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

by leave—Since the federation of our nation, Labor has believed in the need for a strong age pension for our country. Labor drove the introduction of the age pension during our nation's first decade, driven by our core Labor belief in a fair society that rewards a lifetime of work and driven by our sense of responsibility to ensure that no Australian is left behind. These Labor values endure, as the age pension in Australia has endured. A century on, more than two-thirds of older Australians receive the age pension. It remains a critical link in Australia's social fabric, ensuring that after a lifetime of work, Australians are supported in their retirement. A century on, Labor continues to deliver for older Australians.

Support and security for pensioners

Two years ago, it was this Labor government that delivered historic increases to the pension and an improved indexation system, to make sure that the pension kept pace with the cost of living. We protected the pension—and provided support and security for Australia's pensioners: support through a significant increase to the pension; security that the pension would keep pace with the cost of living through improved indexation and an increase to the wages benchmark. Australia's age, carer, and disability pensioners, our war widows and widowers, and service income support recipients have received the support of a long overdue and much needed increase to the pension. In September 2009, as a result of our reforms, single pensioners initially received a fortnightly pension rise of $70.83 and pensioner couples combined received a rise of $29.93.

And just as important, Australian pensioners have the security of knowing that they will not be left behind. The age pension will better keep pace with the cost of living through improved indexation arrangements that make pension rates more responsive to the price changes experienced by pensioners. The new pensioner and beneficiary living cost index considers a 'basket of goods and services' that better reflects pensioner consumption patterns than the overall consumer price index. We have also linked the rate of the age pension to a higher wages benchmark. The wages benchmark rate has increased for singles from 25 per cent to around 27.7 per cent of male total average weekly earnings, an increase of more than 10 per cent. This new benchmark is now enshrined in legislation.

Both the pensioner living cost index and the higher wage benchmark are proving their worth in providing greater security for pensioners when prices increase. The fourth regular increase since the historic pension reforms starts today. From today, single pensioners will receive an extra $19.50 a fortnight and pensioner couples combined on the maximum rate will receive an extra $29.60 a fortnight. Over the last two years, as a direct result of pension reform, maximum rate pensioners have received an increase of around $148 a fortnight for single pensioners and around $146 a fortnight for pensioner couples combined.

These historic reforms built on the benefits delivered to Australia's pensioners by this Labor government in 2008. Just months after coming to government, we more than tripled the utilities allowance—from $107.20 a year under the previous government to $500 a year. We also increased the telephone allowance—from $88 to $132 a year. And we helped pensioners during the global financial crisis by making economic security strategy payments to pensioners at the end of 2008.

These increases—like our pension reforms—responded to the real pressures that pensioners face. The government does understand that pensioners need some flexibility in how they pay their bills. We simplified payments to pensioners, combining four allowances into a single, simple pension supplement that is now paid fortnightly. But to increase flexibility for pensioners in balancing their household budgets, pensioners can choose to have some of their pension supplement paid quarterly instead of fortnightly—whatever suits them. To further increase flexibility for pensioners—and to help them meet unexpected costs, like circumstances where their car might break down—we have introduced new arrangements to give pensioners easier access to advance payments, and in the last financial year, around 143,400 age pensioners took advantage of the new advance payment rules.

The challenges of a fixed income, of course, are also faced by self-funded retirees and many carers. Through the pension reforms, the government introduced a seniors supplement paid quarterly to around 280,000 Commonwealth seniors health card holders. We also introduced a carer supplement, paid annually in July, to eligible carers, and now around 530,000 Australian carers are $600 a year better off.

Protecting the pension into the future

This Labor government has delivered these many improvements for pensioners, driven by our belief that a fair society does reward people for their lifetime of work. A lifetime of work is, of course, an enormous contribution. But we know that for many older Australians that contribution does not stop when their last shift ends. Many older Australians do want to continue some part-time work—to pass on some of their knowledge and some of their experience, to make some extra money or to stay involved—and all of these people should be supported.

That is why this Labor government has delivered on its election commitment to older Australians, improving the new seniors' work bonus which allows pensioners who work to keep more of their pay packets before it affects their pension. Eligible age pensioners can now earn an extra $250 a fortnight from paid employment without it being assessed as income under the pension income test. This is on top of the income-free area. Pensioners can now 'bank' any unused amount of the fortnightly $250 work bonus, up to $6,500, which they can then use to offset future employment income. Couples, where both people work, each have $6,500, or a total of $13,000. We have 78,000 age pensioners with employment income who stand to benefit from the work bonus. They get, of course, the benefit of work, and the security of the pension. Labor has been protecting the pension for more than 100 years. We have delivered for older Australians—meeting our responsibility to ensure that no Australian is left behind. We are supporting pensioners today and providing security for tomorrow. Through our pension reforms, this government has built a sustainable pension system. We will continue to deliver pension increases and improvements in a long-term, sustainable way by gradually increasing the age pension age from 2017, rising to 67 by 2023. People will have time to plan and prepare for this change. We will also continue to protect the rate of the pension into the future, by keeping Australian pensioners front and centre of reforms as we look forward to further improvements to the pension.

Pensioners will be supported in this government's plan to put a price on pollution. Under our plan, it is the big polluters who will pay for their pollution—and not pensioners. Under our plan, pensioners will receive household assistance that is more than the expected average price increase from putting a price on pollution. This will be a real and permanent increase to the pension. Pensioners will receive around $338 for singles, and $255 for each member of a couple per year.

Conclusion

This government, like Labor governments before us, is driven by a belief in a fair society that rewards a lifetime of work. We are driven by our sense of responsibility to ensure that no Australian is left behind. These Labor values endure, as the age pension in Australia has endured. A century on, Labor continues to deliver for Australian pensioners. We are providing support and security for pensioners and we are protecting the pension, now and into the future.

I ask leave of the House to move a motion to enable the member for Menzies to speak for 10 minutes.

Leave granted.

I move:

That so much of the standing and sessional orders be suspended as would prevent the member for Menzies speaking in reply to the ministerial statement for a period not exceeding 10 minutes.

Question agreed to.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

Can I say at the outset that the coalition welcomes support for Australian pensioners. They are important contributors and members of Australian society. They are people who obviously deserve the support which this country can provide for them. In fact, the coalition has a proven track record over many years, indeed many decades, of supporting Australian pensioners.

The real income of pensioners increased by 20 per cent under the Howard government—that is, by more than two per cent a year. There were also one-off bonuses paid to most pensioner categories, as well as a utilities allowance which was paid to pensioners for the first time under the previous government. Furthermore, in September 1997, the Howard government legislated to index pensions using the male total average weekly earnings if that index was higher than the consumer price index. This enabled pensioners to keep ahead of cost-of-living increases and to share directly in the wage increases flowing from the strong economic performance of the Howard government of more than a decade.

The Howard government also eased the taper rates, which enabled 300,000 older Australians to receive the pension for the first time or to get an increase in their pension rate. But in September 2009 the Labor government raised the income test taper rate for the age pension from 40c to 50c, reducing the age pension payment by 50c for every dollar above the income threshold that delivers the full age pension income. In September 2008, almost three years ago to the day, the coalition in opposition moved a private member's bill to increase the pension by $30 per week, at a time when figures showed that more than half of elderly Australians were then living below the poverty line. But, rather than support a fair go for pensioners, this Labor government arrogantly labelled the call for a pension increase a 'stunt' and opposed the motion in this place, using its numbers in parliament to defeat it. In fact it was the current Prime Minister who later boasted that she was the one in cabinet who held this up to the light and led the opposition to an increase in pension payment which the coalition had proposed at that time.

I think these things should be kept in context, when we hear the government crowing, as they do today, about how much they have done for pensioners. However, the coalition's pressure at the time eventually did force Labor to finally address the issue in the 2009 budget, but they had to be dragged kicking and screaming to that position. They crow now about the increase in the pension, but the reality was that at the time they were very reluctant to actually provide that.

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

You didn't do it. You had 11 years and you did not do it.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

At the time they were in government, when a motion was before this parliament to increase the pension, who voted for it and who voted against it? This side of the parliament voted for it; that side of the parliament to their shame voted against it. So I can say accurately as an observation of what occurred at the time that they had to be shamed into it and were dragged kicking and screaming to make that increase.

The minister has implied that this increase which occurred for pensioners today was more than would have been expected. But the minister had to concede this point this morning on radio station 5AA in Adelaide when Leon Byner said to the minister: 'The increase that people are going to get as of today is an increase that we would normally get anyway—correct?' The minister replied, 'Yes.'

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

Read the rest of what I said.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

The minister then went on to say, 'But we have put a new indexation system in place so there is a little more than they would have otherwise got.' But the implication that this minister is seeking to make all the time is that the whole of $19.50 increase was something additionally given today. The reality is, yes, there has been a minor increase, but not this huge increase that she would like all of us to believe and all the pensioners to believe. It is typical of this government, who use overblown rhetoric and overclaim for things all the time, whether it is about this pension increase or many other matters. Unfortunately, the poor economic management of this Labor government will make it more difficult in future years for pensioners to get an increase in their pensions and live better than they might do at the present time. Let us take some examples. The Labor government introduced a solar panel rebate scheme which saw pensioners try to do their bit by installing solar. But, when excess power from the panels was returned to the power grid, pensioners received a nasty surprise: the Labor government had decided that the rebate or cash discount they were receiving on their next bill was income and therefore would be treated as such for the purposes of calculating pension eligibility. This decision was pursued by the coalition at a Senate estimates hearing and ultimately, after continuous pressure from the coalition, the government backed down and reversed their decision. Here once again was a case of this government robbing Peter to pay Paul.

Pensioners are among the people worst affected by the increases in the cost of living that we have seen in recent years. Under this government, between December 2007 and December 2010, electricity prices across Australia increased by an average of 43.5 per cent. Pensioners are the very people who do not have much flexibility in the use of electricity. If they want to cook something, they have to use electricity—if that is the form of power they use. If they want to keep warm on a cold night here in Canberra or somewhere else in the country, unlike people who are on much higher incomes, they have to pay a disproportionately large amount of their income in order to do so. What other choice do they have? So a 43.5 per cent increase in power bills hits the pensioners of Australia particularly hard. What if they do not use electricity and instead use gas? We have seen gas prices go up over the period from December 2007 to December 2010 by 28 per cent. So there has been a 43 per cent in electricity prices and a 28 per cent increase in gas prices.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

They want you to have half a shower.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

'They have half a shower' is what the honourable member says. I suppose that, if we take that logic to its ultimate conclusion, it means that pensioners might only be able to half cook their food and so on. On top of all that, water and sewerage prices have increased by an average of 45.6 per cent. Again, who are the hardest hit? Those people who are on limited, fixed incomes—the pensioners of Australia. Health costs, including hospital, optical, dental and pharmaceuticals, have increased by an average of 15.3 per cent across Australia. The price of bread—one of the staples of people's diet—has gone up by 11.6 per cent across Australia, and overall the cost of food has increased by 10.3 per cent across Australia.

With these increases in the cost of living—43 per cent for electricity, 28 per cent for gas, 45 per cent for water and sewerage, 15 per cent for pharmaceuticals and healthcare, 11 per cent for bread alone and 10 per cent for food overall—Australian pensioners are among the people hardest hit, and, of course, the situation will only worsen under the government's carbon tax. This government's carbon tax will only increase the cost of living further for all Australians; but those on fixed incomes, such as pensioners, will be the hardest hit. This unnecessary carbon tax will hurt them, with higher electricity costs, higher grocery prices as well as higher petrol costs, which will mean that the cost of anything that has to do with the production of energy and anything that has been transported at any stage of its production in Australia will go up.

Of course there is a deception in what the government is trying to project on this. We are told day after day, week after week for month after month that only the 500 biggest polluters in the country will pay. The implication is that this is going to be confined to 500 companies. Of course, the government cannot name the 500 companies— repeated questioning aimed at identifying the 500 companies goes unanswered. However, leaving that aside, the implication is that only those 500 companies will pay. If that were right, why would we need this compensation package? If it were true that only those companies were going to pay, that the costs were never going to be passed on to anyone else in Australia and that the poor old pensioners were not going to cop some of the costs, why would we need a compensation package? These questions expose the essential deception of what the government is trying to project to the Australian people.

The reality is that not only are the 500 biggest companies going to pay; they are, of course, going to pass on their costs to everybody in this chamber and everybody in Australia. Most of all, they are going to pass it on to all the pensioners in Australia. The reality is that the best word to describe this government is 'mismanagement'. There has been mismanagement and incompetency all along the line. They were shamed into increasing the pension, and they do not have much to crow about today.