Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Jagajaga proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The government hurting middle Australia with its cuts to part pensions.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

Today it is very clear that there is only one party in Australia which cares about pensioners. There is only one party which cares about those Australians who have worked very hard for their whole lives, and saved hard, so that they can feel secure in their retirement. There is only one party which cares about making sure that a fair retirement system exists in this country, and that party is Labor.

Today we have seen a despicable deal done between the Liberal Party, the National party and the Greens party to cut the pension. That is what today's deal is all about—a deal between those three parties to cut the age pension. Of course, it is not the first time that this government has tried to cut the pension. We all remember last year's attempt. Last year's attempt by this Prime Minister and, of course, his Treasurer was to cut the pension for 3½ million Australians; 3½ million Australian pensioners would have seen their pension cut by around $80 a week over the next decade.

This year the government has a new proposal. This year they want to cut the pension by $2.4 billion. And you would not be surprised to know, Madam Speaker, that this Prime Minister and all of those behind him are lying about who is going to be impacted. So today I want to put to bed some of these falsehoods that have been spread by the government again in question time today, and now by their friends in the Greens party.

These deceptions are designed to cover up one key fact, and that is that this is a cut of $2.4 billion to Australian pensioners. The money will come out of the pockets of pensioners. This is what the Prime Minister and his new best friend, the leader of the Greens party, have conspired to do. They have joined forces with the National party and the Liberal Party and, of course, all of them have joined forces to attack pensions and to take $2.4 billion out of the pockets of pensioners.

According to the government this is justified because all of the people who are going to be affected are apparently millionaires. Of course, that is complete and utter rubbish! The government would have us believe that all the pensioners impacted by this cut to pensions are on easy street. Well, we can tell you that that is not the case. We know from the government's own figures that some single pensioners will lose as much as $8,000 a year. These are pensioners with assets of around $500,000 and who have a superannuation income of just $25,000. So people with an income of $25,000 are going to have $8,000 ripped off them by Liberals, the Nationals and the Greens. That is the deal that has been done. That is a quarter of their income; and we know that couples could lose up to $14,000.

This is the important thing that this government has lost sight of—these people are middle-income Australians.

Many of them in fact are very low-income retirees: pensioners who have worked very hard all their lives and saved hard all their lives. They are the people for whom our superannuation system was designed. This is why we designed it the way we did: so that those who were able to save in their working lives could also rely, if they needed to, on a part pension. But this is how hard this government is. The harshest elements will be felt by these very hardworking Australians who have worked and saved so hard for all of their lives. And it is not just people who are already retired; it is people who are planning their retirement, in the 50- to 60-year age group. These are not millionaires who will be affected. None of these people are millionaires. For a couple due to retire in 10 years time the largest impact will be felt below average earnings. That is where the cuts of this change will fall the hardest: on people planning their retirement, in the 50- to 60-year age group, earning below average earnings. This government is taking the knife to their retirement incomes. That is a message that thousands of middle-income Australians will be hearing loud and clear from us over the next weeks and months to make sure they understand that this government is cutting their retirement income.

The detailed modelling that has been done indicates that around 45 per cent of Australians, currently very young Australians, aged between 25 and 29 will not have income sufficient to support a comfortable standard of living because of these cuts. That is the real impact of these changes. Under this proposal, according to the same modelling, eight in 10 single women retiring in 2055 will do so on incomes below that needed for a comfortable standard of living. I want to make it crystal clear. The government's argument is that the only people who will be affected by this cut to the pension are millionaires. That is blatantly wrong. It shows either extraordinary ignorance from the Minister for Social Services, the Prime Minister and the Treasurer about the long-term impacts of this change or—I think more likely—a deliberate fabrication of the impacts. These changes are not just harsh; they are actually also very bad policy.

My colleagues will be very surprised to know that I am going to quote from a previous Liberal Treasurer, Peter Costello. When he changed the taper rate for the age pension in 2007 he said:

The current taper rate of $3.00 means that a retiree loses more age pension than they earn on their additional savings if they do not achieve a return of at least 7.8 per cent a year.

Who is getting 7.8 per cent? This is what he said back in 2007. But of course it was pretty prophetic when you think about the returns that older people can get on their savings today. The Treasurer of the day, Mr Costello, went on to say:

This is currently a large disincentive to save for retirement.

That is what this government is putting in place with these pension changes: not just a cut to the pension but also, to quote former Treasurer Peter Costello, 'a large disincentive to save for retirement'. It is not very often I agree with Peter Costello but on this occasion he is absolutely right. We have already seen pensioners come out publicly and say they know that this will place in front of them a strong incentive to sell off their assets. In fact we heard some extraordinarily dopey remarks from some members opposite yesterday saying to pensioners, 'Just go out and sell down your assets'. Let us see how many of those members write to the pensioners in their electorates and tell them to sell off their assets. Pensioners are already recognising that that is what all of the members opposite want them to do. They are telling them to invest in non-assessable assets like their home or—the worst thing of all—not to save in the first place. These are the consequences of this measure. Pensioners will be forced to sell off their assets—assets that they have worked very hard for and saved for all of their lives. I cannot believe that all of the members opposite do not have pensioners telling them what this will mean for their future.

This measure is not only bad for pensions but also badly designed. Labor will oppose it. The government is not on its own in spreading these falsehoods; the Greens have been at it too. Yesterday we heard the Greens claim that they had agreement to a review of retirement incomes. It did not take long in question time today to hear from the Prime Minister that that was not worth the paper it was written on. There will be no review that is worth anything to the Greens. (Time expired)

Scott Morrison (Cook, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I thank the House for the opportunity to contribute to this debate. Our vision for Australia and Australians is that they will be able to be independent. That is what we would hope for every Australian: that they would be able to be independent financially wherever that is possible. That is what we seek to encourage at every opportunity, whether it is to find themselves in work or whether it is to find themselves saving for their retirement and to be able to draw down on their hard-earned savings to provide for their quality of life in their retirement. That is why they worked so hard for it. That is why governments for a long period of time now have provided support through the tax system to encourage people to do exactly that: to have a superannuation pool that enables them to live well in their retirement. That is the reward of a lifetime of hard work, of diligence and of saving. That is our goal not only for middle-income earners, who the debate today is focused on, but also for all Australians regardless of their level of means or opportunity—whether it is people with disabilities, those who have had very difficult starts to life or whatever it is. Our goal is to make sure that they can realise their potential and that they can become financially independent. This is not a welfare nation; this is a nation of free, independent people who want to have their own choices and be able to guide their own lives and not have their futures dictated to them by the government and the cheques that are sent to them.

We have a very different and, I think, more aspirational view of the Australian population—that they would do everything in their power to ensure that they will not be dependent on financial support from the government wherever possible. There are those in the community who need that—and that is what it is there for. We know that the welfare system is a safety net, and we know that the pension is a welfare payment. The pension is there as a safety net for people who, for whatever reason, over the course of their life have been unable to accumulate the savings they would need to support themselves in their retirement. At this time, with the superannuation system not having come to full maturation, there are still those who are coming through the system who will be more reliant on the pension than others. But it is important to recognise that the pension is a welfare payment. It is not superannuation. It is not savings that people are spending. It is a safety net for those who really need it and those who need it most.

We want to focus on a fairer and more sustainable pension. The pension currently costs around $42 billion and it is increasing. On the projections that are before us, it will continue to increase. We cannot simply stick our heads in the sand and think we can just keep pushing the bill onto the taxpayer without fundamentally thinking about whether the system is fair and sustainable. So we have engaged in a process where we are looking to put a measure in place that will ensure a fairer and more sustainable pension.

Over the next 20 to 30 years, more Australians will come to benefit from the maturation of the superannuation system and the pool of investment that they have been able to accumulate. Do you know why that was done? Do you know why Labor actually did that in the first place? It was so that, in the future, more Australians would not have to rely on welfare payments in the form of the pension. The whole point of superannuation tax incentives was that people would not have to depend on welfare in the future. That is what the pension is for and that is what superannuation is for. Those opposite seem to fundamentally misunderstand the difference between a government welfare payment and someone's own money in the form of superannuation.

With this background, and understanding the fiscal challenges that the country has, we set out to find a way to have a fairer and sustainable pension. It is true that, in the last budget, we had a measure to curtail the growth in the pension based on linking indexation to the CPI only. We have abandoned that position because we listened to the Australian people. We listened to the Australian people, we worked through this issue and we said: 'Fair enough, there's another way to deal with this issue. We aren't going to walk away from the task of having a fairer and more sustainable pension.' We engaged with stakeholders, we engaged with the sector and we engaged with people in this place and the other place to ensure that we could come up with a proposal and a measure that would be able to secure the support of this parliament. We engaged with Senator Xenophon, Senator Leyonhjelm and others in the other place. We engaged with stakeholders such as ACOSS. It was ACOSS—that great bastion of unfairness!—who brought to me a proposal to rebalance the assets test for the pension.

Mal Brough (Fisher, Liberal Party) Share this | Link to this | Hansard source

Who was it again?

Scott Morrison (Cook, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

ACOSS. The Australian Council of Social Service brought to me a proposal to ensure we would have a fair and sustainable pension by rebalancing the assets test for the pension. And do know what they suggested? They suggested that we should bring down the total level of assets that people can have in order to maintain access to a part-pension. They said: 'It is not right to be providing government welfare payments to people on a much higher level of assets; we should be focusing the pension on those with lower levels of assets.' We thought this was a fairly useful contribution to the debate—and there were others at the time who had similar views. Certainly the Council on the Ageing has been a consistent participant in this debate, and National Seniors Australia provided very strong support in the discussions we have had with them.

There will be those who will stay with the policy and there will be those who walk away. But what we will never walk away from is the importance of having a fairer and more sustainable pension. So we put forward a measure which, frankly, was not as harsh as the measure that was put to us by ACOSS; it was a more moderate proposal—which they would acknowledge. The measure was to change the taper rate and the assets threshold, the assets free area, and the maximum level of assets to rebalance the pension in favour of those on lower assets. That reversed the changes to the taper rates on the pension that existed back in 2007. The taper rates that we currently have, at $1.50 rather than $3, have only been there since 2007.

And do you know who voted against the changes back in 2007? It was the Greens. The Greens, back in 2007, did not agree with the changes in those taper rates. The Greens, through their agreement with the government last night, have indicated that they are simply going to remain consistent with the position that they held in 2007. I do not agree with the Greens very often—and there are still many, many, many areas where we are in wild disagreement—but I will say one thing about the Greens that I cannot say about those opposite on any measure, and that is that the Greens are at least consistent. In their appalling views about border protection policy they were at least consistent. The Labor Party flipped and flopped and went all over the place—and they flip and flop to this day. But the Greens were at least consistent—and I consistently disagreed with them. On this measure, the Greens have simply acted in accordance with the convictions that they held back in 2007.

What has changed for the government since 2007 in changing these measures? What has changed is this. When the greatest Treasurer we ever had, Peter Costello—

Opposition members interjecting—

The member for Lilley never troubled his predecessor in terms of a claim to that title! When Peter Costello made these changes, what was different then from now? There was a $20 billion surplus and $40 billion in the bank. Where did that go? We saw six years of the killing season on the budget from those opposite—and that strength in our fiscal position is gone. There are consequences of bad fiscal management, and that means you have to make savings and you have to make decisions about the sustainability of welfare measures, and that is what this does. So we have reversed those measures back from 2007 and we have put in place a more sustainable pension.

But those opposite stand here with their usual playing of politics. They are seeking to play the politics of motions on the pension. But I challenge each one of their speakers: if you are really serious about their strong stand on the pension, come to this dispatch box and say you will reverse this measure if you win the next election. I will tell you what the cost is: it is $2.4 billion. Unless you can say that, it is a simple piece of paper which means absolutely nothing. But we know you cannot trust Bill Shorten, because that is what Mark Arbib told us, and he should know. Those opposite, if they have a serious position on this issue, will come to the dispatch box and say that they are going to reverse this measure if it is passed. They will not say it.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Every time the Liberals and the Greens do a deal, people suffer. They did a deal to block our proposal for asylum seekers to be taken to Malaysia. They did a deal for debt unlimited—remember debt unlimited? They did a deal to block the CPRS. And now they have done a dirty deal to cut pensions. Every time they do a deal, people suffer.

Nine times before the election, this Prime Minister promised no change to pensions. We have seen an attempt to cut the full rate pension that we on this side stopped. We had to stop it in the Senate, but we stopped it. We defended full rate pensioners. Now they have come back for the part rate pensioners. People who have saved and worked hard all their lives and done the right thing—done what every government in Australian history has asked them to do—are now going to cop it in the neck. It will affect 330,000 part pensioners immediately from 2017, but 700,000 people who are still in the workforce will join them in the following few years.

The government are trying to pretend that these people are millionaires. They keep talking about pensions for millionaires. Let's have a look at what you have to have in the bank to have your pension cut. If you are a couple with your own home, you have to have $451,500. If you are a single, you have to have $289,500. That is what you have to have before having your pension cut under this mob. What do you mean when you say 'assets'? Of course it includes your super. A bit of super is great; it is good that they have saved for their super. But it is also the family car. It is also your household effects. It is also a boat or a caravan. I know a lot of people in the minister's electorate, in the Sutherland Shire, might have a boat tied up down at the jetty. It is the surrender value of insurance policies. Your hobby collections are counted, as are your household contents, including your furniture—maybe the furniture you have inherited from your parents. It is your personal effects; that means your mum's engagement ring might be counted in this test. So you are talking about people who have $451,500 if they are a couple, to last them—what? Twenty years? Thirty years?

Government Members:

Government members interjecting—

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Yes, a pensioner couple who own their own home and have more than $451,500 in assets will have their part pension cut. If you do not know that that is the effect of your legislation, you should know.

People who have been told this are deeply offended by the idea that they are millionaires and welfare bludgers. We have the minister up here saying that these people are different from taxpayers and taxpayers should not have to pay them a pension. They are taxpayers. They have been taxpayers all their working lives, and they have planned for their retirement based on the promises that they were made by successive governments that, if they saved hard, they would do all right and—I will tell you what else—based on a promise from this Prime Minister, nine times before the last election: 'We're not going to change the pension.' They are deeply offended by being told that this is welfare, and they are offended by your proposition that they should sell down their assets for their retirement, which should be a contented and happy time for 20, 30 or 40 years after they retire—because we know the Treasurer thinks that they are going to be living till well over the century mark. That is how long their assets have to last them.

We know that within 10 years half of all retirees will be affected. Single pensioners will lose as much as $8,000, and couples will lose as much as $14,000. These people are part pensioners, because they have saved hard, and somehow this makes them evil in the eyes of the government; it means that they should be penalised. But who should not be penalised in the eyes of the government? People with $10 million in their superannuation accounts. We have 475 people who have more than $10 million in super.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

They don't receive a pension, Member for Sydney.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

No, they do not receive a pension; they get a tax concession. So people who are getting $75,000 a year and up—people who are getting $1 million a year tax free—are fine, but those with $25,000 a year are going to see an $8,000 cut.(Time expired)

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

Just for the enlightenment of the member for Sydney, before she leaves the chamber, in her example of a couple who are homeowners, currently their pension starts to reduce when their assets hit $286,500. Under our proposal, their pension will not start to reduce till they reach $375,000 in assets. The other point worth noting for those opposite is: if their assets fall in value, what happens to their pensions? Their pensions actually go up in value as a replacement for the fact that their assets have fallen in value.

This government is focused on providing a sustainable, long-term pension and retirement income system for all Australians that qualify. At the end of the day, these changes will put $30 a fortnight extra in the pockets of some 170,000 Australians who need it most. It is the ones on the bottom rung of the pension ladder who need that increase and that assistance, and they are the people we are focusing on helping.

The age pension is a safety net for older Australians, but it is only part of our retirement income system, and that retirement income system includes superannuation and also voluntary savings. As our population ages, we need to ensure that the pension system is sustainable and fair so we as government can continue to provide those services to Australians who need it most.

We have listened to two contributions from those opposite that just demonstrate how short-sighted and in denial they are about where the budget and our pension costs are going in the longer term. Currently, our age pension is growing at unsustainable levels. We need a sustainable, long-term system.

The opposition talks about the government hurting middle Australia with its cuts to part pensions, yet Labor's approach to the budget deficit is to hurt middle-income families with tax increases. The coalition has passed measures to reduce the tax rate for small business; yet Labor wants to tax business more. Labor wants to punish Australians for making their own super contributions by charging higher taxes on the income they generate. Labor wants Australians, who have already paid for their own retirement, to keep paying the country's welfare bill. How is this helping Australians become self-funded and self-sufficient retirees?

Labor's measures punish our nation's middle-income pensioners for trying to get ahead in retirement savings. Labor wants to pull the rug on these families by abolishing negative gearing tax incentives. When we consider that 1.5 million investors with negatively geared investment properties have taxable incomes of less than $80,000, they are the middle-class Australian families who take the risk in property and investment markets with the hope of funding their future retirement income streams.

As usual, it is poorly-thought out measures from those opposite that hurt the families they purport to support most. A nation that fails to encourage its citizens to provide for themselves will become a nation where welfare becomes more and more common. As we all agree, I am sure in this House, welfare is about genuine need and it should be used as a helping hand to lift those up who have not been able to help themselves. It should not be seen as an incentive.

It is important to reflect that, currently, eight out of 10 taxpayers' tax goes towards paying the current welfare bill of $150 million a year. The coalition's fair and sustainable pension measures will see 90 per cent or 3.7 million pensioners better off or have no change to their pension and pension linked payments under these new proposals. Most importantly, the family home will continue to be excluded from the pension assets test.

Couples who own their own home with additional assets of less than $451,500 will get a higher pension and be better off. Couples who do not own their own home with assets of up to $699,000 will be better off. Singles with their own home and additional assets of less than $289,500 will be better off; and singles who do not own their own home and— (Time expired)

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Pensioners in this country have a right to feel very disgruntled and disappointed with the Prime Minister, because let's have a look at what they are doing: they are taking $2.4 billion out of the pockets of pensioners: 330,000 part pensioners will lose part of their pension and 90,000 pensioners will lose their pension entirely.

They are also doubling the taper rate and that means: if you are a single pensioner and living in, say, Beenleigh, Rockhampton, Maleny, Redcliffe or Caboolture for a start with more than $289,500 in assets, you will have your part pension cut. If you are a pensioner couple with more than $451,500 in assets, you will have your part pension cut.

Not content last year to launch an attack on Australia's pensioners—3.5 million of them—and cut up to $80 a week out of their pension within 10 years and rip away $23 billion from Australia's pensioners, this year they come back with another assault on Australia's pensioners. They come into this place and they quote COTA—Ian Yates does not support this particular measure. They quote Michael O'Neill from National Seniors—they do not support this measure either. Michael O'Neill, president of National Seniors, put it this way:

The public talk was about 'wealthy' retirees. But, in fact, the sums show middle to low income pensioners, with little capacity to adjust, would have been seriously impacted.

That is not supporting the government for what they are doing. This government is about pushing pensioners into poverty. There are 14,250 pensioners in my electorate who will be affected by Tony Abbott's broken promise. There are 5,120 part pensioners in Blair who will be adversely impacted by this $2.43 billion cut.

They can talk all they like over there about the fact that some people do better but the reality is: $2.43 billion is being taken away from pensioners. Some 236,000 part pensioners will have their income reduced by an average of $130 per fortnight—that is a cut of $3,380 per year.

About 91,000 part pensioners will lose their pension entirely, as I said, losing about $190 per fortnight or $4,940 a year. Industry Super Australia has highlighted in their submission to the Senate Community Affairs Committee the progressive impact on new retirees on more modest incomes. Over half of the 700,000 expected to retire in the next decade will have their retirement income reduced. Singles and couples on modest incomes—and it will particularly impact single women on modest incomes.

Those couples who are earning about $62,000 per year will see their retirement income reduced by $4,300 each annually—that is around $112,000 over their retirement period. But for couples further from retirement the government is cutting their part pension and hurting those on low incomes the most. Couples 20 years from retirement, earning as little as $45,000 a year, will lose about $1,500 annually. Just think about that: that is the difference between perhaps going for a holiday, replacing the TV, fixing up the car, thinking about providing food and clothing or giving a bit of assistance in terms of birthday presents or Christmas presents to your grandkids. This is what this government is doing: $1,500 annually. They are voting for it.

There are people all through their constituencies—and, I might add, in the Liberal Party branches—who do not know what is about to hit them. It is going to hit them hard, and if they think they are going to campaign, then I look forward to them handing out brochures in their electorates, in their marginal seats, saying, 'This is what we're going to do for you.' I look forward to those leaflets, the DLs. It is going to be great to see them. Those pensioners and part pensioners know very well what is coming for them. There is a shortfall, and the impact on the aged care sector will be massive. Aged Care Services Australia says the modelling indicates that those people going into aged care will be more severely impacted than other pensioners. So, the government should rethink this disgraceful attack on middle Australia and low-income earners.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

My electorate of Murray is one of the lowest-income electorates in Australia. Over 60 per cent of the constituents are on some form of welfare support, a safety net that is, very rightly, in place. I have a big aged population. My electorate is low-income because the people are farmers and food factory workers. They are people who have worked hard all their life, but often as they enter retirement they just cannot make it with sufficient retirement income to carry them through. So, we have a safety net in Australia.

You would think, hearing now from the opposition, that my office would be under siege from my constituents, complaining about these new measures we are introducing with the support of the Greens. You would think, given that my constituents are very much more likely to be on some sort of welfare support, particularly aged care benefits, than people in most other electorates that I would be under siege. But, do you know what? I have not had a single complaint about this measure. And do you know why? It is because my electorate understands that this has to be a targeted measure in that for people who have over $1.15 million in assets plus a family home we just cannot continue to support that couple with a part pension.

We know that. They know that. And they know that Labor left us with a massive debt. They know they left us with the need to borrow about $100 million a day to pay down their debt. They know that we had $1 billion a month in Labor's interest to pay. It is a legacy of their profligate spending; their untargeted measures; their shocking pink batts project that killed people; their Grocery Watch, which had to be pulled after 10 minutes because it was useless; and the Gillard school halls. I had a school in Nathalia begging for a new toilet block. But no: the Gillard school hall scheme would not give them a toilet block; they had to have a new classroom, and it ended up being built over their small school oval. They were not allowed to have any flexibility in terms of what they actually needed to have that money spent on. That is the Gillard-Rudd legacy: debt and despair.

My constituents know that it is not sustainable to pay aged pensions to people who do not need them. I am very concerned about women in our workforce now who have broken work histories because of child rearing or looking carers for disabled people in their household. When they head into their retirement they are going to need a pension or a part pension to carry them through to their last days. Therefore our government and successive governments need to have the capacity to pay the $150 billion welfare bill annually. About $40 billion of that is for the age pension. They understand that.

When Labor offered $900 cash in hand when they were in government as a sweetener, as a 'please vote for us' measure, a number of the people who received that $900 were either deceased or back living in New Zealand. It was an untargeted measure. Part of the problem of the Labor government was that when it got into government—and, as you know, we left them a surplus of some $20 billion—they saw that as just a beautiful big birthday present to spend as they wished. Australia's surplus is now depleted, after being built up by the coalition's careful budget management.

The people of today know we have to have a sustainable economy and one that can afford welfare measures targeted at those in need, not those who think that this is a good deal and that what they can get away with will do. I am afraid that if you have $1.15 million in assets plus a family home, as a couple, then you actually do not need a part pension; you can do very nicely. But if it turns out that some disaster happens in your household, some extraordinary expense, and you lose that $1.15 million worth of assets, then of course you can turn around and apply for a pension. You are not excluded from that scenario, like the member for Sydney seemed to think.

I also need to add that this measure continues to provide access to the Commonwealth Seniors Health Card or the Health Care Card for those who will no longer be eligible for the pension or part pension under the new rules. I think that is a measure that is most generous of our government, on behalf of taxpayers, but it is also what matters most to a lot of those part pensioners. They say to me, 'If only we could keep the Health Care Card.' Well, they will, with this measure. Of course it has to be affordable. My electorate is not complaining. They are a low-income electorate, and they understand the realities of inheriting Labor's debt and what we had to do about it.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

This government is just great at using the word 'sustainable'. They are saying that this measure is because they need to have a sustainable budget; they need to cut $2.4 billion out of the pockets of our pensioners because it is about budget sustainability. Yet in the same budget this government is handing out subsidies for nannies. So, let's just be clear about it when they talk about saving the budget money. It is about priorities. This bill is not about saving the budget money; this bill is all about the unfairness in the priorities of this government.

So, let's just be clear about who they are actually attacking when it comes to these changes to pensions. For the members opposite, the people who it will target are pensioners—people who have retired now and who are on modest incomes and super incomes. It will also target people who are currently working, and for those who may not know a worker in their electorate, let us just talk about who they are for a moment. We are talking about people who are 45 and 50 today and who plan to retire in 20 years time. They are earning as little as $45,000 a year. We are talking about the people who work at SPC in the member for Murray's electorate, people who are earning right now less than $45,000 a year in their jobs. These are the people who this government is going to attack when it comes to these changes in super. They will lose about $1,500 a year in their part pensions because of these reforms.

I agree with the member for Murray. People in her electorate, like people in my electorate, have worked hard in low-paying jobs and they deserve the support of the government when they retire. Yet what we have seen from this government is lots of spin and lots of trickiness and their not telling the truth about who these pension changes are really going to hit. They are going to hit people who are on modest and low superannuation incomes. Workers who are earning as little as $45,000 a year who are thinking about their retirement are going to be hit by these changes. I do not think the government backbenchers have worked out yet how many working people in their electorates will be hit really hard as a result of these changes.

In total, one million retirees will have their pensions cut, including around 700,000 people in their 50s and 60s who are looking to retire. How will they be hit? Any pensioner couple with more than $450,000 or thereabouts in assets will have part of their pension cut. Any single pensioner with more than $290,000 in assets will have part of their pension cut. These are not millionaires, as the government is trying to convince us. These are people on modest incomes. These are people who, through their enterprise bargaining and through their workplace, have been able to secure some superannuation. But it is not the millions that the government and the Greens would like to pretend to you. These are people in your electorates and in our electorates working in manufacturing, working as teachers and working as nurses who will be hit because of these changes.

A couple of the pensioners have contacted me in the last 24 hours since learning about the deal that has been done by the Greens and the government. This is what they have said to me. One of the pensioners who will be affected is a 73-year-old widow from Woodend who owns her small home. She was a teacher and a social worker. She currently has $350,000 in super and currently gets the part pension of $330. She has been told by her financial planner that the money that she has might last the next 20 years. But what she has just been given by this government is a massive cut to her retirement income, forcing this particular woman into poverty.

It seems to be the wish of this government to go after those in the middle and force them into poverty. These people, who are in their 50s, 60s and 70s, have no ability to earn extra super to put themselves into the realm of the high superannuants that this government seems to support most. They are people stuck in the middle. This superannuation and retirement income was always about a generational change. Compulsory super did not come in until 1992, which means governments must support our part pensioners so that they have a decent retirement income. But this government and the people that are in government do not understand that these changes will affect good, honest working people.

John Cobb (Calare, National Party) Share this | Link to this | Hansard source

I never thought I would rise in this place to say that we are here today talking about the fact that the Greens have shown a maturity and responsibility that you normally only see in a mainstream party. But obviously that has all changed, and I am still stunned that I am standing here saying the Greens are showing more responsibility to our country than an old institution like the Labor Party, which has always claimed to stand for the underdog. They are not standing very straight for it and their bark is very quiet. In fact, I would say the Leader of the Opposition has caught himself out somewhere, thinking this could not happen. Well, it has. Not only do we have a divorce between Labor and the Greens, but that formal coalition that existed in the last parliament would seem to be gone, and we now have Labor showing a lack of respect for people who need it.

We need to talk for a while about the facts. There are 170,000 pensioners at the bottom end of the scale who will see their pensions increase substantially. It will also mean that 50,000 more who are part pensioners will qualify for a full pension. Ninety one thousand current part pensioners will no longer qualify for the pension, and a further 235,000 will have their part pension reduced. I do not want to have a go at anyone, but this is to make it sustainable through into the future, taking into account those whom those on the other side said will be coming onto it. The Deputy Leader of the Opposition spoke of 700,000 people in the next few years coming online. We need to make sure that they too can be part of a sustainable pension plan.

Jenny Macklin, the member for Jagajaga, says we are hurting middle Australia with these cuts to part pensions. She does not say that we are helping those Australians less well off who surely do need that assistance. She does not say that her government made it much harder to spread largesse around to those in Middle Australia. Why does she not say that? Perhaps buried somewhere there is a note of conscience that they have—if I may put it this way—stuffed up the Australian economy pretty well. How could you say it is bad when we are lifting the asset-free test area by $50,000 for single homeowners, by $100,000 for single non-homeowners, by $90,000 for couple homeowners and by $140,000 for a couple who are non-homeowners?

As our Prime Minister alluded during question time, the Leader of the Opposition has surely caught himself out. I guess we can only call him, as we have seen in recent times, the Rasputin of Australian politics, a master of regicide. In fact, if you want to talk about the Leader of the Labor Party rather than the Prime Minister, he is certainly the Macbeth of politics, because he not only gets rid of the kings; he takes their place. The true regicide here is the fact that our Prime Minister got rid of two leaders of Australia who brought us to the position we are in, where we cannot afford to run as generous a system as we have in the past. It is the opposition's fault from when they were in government and it is the fault of the Leader of the Opposition—as I said, the master of regicide, the Macbeth of Australian politics. He has brought it upon himself and he has caught himself and his party out. When the Greens are more responsible than Labor, they are in trouble.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Given some of the contributions that have been made in this debate today, it must be really lovely to be a Liberal and to live in that beautiful parallel universe that members of the Liberal Party and the National Party seem to inhabit—a universe in which there was apparently no global financial crisis; a happy place. The fact that the global financial crisis happened in our reality seems to have completely passed them by. If you listen to the justifications for the newest, fresh attack on pensioners, you will hear everyone on that side of the House pointing their fingers over here and saying, 'It's all Labor's fault that we have to attack pensioners. It's all Labor's fault that we have to do this sneaky, dodgy deal with the Greens, where we pull the wool over poor old Richard Di Natale's eyes to convince him that he's got a deal that he doesn't really have,' to get them to back him on this deal that is going to hit pensioners' incomes. It is going to affect pensioners significantly and adversely. Why? Apparently, their excuse for wanting to attack pensioners this time around is Labor.

There is all this carry-on about Labor. During the global financial crisis, thank God the Labor Party was in power in this country. I am pleased that the Liberal Party saw fit to at least support some of the stimulus at the very beginning, but, if not for Labor being in power, would we have saved the hundreds of thousands of jobs that were saved through the stimulus that Labor introduced? Would we have come out of the global financial crisis with a AAA credit rating? No, we would not. Would we have come out of the global financial crisis as the 12th largest economy in the world? No, we would not, Mr Deputy Speaker Vasta, because your mob would be doing what they are doing right now: trying to find austerity excuses and attacking pensioners.

We certainly came out of the global financial crisis in much better shape under Labor than we would have had the coalition been in power. If you want an example of that, just look at unemployment. What has happened to unemployment is an absolute disgrace in this country since you people came into government.

Honourable Member:

An honourable member interjecting—

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Interesting. Unemployment got up to 6.7 per cent in my state of Queensland under coalition federal and state governments. We might also say that unemployment has reached its highest peak since the current Prime Minister was the employment minister in the early 2000s. What a shock! You would think that they would learn and you would think that they would understand, but what do they do? They come in and they say, 'You know what we should do? We should attack low-income earners and middle-income earners. That's what we should do. We should try to find some sort of basis for austerity and cuts.' What did we see happen to pensions last year? 'I know! Here's a great idea. I'm a coalition MP. What I really want to do is slash pensions by $80'—an indexation change to take away the pensioner and beneficiary living cost index as a basis for indexing the pension, to take away average weekly earnings as a basis for benchmarking the pension and only keeping CPI at a cost to pensioners, relying on excuses.

Of course, we fought that every day since that budget was announced last year and we won that battle. Together with all of the pensioners and all of the people who speak out for pensioners across this country, Labor worked hard every day to defeat that indexation. But we know, Deputy Speaker Vasta, how addicted your side of the House is to seeking to attack the living incomes of pensioners. What have we seen in this year's budget? You finally realised that you were not going to get your indexation changes through—belated, but well done; congratulations. Instead, what have we seen? Somehow you managed to hoodwink the Greens into the idea that they are going to deal with superannuation tax concessions by dealing with you to slash the pensions of middle- and low-income pensioners—a new round of pension cuts that will hurt almost 330,000 existing low-income pensioners in this country, with independent analysis saying that, over the next 10 years, around half of the pensioners will be affected by these cuts.

In total, a million retirees will have their pension cut, including around 700,000 people who are about to retire and are aged 50 to 65 today, including more than 90,000 part-pensioners, who will be thrown off the pension immediately and entirely. Any pensioner couple with more than $451,500 in assets will have their part-pension cut. Any single pensioner with more than $289,500 in assets will have their part pension cut. We are not talking about millionaires, notwithstanding what the coalition government might like to have you believe. We are talking about low- and middle-income earners. There is a price to these cuts. The Greens have sold their soul. What have they sold their soul for? A pig in a poke. We know the government are not going to change their position on superannuation concessions.

Mal Brough (Fisher, Liberal Party) Share this | Link to this | Hansard source

In the truncated period that I have in this debate, could I just turn it on its head for a moment? Please do not take offence at that. Can you imagine for a moment, the hypocrite sitting opposite, if the coalition were standing here today saying, 'This is what we would like to propose to the parliament. We would like to increase the assets test from $823,000 to $1.15 million for home-owning couples'? They would be screaming at us that we are Liberals looking after our blueblood millionaire mates. That is what they would be doing.

You see, hypocrisy knows no name like the Labor Party. Let me make a warning to everybody in this place and in the gallery. I was here in 1996 when the member for Jagajaga stood in this place and ripped apart a coalition policy to put a bond on aged care. She said it was the most disastrous, despicable, nasty, evil—the same word that was used by the member for Sydney today—policy. Guess what? When I came back into this place in 2013, surprise surprise, the Labor Party, led by the member for Jagajaga, had put a bond on aged care facilities. In other words, when it suits their political purposes, they know nothing but political opportunism. So if we were to stand here today increasing those assets tests at the upper echelon, the same people—the member for Griffith, the member for Sydney, the member for Jagajaga—would be screaming blue murder at us for helping our millionaire mates. But there is no recognition whatsoever that the person who is on $202,000 today will have $250,000 before their pension is impacted at all, and that is for a single homeowner.

It is not as though these people who are having some money removed do not have other assets with which to replace that income. Those opposite use the example of a hardworking family having $1,000 taken off them. Well, if you have $700,000 assessable assets as a non-homeowner, you will need to access 0.01 per cent of your assets to replace the income you have lost. You are not about to run out of money any time soon, are you? Even the Labor Party can work that out. Even the member for Lilley could work that one out.

Government members: No, they cannot.

Well, maybe they cannot. My learned colleagues behind me remind me that they cannot.

I was the minister when we changed the taper rate from $1.50 to $3 because we could afford to, because we had taken the hard yards in government and because we had put our finances in this country onto a solid footing. Because of the waste, because of the mismanagement, because of the myriad mistakes made by the Labor Party that have been articulated by my colleagues, that is not possible. So when the member for Sydney talks about this policy's architecture, that is wrong. We are reverting to what this policy was. It was a $1.50 taper rate. It was increased to $3 under the Howard government because under good economic management we could afford it. What we have done here is look after those least able by increasing their assets test, we have removed it from the higher echelons, we have given people a sustainable system, we have put fairness into the system and that is what you can expect from an economically sound Liberal government.

I would say to the shadow Assistant Treasurer, the economic rationalist over there, I am not surprised you were not part of the debate today because you would have joined us in saying this is good politics. Unfortunately your colleagues are bereft of ideas, bereft of honesty and you have let Australians down again.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The time for this debate has expired.