Rowan Ramsey (Grey, 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. This bill once again shows Labor’s contempt for those who work hard all their lives to support themselves. This is in fact the politics of envy or class warfare. On this issue the Labor Party is showing no understanding of the ageing crisis in which we find ourselves in Australia. I would like to refer the members opposite to the Intergenerational report on ageing in Australia commissioned by Peter Costello and ask them whether they have any idea of how difficult the challenge is going to be for Australia to meet its commitments to its ageing population.

The proportion of those over 65 is expected to more than double in the next 40 years from 2.8 million to 7.2 million. The number of those over the age of 85 is expected to almost triple. There is an aged-care crisis in Australia and the minister is asleep at the wheel. I have previously spoken on this issue in the House and brought my concerns to the House. I refer to my own speech on 25 November last year on the Aged Care Amendment (2008 Measures No. 2) Bill. I raised issues which concern me about our ability to meet the challenge, which will be facing us in the next 10 or 20 years in Australia, to look after our aged.

Since that speech we have heard silence from the minister. I have been travelling around my electorate talking to people in the aged-care sector and they are very concerned that they do not have the ear of the minister. I have at least two aged-care facilities on my patch which are in danger of closing their doors. This may seem a roundabout way to speak about the Commonwealth seniors health card but, by attacking those who choose to support themselves, we are attacking the ability of future generations to support the aged-care industry in Australia. We need people who are prepared to make the savings and the sacrifices to provide for their own future. This bill attacks that.

The previous government understood this and totally overhauled the superannuation rules of Australia. Why? Because they knew what challenges were facing Australia over the next 20 years. Smart governments support those who work to remove themselves from the welfare system. It is no small achievement to save enough money during your working life to provide for your retirement. Now, with superannuation wealth being washed away in falling equity markets and with cash investments returning record lows, we have a government that is stripping away the few meagre benefits which are enjoyed by self-funded retirees, who make savings of $10 or $20 a week year after year, making the sacrifice. They do not ask for much; they just ask for a bit of acknowledgement from the government on how difficult it is to make those sacrifices. Part of the pledge of the previous government was to provide a Commonwealth seniors health card to those on the borderline to make sure they maintained their position.

This government continues to load debt onto the next generation of Australians. We have had cash splash 1 and 2, Pink Batts, a $6 billion car plan, school gyms instead of teachers and now we have the Ruddbank—all on borrowed money. The government is planning to leave our children at least $200 billion in debt, plus the state borrowings. In five years time this country’s governments will be in debt at least $300 billion. We know the government want kids at school to pay for their own school halls and libraries, and now it attacks those who are prepared to lessen the burden—self-funded retirees. It is all about satisfying the politics of today and the next election and not planning for the next generation over the next decade. The government has stopped saving and is spending savings.

This bill will change the means test to include superannuation payments, which means that around 278,000 people, including service veterans, are in danger of losing their Commonwealth seniors health card. Health card recipients receive concessions on prescriptions, a telephone allowance and a seniors allowance of $128 every three months to help deal with regular bills like power, water and car registration.

Self-funded retirees have often felt unloved. The previous government picked them up said, ‘We will encourage you; we will give you a hand.’ Just on the toughest part of the journey this government have let their hands go and let these people slip. They have failed them. They are victimising them. They are taking away the few meagre benefits they enjoy. The act of including superannuation in the income assessment is a sneaky move. It would have been so much easier just to lower the means test. But the government had hoped they could make this change and it would slip in under the radar. They hoped that it would not be picked up and that those who are retired in our communities would not feel anger at the government. They hoped that the electorate would be duped into believing those with adequate superannuation are wealthy. They are not wealthy; those with adequate superannuation are in fact Middle Australia. They are those who plan for the future. They are those who know they have the ability to help Australia. They have the ability to help future Australians and they are making their contributions. This bill rips away that tiny bit of support and encouragement that we have been giving to them. This is a class-driven attack on Middle Australia; it is also an attack on the future of Australia. It helps remove self-reliance. I oppose this bill.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

I rise to make some points about the bill we currently have in front of us, the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. It is no secret that the last government put in place an enormous number of benefits that were able to ease the lives and the burdens of many people in Australia, including seniors, whether they be self-funded retirees or just seniors generally. The Commonwealth seniors health card provides access to discounted pharmaceuticals through the Pharmaceutical Benefits Scheme, the seniors concession allowance, the telephone allowance and the seniors $500 bonus. The fact is that these cardholders can benefit from other concessions at the discretion of providers, such as medical bulk-billing or household, transport, education and entertainment concessions, just for having access to the Commonwealth seniors health card. However, what we have seen is a rollback of all of the great achievements that were put in place.

The coalition’s achievements for self-funded retirees were centred around, firstly, paying off the previous Labor government’s $96 billion debt, which was costing us some $9 billion per annum in interest. Once that was paid off we then moved to extend assistance to self-funded retirees who were not claiming income support. The coalition government at the time improved the eligibility for Australian government concession cards so that over 85 per cent of people over age pension age qualified for a health care card—a Commonwealth seniors health card or a pensioner concession card.

The coalition significantly increased the income limits of the Commonwealth seniors health card in 2001 so that more self-funded retirees became eligible for a CSHC. Due to the coalition government’s measures, around 300,000 people held the Commonwealth seniors health card, compared to just 35,000 when Labor left office in 1996. I think that is a significant number when you look at paying off $96 billion in debt and saving $9 billion a year in interest payments on that debt. The coalition expanded the number of holders of the seniors health card to over 300,000 people, compared to just 35,000 when that significant debt was left by Labor in 1996. These things should not be forgotten, because this is about the climate that we are experiencing now. This is the beginning of the downturn. This is the beginning of the debt cycle, and we have to recognise that when there is a debt cycle such as this, once the money has gone, then people must pay.

The coalition legislated to link pensions to 25 per cent of male total average weekly earnings, MTAWE, and introduced the utilities allowance and the seniors concession allowance. The coalition increased pensions at two per cent a year above the rate of inflation. After January 2007, for pensioners on the land—and I felt this was particularly important to mention here this evening—the concessional asset test treatment was applied to all land adjacent to, and on the same title as, an age pensioner’s principal home, which made a very, very big difference for those people who were on properties and were disadvantaged by the curtilage rule. That was a major advantage. In short, pensioners were no longer penalised for land they had lived on for 20 years or more continuously but were not able to use to produce. That benefited, at the time, around 17,000 people.

We introduced some of the biggest reforms to superannuation ever and we introduced many safety nets for the people of Australia after that debt was paid off. However, we are now seeing that, after 15 months of being in government, the Rudd Labor government are rolling back all of that support that was put in place. During the 2007 election, Prime Minister Rudd promised to ease the cost-of-living pressures for senior Australians. Instead of acting, the Rudd government have now announced that they will roll back those great benefits that were achieved for the people of Australia through the hard yards that the people of Australia were able to do, with some very conscientious guidance from a government that was concerned with fiscal management.

In the short time that I have to speak here this evening, I cannot do justice to this bill, because we certainly have to get this legislation finished this evening, but I will finish by saying that, at this critical time of global economic difficulties, when we have seen many self-funded retirees losing much of their income stream, we seem now to be forcing them to face more uncertainty. They are already living in the most extreme of uncertain times. They are fast becoming the poverty stricken people of Australia. It is time that we recognised what they have given to this nation and stopped penalising those people, who pay for themselves and support themselves for the future and are now being penalised by this government.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

During the 2007 election, the Prime Minister and Labor promised to ease the cost-of-living pressures for senior Australians. What a joke! The PM promised he would govern for all Australians—an even bigger joke. Now it is time for the Prime Minister and Labor to guarantee that no senior Australian will be worse off under his government. Clearly many will be.

The bill before us today, the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009, will effectively cut 22,000 senior Australians off from their seniors health cards. It will do this by adjusting the taxable income test for the Commonwealth seniors health card. That test is currently at $50,000 for singles and $80,000 for couples. By including income from taxed superannuation funds, the income will be bulked up, in conjunction with their pension, to create a new income level. While the threshold limits will remain the same, at $50,000 and $80,000 respectively, the superannuation drawings from a taxed fund will remain untaxed for ATO purposes. But these drawings will be added, as I said before, to adjusted taxable income for the purpose of assessing eligibility, effectively pushing many seniors over the income test level and stripping them of their card.

There are some very serious implications of this. Australians who have their cards taken from them will suffer in many ways. Under the PBS, the Pharmaceutical Benefits Scheme, Commonwealth seniors health card holders pay $5.30 per prescription. Once the card is stripped away from them, they will be paying $32.90. Under the PBS safety net, a cardholder pays a total of about $318, I think, as a maximum in any 12 months for their scripts. Without the card, they will pay $1,264.90 before the $5.30 fee applies. If a husband and wife have, between them, five prescriptions a month, the cost to them will be $1,350.

I did a little exercise which none of the speakers on either side of the House have done. I asked: what will this really cost the people who will have their card stripped away? Let me take you through the expenses of a typical husband and wife. With regard to the healthcare card and the pharmaceutical benefits, as I said, five prescriptions a month between husband and wife will cost them $1,356. Then there is the utilities allowance, which is indexed and is now at $514. The bonus plan, presuming Labor continue it—there are no guarantees of that on the basis of their last performance—will be $1,000 between the two of them. For the phone, which has now gone up to $34.60 a quarter, it will be $138. For the doctor—and a lot of doctors use the card to decide whether to give you bulk-billing—it will be another $215. If they go to the movies together once a fortnight, say, over a year that would be another $150 in concessions. Then I got onto a provincial bus company and asked about two to three trips a week of a medium-sized run—in fact, I used my own hometown of Bundaberg as an example. A couple would save $725 in travel a year. If you put those together you would have nearly $4,100. That means an average couple in this usual situation are going to have $80 a week ripped off them. Just think about that. Already pensioners are in dire straits. The previous speaker spoke about some of the things we did to improve the pension: brought in the MTAWE factor, brought in the utilities allowance—all those sorts of things. But, even then, it is way below an acceptable level.

The very core of our philosophy should be that aged people are looked after and looked after properly. How can we improve the lot of older Australians? Labor is content just to strip away benefits and entitlements and to bring everyone back to one standard. The thing that troubles me more than many other things is the suggestion that has come from a number of forums in which Labor members have participated—and I have not yet seen an unequivocal denial of it—that there may be some form of a means test on the family home. The idea that troubles me is that, if someone through some fortuitous means lives in a particular suburb and that particular suburb becomes the fashion of the day—although it may not have been the fashion of the day when the couple built their home—they may be penalised because their home has gone up in value and is worth $1 million or $1½ million. At the end of the day, it is just a house for them. It is the house of their memories, the house in which they brought up their kids. What are you going to do, rip it off them? Are you going to bring in a means test that is so severe that people have to sell those sorts of homes and go into some lower form of accommodation? I think that anyone seeing what is being done with these 22,000 Australians would have cause to be quite concerned. We paid $96 billion of Labor’s debt. That gave us the capacity to do things: to introduce the MTAWE factor, to give bonuses, to arrange superannuation schemes, to bring in the co-contribution scheme—all those things to enhance the income of the modern income earner. All this new government is doing is winding it back the other way. If the family home becomes part of the assets test, it really will be a bad day for pensioners.

Let me speak briefly for those Australians who are on what we might call a modest income. Let me talk about people who are on a below average income whose superannuation scheme is not enough and, indeed, is much less now. A lot of my constituents tell me that the value of their super has dropped 20 per cent, 30 per cent, 40 per cent or even, as I have heard, 50 per cent. That has really denuded their income, and they have become more reliant on the pension. In a Pension Review submission, the AIR challenged the following statement made in the Bills Digest for the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2008 Budget and Other Measures) Bill 2008:

With the income test limits being set at $50 000 single and $80 000 partnered, the CSHC is now no longer a low-income health card.

I think the AIR were right to take offence at this statement because, on the one hand, the government say that a retired couple living on $80,000 a year should not qualify for the card yet, on the other hand, they say a working couple on the same income should receive a $900 bonus.

So this is quite unfair. I would like—but the short time we have been given does not allow me to do so—to talk about the general position of self-funded retirees. This is a very bad move. This cuts at the core of people who have been self-sufficient all their lives. This will lower their standard of income and sends a signal to the retiree community to be very fearful of this government.

Bruce Scott (Maranoa, National 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. I have to say that this is a very savage attack by this Labor government on an estimated 22,000—those are the figures we have—very special Australians. The measures will impact on Commonwealth seniors health card holders, the older generation who helped build this nation. They were always very, very careful with their money and saved for their future, but we have a savings measure here from a government that has already appropriated $52 billion but cannot find the money to provide 22,000 very special Australians with a health card.

Another group who I know are going to be impacted by this very savage measure from a very cunning, heartless Treasurer is our veteran community. I was at a small community hall on the weekend. My good friend and colleague the member for Hinkler would know it well—Goomburra in the Goomburra Valley, east of Warwick. I was there on Saturday. I went inside the hall and saw that the rolls of honour of those who served from that region are proudly displayed there: the First World War, the Second World War, Vietnam, Korea and Malaya. I particularly noticed the First World War roll of honour. There would have been 27 young boys who went away to defend the values that are enshrined in our Constitution. I looked beside that roll of honour and I found that, of the 27, 10 were killed serving our country, one was gassed and another wounded. Almost 40 per cent never returned to Australia, and two who returned were severely maimed.

We may only have one veteran from the First World War still alive in Australia, but the point about the veteran community of this nation is that they were prepared to risk their lives to ensure that we could have a better life. They are going to be caught up in this government’s heartless action that will take away from them the seniors health card, which brings benefits other than just the PBS. One of the things that will hurt, particularly in my rural communities, is the stripping of the telephone concession. The telephone is a vital piece of equipment for people living in rural Australia. It is the way that they communicate with outside communities. But that concession too will be stripped away as a result of this card not being available to those veterans who were entitled to the seniors health card under the former government. Veterans, seniors and couples in rural Australia have to travel great distances and have much higher living costs for petrol and food, yet this government is prepared to strip away a benefit from very special Australians—22,000 of them, as estimated in the budget papers.

This is a direct attack on some of the most vulnerable people in our community, people we should hold up and value and be prepared to thank for their contribution to this nation. What we see from the Treasurer, the Prime Minister and the Labor government is a heartless act. The very cunning Treasurer and Prime Minister have now broken yet another promise—a promise made prior to the last election that they would look after these communities and that they would govern for all Australians. We find now that they are prepared to break this promise. I am ashamed to say that there is a parliament here in Canberra, where the Labor Party has the Treasury bench, that is going to strip away the seniors health card from 22,000 very special Australians. Members of the Labor Party should hang their heads in shame. I will join my colleagues in opposing this bill.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I rise to express concerns about the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009. Without speaking about the conceptual issues of the rights and wrongs of means-testing or access to medical services in regional areas, my argument for government to consider and reflect upon is one of timing, with regard to the global and national economic circumstances that we have seen flood this parliament and the lives of many over the last three months. Independent retirees and those who have access to Commonwealth seniors health cards presently are not immune from the rapid changes that we see in so many sectors.

In many ways the timing of this change could not be worse. We see a triple whammy at the moment of low interest rates, a significant fall in share market investments and a focus—in what I consider to be a welcome fiscal stimulus package—on the borrowing strategies rather than the savings strategies. Those who are living off savings are, more than anyone, feeling the full impacts of the triple whammy of the economic changes that are rippling throughout the world. Added to that—in what we could call a quadruple whammy if this change comes through—is the timing of this bill, which is being brought forward in the middle of this year.

It would be unfortunate if government did not consider giving some relief and showing some grace and good faith to those who have been living off savings and to those who have, after the last six months of significant economic change, already lost a substantial amount of the savings they live off. Since these considerations were made in the budget conditions of last year, the circumstances are widely acknowledged by the Treasurer and the executive to have substantially and fundamentally changed, particularly in the last six months. My request—slightly different from everyone else’s—is for an act of grace and consideration by government with regard to the timing of the implementation of these changes.

If there is no change and we are left with the quadruple whammy of low interest rates, the fall in share market investments, the focus in government stimulus on borrowing strategies rather than saving strategies and then this coming in as well, it will lead to a fifth concern faced by many—that is, it might send to some the message that they are unwanted participants in Australian life. I would hope that is not a message that anyone in this place would want to send to the aged community in Australia, many of whom are living on the North Coast of New South Wales and who all play a valuable role in life today. Many people talk about their valuable contributions in the past but many of them are active, healthy and engaged members of communities right now. Many are suffering a triple whammy—hopefully not a quadruple whammy, and hopefully not a quintuple whammy—delivered by government under the current circumstances.

In the short time that I have to sum up—and I know it is unusual to read out letters in the parliament—I would like to read out a letter I received from Ken Smith from Bonny Hills. It is a short summary but it is an example of the letters received by our office and has been picked out because I think it sums the issue up incredibly well. He says:

I am very disturbed to read about the possible changes to the eligibility for the above card. Nowhere are the changes clearly outlined nor did the Government signal these changes when seeking election in 2007.

My concerns are:

a. these changes, if correct, completely change present legislation i.e. superannuation is now included. Not only is it included but that previous allowances will not be allowed.

b. the upper limit of $80,000 has not been indexed since its introduction.

c. investments made since 2007 to get any benefit of higher interest rates will now hurt any application to retain their card. Especially now that interest rates and dividends are falling, recipients for the Health card will have to wait 12 months to regain and or make application even though fully meeting the criteria for the 2009-10 financial year.

d. the government is not making any allowance for a “grandfather clause” i.e allowing those presently receiving the card to have a period of time to revise their finances.

e. I am in receipt of a NSW State Superannuation pension which is fixed annually subject to indexation every September. Those people on an allocated pension can vary the amount withdrawn to stay within the proposed upper limit. Both people are pensioners but are treated differently under these proposals. Is this fair and equitable?

f. these changes are being made retrospective based on the 2008-09 income tax return, again unfair and unreasonable?

g. pensioners such as us will not receive any funds from the $42 billion stimulus package so this could become a double whammy for me.

I raise that not only as an example of one person expressing their concern but also as an example of the concerns felt by many. Local branches of independent retiree groups in the Manning and the Hastings areas have also expressed similar concerns. I therefore ask the government to reconsider this legislation, particularly in the light of current economic circumstances. I ask that of the minister, the cabinet and the executive. In the light of what we have seen in the previous legislation that just passed through this parliament, in the light of $42 billion of fiscal stimulus packages that we have seen pass through this parliament, in the light of the economic circumstances, if there is no window of opportunity or window of grace for the independent retiree and aged communities to continue to have full access to health benefits through the Commonwealth seniors health card then we are a sadder place because of it.

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

Firstly, I would like to thank all those who contributed to the debate on the Social Security and Veterans’ Entitlements Amendment (Commonwealth Seniors Health Card) Bill 2009, an important piece of legislation. I think it is important to say at the outset that every single member of the House recognises the very significant contribution that all self-funded retirees have made and, in many cases, continue to make by continuing to work and contribute to their communities.

It is the case that the government recognises the pressure that many self-funded retirees are under as a result of the global financial crisis. There have been a number of changes which we have put in place as a result. I asked Centrelink last November to do a re-evaluation of assets ahead of the normal re-evaluation program, to recognise the pressure that many self-funded retirees were under because of the changes in the stock market. There have been a significant number of reductions in the deeming rates to recognise the reductions in interest rates. I remind all members that last year, as part of the economic stimulus package, we extended the payments that were made to pensioners to those who also receive a Commonwealth seniors health card. Those people received $1,400 each if they were single self-funded retirees on a Commonwealth seniors health card, and $2,100 if they were a couple on a Commonwealth seniors health card. A number of measures have been put in place by the government to support self-funded retirees in what we understand is a difficult time, and that will continue to happen.

I will go to what this bill is really about, rather than some of the extreme statements that have been made. The bill implements a budget measure from last year that amends the adjusted taxable income test for the Commonwealth seniors health card—and this is the important thing—to align the treatment of income received by seniors across different income tests. So it really is a matter of trying to be fair to seniors who are receiving income from different sources to make sure we treat them in a similar way. It really is about fairness and equity for seniors and particularly self-funded retirees. It is also about making sure that in these tough times we support those who are in the most need. That, unfortunately, does not seem to be understood by those opposite.

The relevant shadow minister, the member for Warringah, in his second reading debate speech made it clear that he opposed the bill and the modest savings it will generate for the budget. But in the same speech he actually questioned the affordability of a pension rise, so it seems to us that the opposition, on the one hand, is now opposing a possible pension rise—one that the government, of course, has committed itself to—and, on the other hand, is opposing this modest budget saving. As I said, what we are on about here is ensuring that similar forms of income are counted in the same way for the Commonwealth seniors health card. Of course, that is a card available to seniors who do not qualify for the age pension because their income or assets exceed the relevant test limits. Currently the definition of ‘adjustable taxable income’ used to assess a person’s qualification for the Commonwealth seniors health card—and this is the important thing—does not include income from superannuation that is non-assessable and non-exempt under the Income Tax Assessment Act 1997.

This bill amends the test to create a test that is simpler and fairer by treating income from different sources in similar ways. The inclusion of income from a superannuation income stream with a taxed source—that is, gross superannuation—will treat similar income in a similar way. Under the current rules, income from a defined benefit scheme, such as the Commonwealth Superannuation Scheme for public servants and also some state government schemes, is treated as income when determining eligibility for the card. Those were the rules under the previous government. Those superannuation income streams are treated as income when determining eligibility for the card. But income from some private retail or industry super funds and from account based pensions are not counted as income for the purpose of the Commonwealth seniors health card, so I hope people can see that that is the inherent inequity that we are trying to deal with. It has created inequities as people with substantial incomes from superannuation income streams from a taxed source have this income disregarded for the purpose of assessment for the Commonwealth seniors health card. Individuals who have income that is non-assessable and non-exempt under the Income Tax Assessment Act have, of course, already had the advantage of accumulating their superannuation savings in a concessional tax environment and also benefit from the ongoing tax treatment of their superannuation pension payments after the age of 60.

This is all about treating all income received by seniors, whether received from superannuation or another source, such as employment income, in the same way. The proposal will make sure that the income test is applied to all cardholders consistently. That is all that this bill is about, not all of the other things that people have talked about. Nor does the test currently include income that is currently being salary-sacrificed into a superannuation fund or retirement savings account. The definition of ‘income’ for qualification for the age pension actually already includes income sacrificed into superannuation, and accordingly—and this is an other important equity measure—the changes introduced by this bill will line up the salary sacrifice definition of income for the Commonwealth seniors health card with the existing definition for age pensioners. That does seem to me to be a real issue about fairness and equity in determining eligibility for the Commonwealth seniors health card.

I do understand some of the worries that seniors groups have—that these changes will mean that lump sum withdrawals from superannuation will be counted as income and that this could lead to unfair and what are certainly unintended consequences. We do understand that in certain circumstances cardholders may need to make lump sum withdrawals from their superannuation to pay for things like unexpected medical expenses. I say to those of you who are concerned about this that these lump sum withdrawals may increase an individual’s adjustable taxable income for the test year, so to safeguard against people losing eligibility for their card they can request that their qualification for the seniors health card be determined with reference to an estimate of their income for the current financial year. I think that is important for people to be aware of. This may result in the discounting of the lump sum, where it is shown to be a one-off or not ongoing income. These safeguards do exist within current legislation.

The changes in the bill apply to both veterans entitlements and social security based seniors health cards. The changes are being put to the parliament because we want to make sure that people are treated in a fair and equitable way across different income sources, and they are being done with a number of other changes to support self-funded retirees. We do recognise that there are very significant pressures on self-funded retirees. That is why we have made the changes that we have to the revaluation of assets, to the deeming rates and to making sure that the Economic Security Strategy payments of last year were extended to those on the Commonwealth seniors health card. This bill is all about equity in the treatment of income. I commend the bill to the House.

Question put:

That this bill be now read a second time.