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

I ask leave of the House that that motion be withdrawn.

Leave granted.

I ask leave of the House to move government amendments (1) to (6) as circulated together.

Leave granted.

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

Today, members opposite—all of them, Liberal members, National Party members—are once again going to vote for a cut to the pension. They have already done it once. Everybody around Australia remembers the first time when members of the Liberal and National parties voted to cut the indexation of the pension, and today they are going to do it again.

Three hundred thousand pensioners around Australia are about to have their pension cut because of this Liberal and National Party government—300,000 pensioners who were told before the last election by Mr Abbott that there would be no changes to pensions. How many times did he say it? Over and over again, Mr Abbott told pensioners that there would be no changes. He lied to them once in last year's budget and then tried, day after day after day over the last year, to defend this cut to indexation. Now, in this year's budget, he is lying to them again—

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

by introducing another cut to the pension, this time by changing the way the assets test works.

Each and every pensioner in Australia—and there are 3½ million pensioners—is going to remember, particularly as they go to the election, that this Prime Minister did not tell the truth. They will never forget it, and I can assure and each and every member opposite that we will make sure of it. What pensioners will be saying to themselves and to their neighbours is: 'What will they do to us next? What will these Liberal and National Party members do to us next?' How could they possibly trust a Prime Minister who told them before the last election that there would be no changes to the pension—and yet here we are debating yet another change to the pension?

We know that the Prime Minister would really like to cut pension indexation, a cut that would have seen 3½ million pensioners lose $80 a week within a decade. That is really what the Prime Minister wanted to do. We know that, because he stood here at the dispatch box day after day after day defending it, trying to tell pensioners that it was fair to cut the pension by $80 a week. There is no doubt whatsoever that that is what this Prime Minister wants to do.

We also have no doubt that he clearly wants to try another approach now. This legislation, which all these Liberal and National Party members are going to vote for, will see 300,000 pensioners face a cut. Of course, it is not going to stop there. It is not only these 300,000 pensioners, who are currently retired. We also need to think about what the impact of this change will be on those planning their retirement. People in the age range of 50 to 65 right now, of course, understand that this change that this Liberal-National Party government is pushing through this parliament today will mean that around half of all new retirees will be affected. Half of them will have a lower pension then they would have otherwise anticipated. These are people who are currently on below-average incomes. All these people in the 50-to-60 age range who are currently on below-average incomes now know that, because of this change that this government is pushing through the parliament, they will have a more difficult retirement because of this government.

Also, we should not ever forget the grubby deal that the Greens did, and we will not be letting them forget it either. The Greens too are lining up with the Liberal and National parties.

What I want to say to pensioners today is that the Labor Party will stand with you. We will make sure that your retirement incomes are protected. We do not think that it is right for a government to say one thing to pensioners before an election and then do the exact opposite. This government has moved to cut the incomes of 3½ million pensioners. It thinks it is going to get off scot free. Well, it will not. The Labor Party will do everything to defend the pension.

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

Before I move these amendments, I simply give an explanation for the amendments that are before the House. They take account of a number of matters that occurred in the other place earlier today. The abolition of the seniors supplement and the retention of the energy supplement for those on the Commonwealth seniors health card has passed the Senate, which will deliver further savings to the budget of over a billion dollars. As has been reported, as a result of the arrangement that is agreed between the Australian Greens and the government, which I table for the benefit of the House, matters regarding the assets test rebalancing, which is part of this bill, will be supported by the Australian Greens in the Senate.

As a result, we are moving that schedules 1, 2, 4, 5 and 6 be removed from this bill. Those schedules, which have not yet been considered—and, as a result of these amendments, will not be considered—by the Senate, will be reintroduced as other bills before the House; in particular, the defined benefits income streams, which the opposition have indicated they will be supporting as well. That will provide further opportunity for some $450 million in savings to be put forward and to be able to assist with the budget task, which is considerable.

I also note that the amended bill that will go forward from this place with the support of the House puts forward an increase of $30 a fortnight for pensioners on the lowest level of assets. Those opposite are going to vote against a pension increase of $30 a fortnight for those on the lowest and most modest level of assets. That is what those opposite are doing. Over 170,000 pensioners will get a pension increase as a result of this bill. That is why these measures have been supported by ACOSS, UnitingCare and the Council of the Ageing in particular—and also the Australian Greens, I note. It is because it is good policy. Those opposite have left a vacuum in terms of their position when it comes to good policy, and it says something when the Australian Greens occupy the vacuum left by the Labor Party on policy. That says a lot about what is happening on that side of politics. It is all about politics; it is not about policy.

The government listened carefully to the response to the measures that were introduced in the 2014-15 budget, and we have reframed a new measure in consultation with stakeholders and in consultation with other members of parliament, in this place and the other place, to come up with this very sensible measure. It is a sensible measure which delivers savings to the budget but also delivers a fairer and more sustainable pension for those who most need it.

It is quite interesting that those opposite will a vote against a pension increase for a couple with assets of up to around $451,000—a pension increase. If you have assets of up to $451,000 or thereabouts and your own family home, you would be getting an increase in the pension. Secondly, if you are a single homeowner with assets of up to about $289,000, you would get an increase because of the expansion of the assets free area. More than 90 per cent of pensioners either are not affected by this change or get an increase in their pension.

But if those opposite are really serious about the hyperventilation we see them carrying on with in this place and that we saw last week, if they are really serious that they believe that this is such an unfair change, then what they should do in this debate, in this place or at another opportunity on this day, is say that they will reverse these changes at the next election, because these measures do not take effect until January 2017. If they really believe it, then they should commit to reversing the measures. If they do not, what we know is this is just another hollow commitment from a very hollow opposition leader who is hollowing out the Labor Party, day by day by day.

We have seen the division among those opposite on this measure. They are torn asunder as the Leader of the Opposition falls further and further to the left and further and further to the politics rather than the policy. He is a man who is pulling himself down, because he has opted for politics over policy. He has opted for the politics of division on his own side of the House rather than recognising good policy when he sees it. It is up to the opposition to show how genuine they are as they come to the dispatch box and deplore these measures. If they are serious about it, they will reverse it. The cost is over $4 billion.

I move:

(1) Clause 2, page 2 (table items 2, 3, 7 and 8), omit the table items.

(2) Schedule 1, page 3 (line 1) to page 5 (line 19), omit the Schedule.

(3) Schedule 2, page 6 (lines 1 to 16), omit the Schedule.

(4) Schedule 4, page 24 (line 1) to page 35 (line 7), omit the Schedule.

(5) Schedule 5, page 36 (line 1) to page 42 (line 22), omit the Schedule.

(6) Schedule 6, page 43 (line 1) to page 49 (line 9), omit the Schedule.

Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

I would just like to say I take the minister up on his challenge. If I am elected to the next parliament, I will be voting to reverse these measures because I think they are totally unfair and unreasonable. Really, government should be about priorities for people and we have seen the government's priority has been very narrow. First they wanted to introduce a co-payment which would have attacked the elderly and then they wanted to increase the pension age to 70 years, but they were unable to do that. They have come back today and decided that they are going to take from the pensioners of Australia parts of their pension to make their lives not better but harder and more difficult. They do this in a situation where Australia has adequate financial capacity to look after those less fortunate than ourselves and we have debt levels among the lowest of the OECD countries.

Interestingly enough, in Australia we spend about eight per cent of our GDP on the elderly and in Europe they spend about 20 per cent of their GDP on the elderly and disadvantaged. That gives you an indication of the priority this government puts on the elderly and disadvantaged people. Are Australians any less worthy than those that live in Europe? Do they have any less need? Are they better looked after? You would have to say no when you look at the amount of money being spent on the health system as a proportion of GDP compared with what is spent in Europe, the United States or other developed economies.

Again the government seems to be attacking those that can least afford it. A person who has $25,000 in earnings and superannuation will lose over $8,000 of their pension. It hardly acts as an encouragement for people to put money away for super to provide for the future. They are going to see half of it go. Also, they will lose their eligibility for part of the pension. That is a negative incentive. We really need to provide an incentive the other way. We need to boost demand in this country to ensure that the money supply is sufficient to create growth so the government will have the revenue to provide for those that need support.

I do not think I have ever seen in my life a person who is receiving the pension enjoying a high standard of living, wasting money, or going out and doing things that other Australians are entitled to do. Life should not end when you reach pension age. We should not disregard Australian people who have served this country well over many years and who fought in the Second World War, Korea, Vietnam and other conflicts for the nation, only to find in the twilight years of their life they have been disregarded, that they have been given very low priority on the government's agenda.

Surely the government should be a government for all Australians, one that has a responsibility to look after their standard of living, their future and what they can aspire to be. We do not just love our mothers and our children. We love our grandparents as well, and our love should not be diminished by the way we treat them in society. What sort of example does that set for future generations coming forward? It is not just about the present; it should be about the past and recognising that senior citizens of Australia are people we should respect, that wisdom resides in a lot of our elder citizens, that they still have a lot to contribute to Australia. How can they have the respect of the community if they are constantly being attacked, if their income and their lives are being slowly diminished by a government that continues to cut away at the small entitlements that they have at the moment?

This comes at a time when we have a government that has less debt than the Menzies government had. The Menzies government had a debt of about 40 per cent of GDP. Today it is around about 14 per cent of GDP. Where has that other 30 per cent gone? Why doesn't the Liberal Party become the party of Bob Menzies, which looked after all Australians? It was a broad church. It provided a rising standard of living. It had expectations that whoever you were, wherever you came from, regardless of how much money you had, you could have a fair go in this country and be looked after. Why do we have to have a persecution philosophy, where we aim at those people who are unable to support themselves or defend themselves when under attack? Why do we constantly attack them? Why don't we create the sorts of incentives that are needed in this country to provide a rising standard of living for our people? Bob Menzies would be rolling in his grave if he saw the sorts of measures that are coming forward in this parliament to attack those who cannot look after themselves, to attack the pensioners of Australia.

The pension, for many people, has been sacrosanct—most important in their sustainment and their lifestyle. I think we have to vote against these measures. We have to support our elderly. We have to support those on a pension and a fixed income. We realise that the figures that the minister quoted today are not extraordinarily high when compared with those of other competing nations that have similar standards of living to our own in Europe and the United States. I will be voting against the measure.

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

As a general rule, I support means testing and the idea that people who have more money should pay their fair share, so on the face of it you would think I would vote with the coalition government and the Greens on this Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015, but I cannot bring myself to do that. In this case I will support the Labor opposition. I will do that for a range of reasons. For a start I cannot bring myself to support a broken promise. The Liberal and National parties before the 2013 federal election made it very clear that there would be no change to pensions—and this is clearly a change to pensions. That is wrong, and I will not support a broken promise.

I also find that I cannot support something that does not have appropriate grandfather provisions. At the end of the day pensioners have made a lot of decisions over many years to get themselves in the situation they are in. It is not fair out of the blue to strip income away from them, and that is what some of them are now going to face. We already heard the example of some pensioners losing $8,000 a year. When you are on a modest income a small amount of money can make a disproportionate difference. That extra bit of money might be your only discretionary income. In fact, that extra bit of money might already be built into the costs structures you have in your life these days. The government cannot simply come along and with no warning take it away from them.

I would have a much different response to this bill if there were appropriate grandfather provisions so that every current pensioner has their current arrangements maintained. The grandfather provisions would ensure that people who are soon to retire are also able to retire with the old arrangements. Make these sorts of changes something for the future so that people who are still maybe 10 years away from retirement can factor them into their calculations and plans.

I also am concerned that these changes are badly designed. It does not make any sense that, say, a couple with $600,000 in assets would effectively have a bigger income than someone with $800,000 in assets. For a start, that is unfair, but it is also a disincentive to people to save and to be putting as much money as they humanly can into superannuation. And what of the people who have been struggling to save outside the superannuation system—say, to leave some extra for their kids? What about those people? It is not acceptable simply to say that people can draw down their super more quickly, because the reality is that this asset threshold includes all of their assets, including non-super assets. For some people, it will include substantial sums of money that they have saved to leave an inheritance for their children—people who have, say, gone without things their whole life to leave that little nest egg for their kids. So the government cannot just defend its bill by saying people can draw down their super more quickly, because it just does not work that way. In fact, for a single person, by the time they have their car, their goods and chattels, a bit of super and a bit of cash aside from super, there is not actually a lot of super there, and they will draw it down much too quickly and in fact, before they know it, be on the full age pension, and they will have lost their nest egg that perhaps they were keeping for any unforeseen medical bills and so on.

I will just close by making the point—I have made it many times in this place—that we are a rich country. We can afford to look after the young, students, the unemployed, the sick, the disabled and older Australians. With an annual federal budget of close to $400 billion a year, with the right priorities, we can look after the people that need to be looked after. We can certainly afford to pay more to people on the full age pension. The issue here is not that it is one or the other. We have enough money to keep the existing pension arrangements and to find a bit of extra money for people who are on the full age pension at that end of the spectrum. That is what we should be turning our minds to: working out how we can help people on lower incomes better while keeping in place the arrangement for people who are a little bit better off.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise today because it is a great shame that we are even having this debate in the chamber here today. If the Prime Minister were a man of his word, we would not be here today debating this bill. Before the election, the Prime Minister said there would be no changes to pensions. There was no ambiguity in that statement—no ifs or buts. The PM made very clear to the Australian people, who remember well that promise: if elected, there would be no changes to the pension, full stop. Yet here we are today debating exactly that: changes to pensions. It is very clear from the title of the bill—Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015—that this is indeed an amendment to pensions.

Labor will hold this government to its promises. We will be opposing this bill, we will again stand with the Australian pensioners, and we will take this up to the next election, because breaking your promises to the Australian people should count. You cannot take money from pensioners while protecting wealthy Australians. It is wrong, and Australians know it is wrong.

In the analysis of the bill, Industry Super Australia have said that the changes proposed will not in any way be delivering fair or sustainable pensions, as claimed by this government. They said:

Current retirement incomes policy settings are falling short of their goal of providing all Australians with a comfortable living standard in retirement. The net impact of the changes contemplated by the Social Services Legislation Amendment Bill 2015 will make things worse. In particular, the legislation will adversely affect women and those on low to middle incomes over time.

Their analysis has directly suggested:

That is a point that I think this parliament needs to be very conscious of.

Over two thirds of single women aged 55-69 will retire on incomes below a comfortable standard. Even younger women face a difficult future. More than half of women currently aged 25-29 will retire on incomes below a comfortable standard.

NATSEM's analysis agrees that measures in this bill will unfairly impact Australians on lower incomes. Their modelling suggests that nearly 80 per cent of these cuts to pensions will be borne by Australians in the lowest income quintile.

Make no mistake: as I said, it is Australian women in particular—our widows and those living alone—who will bear the brunt of these cruel measure. I would like to draw the House's attention—and that of the minister while he is in the chamber—to a constituent of mine from the electorate of Newcastle. Patricia is a single woman, separated from her husband some years ago now. She wrote to me and said:

I'm about to retire after working until 68 (as suggested by the current government) and have discovered that, with the new proposed budget, I will end up about $4,000 per year worse off because I have, apparently, tried to hard to top up my super, silly me, I should known they'd change the rules!

Hope you'll help stop these new assets test rules which will really affect many middle income people like me.

Well, we can assure people like Patricia that Labor will be opposing these proposed measures. Patricia is one of thousands of women who will be in the same boat. Contrary to government opinion, these are not women who are 'liquid asset billionaires'. These are women who have struggled. We already know it is difficult for women to achieve equity in pay and then, further, ensuring that their superannuation is equal to that of their male counterparts. But women—single, divorced, widowed or otherwise—who are looking to retire are grossly impacted by these measures put before the House today.

My question to the minister is: where is the fairness in these proposed attacks on part pensioners and their retirement incomes? Has the government done any modelling? Has the government instructed the Office for Women, or any department for that matter, to perform modelling on the impact of these cuts to Australian women? When modelling shows that 80 per cent of single women retiring in 2055 will be disadvantaged, further entrenching social inequality in Australia, how can this minister, his government and the Australian Greens justify their— (Time expired)

Cathy McGowan (Indi, Independent) Share this | Link to this | Hansard source

I have two comments I would like to make in relation to this Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015. The first is a call from my constituency for the government to please be consistent and to stop changing the goalposts. The people who come into my office say it is really hard to manage their affairs in the long term if the government keeps changing the rules and shifting the goalposts. Minister, there are a number of ministerials coming in your direction in the near future putting that into writing. This is a heartfelt call, as people try to get their affairs in order for the long term, for some bipartisanship and consistency. That is the first of my requests today.

The second is I would like to comment on the process from last week. Minister, it is really important for me to consult with my constituents on how I vote. When changes are made without any reference to the crossbench or any discussion with us about changes to legislation, as happened last week, it causes enormous confusion in my community. I beg, plead and ask you, as far as possible, to give notice to the crossbenchers when changes are made, and give us a chance to go back to our communities and consult with them, particularly on important legislation like those before the House today. Thank you.

Question agreed to.

Honourable Members:

Honourable members interjecting—

A division having been called and the bells having been rung—