

The current approach is that the CSHC is available to seniors who, although they are of pension age, do not receive an income support payment from the government, provided that their adjusted taxable income falls below certain limits. Currently, the threshold limits are $50,000 for singles and $80,000 for couples living together. Significantly, the adjusted taxable income payment does not include non-taxable drawings from a tax fund on which a contribution tax was paid when the funds were being accumulated—in other words, a taxed fund.

The income thresholds for the CSHC are not indexed in any way and have not been altered since 2001. The Australian Association of Independent Retirees suggests that, since this time, there has been an increase of approximately 20 per cent in the cost of living, but there has been no associated increase in the income threshold for the CSHC. Effectively this legislation will strip benefits away from 22,000 non-wealthy, self-funded retirees, with estimates indicating that these seniors will be at least $2,000 a year worse off under this new scheme. This will affect access to many government benefits, including cheaper prescribed medications. CSHC holders currently pay $5.30 per script but would face charges of up to $32.90 per script. Under the PBS safety net the threshold for CSHC holders is $318, but some would face a threshold rise to $1,264.90, after which they would still have to pay $5.30 per script. This would also affect the seniors concession allowance, which helps pay for essential services; future seniors bonus payments—in 2008-09 there was a payment of $500; the telephone allowance, which is $34.60 every three months; and a whole range of other benefits such as bulk billing, transport and household facilities.

It is not surprising that the National Seniors Association and the Association of Independent Retirees, or AIR, are against these changes, as they would detrimentally affect many non-wealthy, self-funded retirees who have prudently planned for their retirement with little dependence upon the government of the day. The AIR has raised issues about the lack of clarity about withdrawals from superannuation funds being included as income. The AIR president, Theresa Kot, has raised concerns about the inclusion of lump sum withdrawals in the expanded income test, which would mean that if a senior makes a one-off withdrawal to buy a car or to pay a bond to enter an aged-care facility it would be treated as income, which would potentially disqualify them from the CSHC for that year. Centrelink has advised the AIR that they will reinstate the card if you can show proof that the one-off expense was necessary, but still the AIR is understandably uneasy about these proposals.

My electorate has one of the oldest demographics in Western Australia, with a large retiring population. There are approximately 5,500 CSHC holders who could potentially be affected by these changes and they are very nervous. I have been contacted by the Peel branch of the AIR, who are extremely active advocates for self-funded retirees in the electorate of Canning. They are strongly against this legislation, which may have a big impact on Canning’s CSHC holders. I will certainly be reminding them of what the government is doing to their future.

I am contacted by both pensioners and self-funded retirees on almost a daily basis. They raise concerns about the strain on their household budgets caused by increases in the cost of living over the last few years, coupled now with the decrease in the value of their investments. These changes will have a drastic effect on Australia’s non-wealthy self-funded retirees, who have already seen the value of their assets dramatically decline over the last year through no fault of their own.

Let us look at Labor’s approach to seniors. This is yet another in the long line of policy changes that the Rudd Labor government has introduced but did not mention at all prior to the last election. However, this measure is hardly surprising in light of the Labor government’s overall approach to seniors in general. The ongoing delay in respect of increasing the base rate of pensions is just one example of the indecision of the Rudd Labor government which is hurting elderly Australians. You will recall we endeavoured to bring a bill to this House to increase the rate of the age pension, and the Labor Party would not let us debate it.

On 22 September 2008, we did introduce into the Senate a bill designed to immediately increase the age pension by $30 per week. This proposal also applied to recipients of the widow B pension and recipients of the single service pension. Despite the Prime Minister and the Minister for Finance and Deregulation both admitting they, themselves, could not live on the current rate of the pension, the government would not support this bill. How mean!

The Harmer review has now responded to the government. However, not only has this report not been made public but still no action has been taken by the Labor government in relation to this matter other than a few words saying that they would look at in the budget. Media reports have also indicated that the Rudd Labor government may be considering other changes that will drastically affect senior Australians, including changes to the assets test to include the family home, as well as to the assets test taper rate. In comparison, the coalition introduced many proposals of direct benefit to senior Australians. Under the Howard government, we introduced amendments which saw 85 per cent of seniors of age pension age qualify for either CSHC or pensioner concession cards in recognition of the extreme importance of the benefits they provide. More broadly, in 1997, the coalition government linked the age pension to growing incomes—in other words, 25 per cent of the MTAWE, in addition to the CPI, whichever was higher—as well as introducing the utilities allowance currently available to CSHC holders and age pensioners to assist with the cost of bills such as gas and electricity. Additionally, in 2007 the coalition government passed legislation to change the assets test taper rate from $3 to $1.50 for every $1,000 of assets above the allowable assets limits. It also removed the tax on superannuation benefits paid from a tax fund for people aged 60 and over from 1 July 2007.

All of these measures, and many others introduced by the coalition, sought to improve the quality of life for Australia’s pensioners and self-funded retirees in recognition of the contribution that these people have made to Australia throughout their lives. And so we should.

Finally, I am pleased to speak against this bill, as it would have a detrimental effect on non-wealthy—I repeat: non-wealthy—self-funded retirees in my electorate and across Australia who are already doing it tough as a result of the global economic crisis, which is no fault of their own. We are the party for the battlers. The Labor Party only talk about it. It is about time the Rudd Labor government gave our seniors a fair go and came clean about their plans to change the government’s assistance for Australian seniors.

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Early Childhood Education, Childcare, Women and Youth) Share this | Link to this | Hansard source

I rise to join my colleagues in speaking against the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. This bill, if passed, will have an extraordinarily detrimental impact on self-funded retirees, particularly those living in rural and regional Australia, including in my electorate in north-east Victoria. It will change the rules governing income assessments on self-funded retirees to determine their eligibility for the Commonwealth Seniors Health Card.

The Labor government is asking parliament to support them in introducing a new clause in the income test on seniors to allow for the inclusion of income from superannuation—an income that is salary-sacrificed to superannuation—to a retired person’s adjusted taxable income for the purpose of assessing their eligibility for the Commonwealth Seniors Health Card. This is a direct attack on self-funded retirees. You would think, at a time when many of them have suffered because their assets and their finances have been frozen, that this government would think about the hardship they are facing. But, no, these people are under attack. These are the people who have worked hard to build their savings, to build their superannuation and who have continued to manage their superannuation into retirement. They will definitely suffer if this bill is allowed to pass and changes are made to the income test to include superannuation.

There are more than 19,000 people aged over 65 in my electorate. This figure is predicted to grow to almost 29,000 people by 2020 and to over 41,000 people in 2035. A very significant proportion of the population in my electorate are retired, and many of them are self-funded retirees. Many of them, in their retirement, do come from other parts of Australia—for good reason—to retire in the north-east.

So, despite what the Labor government would have people think, the majority of self-funded retirees are not wealthy individuals squandering their super during retirement years. It is no wonder that those on the other side show no interest and total disregard for the plight that will face our seniors in retirement who have changed their arrangements after the previous government changed the income test to allow them to include superannuation income.

Many of the self-funded retirees in north-east Victoria do live on a restricted pension-style income, just as those who live on a government-funded age pension do. The difference is that self-funded retirees have earned and saved their retirement income during their working lives. This bill and this government directly want to punish them. I suppose it is part of the class war of envy that is becoming more and more apparent from the government during these difficult times—when they panic and have a knee-jerk reaction in responding to the economic situation confronting us. If this bill is passed and the government is allowed to include superannuation income in the income test for the Commonwealth Seniors Health Card, it will jeopardise the eligibility of many who have come to rely on it.

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 Indi will have leave to continue speaking when the debate is resumed.