Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) the OECD:

  (i) calculates that Australia's expenditure on age pensions is currently 4 per cent of public spending, and is projected to be 4 per cent in 2050, which compares with 9 per cent and 10 per cent respectively for the OECD; and

  (ii) has stated that 'the old age income poverty rate in Australia is high at 26 per cent compared to 13 per cent across the OECD in 2015';

(b) the Benevolent Society:

  (i) released The Adequacy of the Age Pension in Australia: An assessment of pensioner living standards report in September 2016, concluding from its research that 'the age pension in Australia is inadequate'; and

  (ii) also concludes that 'home ownership constitutes the single biggest factor contributing to financial hardship among pensioners' and 'age pensioners who are renting, in particular those who are single, are the worst off';

(c) deeming rates dramatically affect the wellbeing of Australian pensioners; and

(d) whilst the Government has reduced deeming rates for the first time since 2015, it has not been adequately responsive to changes in the cash rate; and

(2) calls on the Government to:

(a) establish an independent tribunal to:

  (i) assess the base rate of the pension;

  (ii) assess the Commonwealth Assistance Rate;

  (iii) assess the deeming rate; and

  (iv) determine the best mechanism for regular review; and

(b) reduce the financial gap between age pensioners who are home owners and those who are renters.

Whilst, on average, Australians enjoy a very high quality of life, not all Australians get to experience this prosperity. OECD data has discovered that Australia's pensioners are the second-worst off in the world. The Benevolent Society and their Fix Pension Poverty campaign argue that the age pension in Australia is inadequate—I agree—particularly if you live in regional Australia. Almost all of the 1.5 million Australians who are receiving the full age pension are experiencing income insecurity, with almost one-third in poverty. Single female pensioners who are renting in the private market and have chronic health issues are, on average, the most financially disadvantaged.

The age pension differs from Newstart allowance in that it is not a working age payment, nor is it welfare. I want to underline that. The age pension is not welfare and should not be treated as such. It is a post-working-age entitlement. The role of the age pension is to ensure our elderly have the income they need to cover their day-to-day living costs and medical expenses. Many age pensioners are unlikely to be employed again or receive other sources of income. Furthermore, age pensioners are more vulnerable to government decisions and shifts in the economy, such as rising energy costs. I believe, therefore, that we need to establish an independent tribunal for social security payments to ensure that Australia's elderly are, indeed, properly supported on the pension.

Many of our age pensioners who live on or under the poverty line have to make sacrifices to ensure that they have the necessities. Many are missing meals or not using heating in order to ensure that they can visit the doctor or afford their lifesaving medication. Many also have become heavily reliant on charity organisations to continue to have access to affordable housing, meals and healthcare services. The rapidly declining rate of homeownership in Australia has meant that more age pensioners are renting in the private market.

The Benevolent Society found that those who are renting and living independently have higher rates of expenditure compared to those who own their homes, with single renters spending on average $220 more per fortnight than home owning pensioners. I want to say here that I also know of many age pensioners who own their own home but who, too, are struggling on the pension. While this data is from 2015, rent prices have only increased since then, and the government pension has not caught up. It is important that we relieve renting pensioners from this financial burden and close the gap between renters and homeowners. Home ownership is the biggest source of average Australian household wealth and gives many individuals the financial security to rely on the pension, particularly in those early years post employment.

The Benevolent Society is doing incredibly important work in this area through the Fix Pension Poverty campaign, and I really do encourage everyone in this House to help continue this conversation. I meet too many elderly people who cannot afford a new set of dentures, whose dentures are broken, who are waiting from pension payment to pension payment, and who are terribly worried about their council rates and heating bills. If you live in regional Australia, there are no buses, so you also need to have a reliable car in order to travel, even just to go and do food shopping. The cost, the burden, is greater if you live outside of the metropolitan area. I urge the government to properly look at this issue.

It is my intention with this motion to raise these important issues, because we need to ensure that there is a good quality of life for our elderly Australians, who've contributed so much to our country. Finally, I'd just like to close by thanking ANU intern student Krystal Guo. Krystal has worked on this matter with me. I'm very appreciative of her work here today on her first day in Parliament House. I commend this motion to the House.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

Do we have a seconder for the motion?

Anthony Byrne (Holt, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Can I firstly start by say that there is no-one in parliament who does not believe that it should be a core contract with every member of our community that in the twilight of your life you can live it in relative comfort, security and certainty of income. That is one of the key things that we have believed in, as a democracy and as a Liberal Party, for a very long time. It was the first Liberal Parties of the UK that introduced age pensions to ensure that people, throughout their lifetime, could end their years with dignity, because that was critically important to what we had to do.

To that extent, Australia and both sides of the House can take credit for this. Either through good management or dumb luck, we have created the most successful retirement income system in the world. I notice this motion speaks about the fact that we spend only four per cent of GDP on retirement incomes for Australians, whereas the OECD average is eight per cent, moving to nine per cent. This is, in fact, a good thing. The reason that it's a good thing is that we have created—through our superannuation system and targeted benefits to those people who are living the last few years of their lives, whether it be the PBS, rental assistance or age-care subsidies—a sustainable system. Australia is in the position where our unfunded liabilities are less than five per cent of GDP. Those of the UK are 900 per cent. Those in the United States are 550 per cent of their GDP. Most European countries will not have the capacity in the future to pay down some of the unfunded liabilities that they have accumulated in the post World War II years. They are reaching a critical situation where they will be unable to provide to the generation that comes after us the sort of security and certainty that we take for granted in this country. That's what we have managed to achieve in Australia, and that's why what we've managed to do is so critical. There is no other country in the OECD that is able to provide the sort of sustainability that we've been able to provide to our elderly. The fact that it is sustainable is something to be celebrated, not bemoaned.

The largest civil engineering project in Australia at the moment is the WestConnex project in Western Sydney. It's about $23½ billion over nine years. In the same time that the New South Wales and federal government will have spent $23½ billion on a road that provides relief to millions of people living in New South Wales and improves their lifestyles in a manner and form that cannot be described unless you have actually had to sit in Sydney traffic day in, day out for years on end, we, as a federal government, will have spent close to $2 trillion on welfare and transfer payments in Australia. For people sitting in the bottom 20 per cent of the income quintile, which includes a lot of people on full pensions, for every dollar they pay in tax they receive 900 times the benefit of someone in the top 20 per cent quintile.

Our income tax transfer system is 29 times more redistributive than that of the United States. People say, 'Oh well, that's the United States.' It's 19 times more redistributive than France's, 18 times more redistributive than Canada's and 17 times more redistributive than the average of the Scandinavian countries. We have one of the largest tax transfer systems in the world and it is also one of the best targeted, which is why, compared to other nations in the world, the fastest-growing income group in Australia has been the bottom 20 per cent of income earners; whereas, in the United States, they haven't received a real income increase since the 1970s.

Removing the capacity for any government, whether it be our government or future governments, to set the deeming rate, which is not just about cash but across all assets, and give it to an independent body threatens the sustainability of this system. This is why this government was against removing franking credits for people in retirement. It's why we have always stood up for people in retirement, protecting their incomes so they can enjoy the last remaining years of their lives.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | Link to this | Hansard source

I congratulate the member for Mayo for putting this issue on the agenda of the Federation Chamber and highlighting in the motion the fact that many pensioners in Australia are living just above or below the poverty line and struggling to make ends meet. A combination of the changes that this government has made to pension taper rates has seen up to 200,000 Australians kicked off the pension. The inertia that the government's shown on deeming rates has meant that many are struggling with cash in their bank balances. Of course, the government's lack of an energy policy means that many pensioners who are struggling to make ends meet can't switch on their heaters during the winter months or their air conditioners during the summer.

I congratulate the member for Mayo for raising this issue of pensioners because they're often forgotten by this government. For years the Liberals and Nationals have been short-changing pensioners with inflated deeming rates. It's been these reckless and deliberate policies that have pushed too many pensioners in Australia into poverty.

The Reserve Bank cut interest rates five times between May 2015 and July 2019, with the cash rate now at a record low of just one per cent, but the Liberal-National government didn't announce a single change in the deeming rates during this time, setting them as high as 3.25 per cent. This has meant that thousands of people were pushed onto the part pension or have received a lower rate—

A division having been called in the House of Representatives—

Sitting suspended from 16:57 to 17:09

The Liberals and Nationals had to be dragged kicking and screaming to make even a small change to the deeming rates, with pensioner groups and Labor running a campaign to make them fairer. It is no surprise to see once again the failure of the Liberals and Nationals to recognise the pressure on pensioners and their budgets. Despite promising no cuts to the pension in 2013, after cutting the pension in 2014, the government's track record, in doing what they've done, has been the opposite. In 2014, the Liberals and Nationals tried to cut pension indexation, a cut that would've meant that pensioners would have been forced to live on $80 a week less within 10 years. In that same 2014 budget, the government slashed $1 billion from pensioners and as much as $12,000 a year by changing the assets test. In 2016 the Liberals and Nationals tried to cut around $190,000 from pensioners as part of their plan to limit overseas travel for pensioners to six weeks. Labor, of course, opposed all of these reforms.

For two years the LNP government planned to scrap the energy supplement and cut the age pension for 1.5 million pensioners. For four years, this government tried to raise the pension age to 70. The government has cut and outsourced over 2,500 jobs from Centrelink—the people who on a regular basis provide support and advice to pensioners, particularly those pensioners who are unable to access the internet and find using the phone service frustrating. Having that face-to-face service through Centrelink for pensioners is vitally important for their welfare and their living standards, and this has coincided with a blowout in call waiting times to Centrelink and waiting times for the pension. And it's now too hard to access the pension, with many people waiting many months for payments and some, unfortunately, just giving up.

Labor fought each and every one of these changes to the pension that have made life harder for many elderly Australians. They shows that the Morrison government's history of changes to the pension have meant that many pensioners in Australia are struggling. Although they have acted in respect of the deeming rate, it certainly is too little, too late, with the upper rate still as high as three per cent when we know that the cash rate is now down at one per cent. So, once again, the government refuses to listen to those pensioners that are struggling.

And then, on top of that, add the fact that many pensioners tell us that they can't afford to switch on their heaters at night during winter because they can't afford the exorbitant electricity prices that have been forced upon them by this government's inaction and the fact that, after six years, they still don't have an energy policy for Australia. It doesn't matter who leads this LNP government, cuts to the pension are part of their DNA. Labor will continue to stand up for pensioners, hold this government to account on deeming rates and fight to keep more Australian pensioners out of poverty.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

As the member for Goldstein, it's a privilege to be able to follow the previous speaker, and that is because he is probably public enemy No. 2 of pensioners and retirees in Australia. He's only followed, of course, by another member, the former shadow Treasurer, who made a deliberate and malicious attack on the retirement savings and income of a million Australians before the last election. To have them come into this chamber and get up to deceive, as far as I'm concerned, the public about their proposition and objective, when, in reality, what they have done at every point is sought to raid the income and retirement savings of a million Australians, is preposterous.

The reality is that Australia, of course, has quite a complex tax and transfer system because we understand the importance of making sure that people have dignity and security in their retirement. We understand that people at all stages, particularly the vulnerable stages of life, need to get the support and assistance to be able to live with a sense of dignity and purpose, but we also encourage people to save and put money away for their future. We recognise that responsibility is the core of what makes this great nation great, and if people take more responsibility they'll be more successful into the future.

This government, at every point, has taken practical and prudent measures to make sure that Australian retirees and pensioners can get the assistance and the support that they need. That's why, when there was a half-a-percent drop across two months of interest rates at the start of this year, we adjusted the deeming rate to make sure that retirees and pensioners would not be left substantially out of pocket. Against the backdrop of making sure we honoured our election commitment to deliver a budget surplus, we've made sure that people have enough money in their wallets to be able to go out and live their lives. We have taken prudent and practical measures to make sure that we adjust the deeming rate to recognise the changing economic circumstances before us.

The best thing that we can do to make sure that pensioners and retirees don't depend on adjustments to deeming rates is to make sure that there's strong economic growth so that they get the money back through dividends from their shares, if they have them, and make sure that the budget is healthy and in surplus so that we can fund a pension for Australia to meet people's expectations so that there's no need for an adjustment of the deeming rate in the first place.

Compare that to the proposition the Labor Party took to the last election, when they turned around to Australian retirees and said, 'We're not going to reward you for your sacrifice and your savings. We're going to raid and take away your overpaid tax and keep it for ourselves, because we don't trust you or that you understand how best to live your lives. We don't believe there should be any reward for that sacrifice.' Before the election they ran a malicious and deceitful campaign that said that people on low incomes wouldn't be impacted. Yet post the election we know the Leader of the Opposition has now accepted and acknowledged that they got it wrong; many low-income Australians were going to lose a third of their incomes.

After 18 May, a great sense of relief was felt in this country by those millions of Australian retirees who woke up the next day and knew that on 1 July they weren't going to have a third of their income stolen from them overnight by a Labor Party government. That's the sense of relief that people had from the election of the coalition government. It was not just relief that we'd be in the best position to support and assist people with adjustments to deeming rates because we're running a healthy budget position against the backdrop of an economy in its 28th year of uninterrupted economic growth but also relief from the constant fear, the elephant in the room, the discussion around all the bowls clubs, Rotary clubs, Probus clubs and everywhere else in this country: the risk of a Shorten Labor government.

What have we heard in the past 48 hours? Their national president has been saying they didn't get it wrong and they've got to go back and hit the retirement savings of a million Australians once again. Some of us won't sit down and take this lightly. Some of us are going to stand up, stare this down and fight every step of the way for the rights of Australians to be able to stand on their own two feet, preserve their dignity, preserve their sacrifice, preserve their lifestyle and make sure they're able to stand up against the malicious attacks of the Australian Labor Party.

Pat Conroy (Shortland, Australian Labor Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I welcome this private member's motion around support for pensioners from the member for Mayo, a most excellent member. I want to talk specifically about deeming rates, because, by keeping the deeming rate so high, this government is effectively stealing from pensioners. A high deeming rate is effectively a cut to the pension. And while the government has reduced deeming rates for the first time since 2015, it has not adequately responded to changes in the cash rate. So part-pensioners who've saved all their lives and have invested their savings to allow them some little bit of comfort in retirement are being robbed by this government.

There is no doubt that older Australians are feeling the pinch—members are hearing about it all over Australia—but it particularly resonates in a seat such as mine, Shortland, where one in five people are aged over 65. They have written to me, phoned me and bailed me up at mobile offices and events out in the community to tell me how they're not managing to keep up with the cost of living. They say, 'You tell me which bank will give me anywhere near the interest rate that the government says I'm getting.' I can't tell them. In fact, I've written to the Treasurer asking to nominate a bank offering deposit rates equivalent to the deeming rate and he's failed to respond. The truth is no bank will.

Of course, those on the other side will say that there are other ways to invest to gain a greater return. We all know that part-pensioners cannot be risky with their savings. They cannot take the chance that they will end up losing it all, so the bank is their option. The bank is not paying anywhere near what the government deems it to be.

It's a cruel joke that is being played on older Australians, but it's not new. For years the Liberals and Nationals have short-changed pensioners with inflated deeming rates. The Reserve Bank cut interest rates five times between May 2015 and July 2019, with the cash rate now at a record low of just one per cent. But the Liberal-National government didn't announce a single change in the deeming rates during this time, setting them as high as 3.25 per cent. This meant many thousands of people were pushed onto a part-pension or received a lower rate of the pension. Although the government recently adjusted the deeming rate, it is still too little, too late. And deeming rates are still as high as three per cent. The Liberals and Nationals had to be dragged kicking and screaming to make even this small change to the deeming rates, with pension groups and Labor running a campaign to make them fairer.

The failure of the Liberals and Nationals to recognise the pressure on pensioners' budgets should not come as a surprise. After all, cutting the pension is in the Liberals DNA. Despite promising no cuts to the pension in 2013, this government's track record is the opposite. In 2014 the Liberals and Nationals tried to cut pension indexation—a cut that would have meant pensioners would have been forced to live on $80 a week less within 10 years. In the same 2014 budget the Liberals slashed $1 billion from pensioner concessions, a support designed to help pensioners with the cost of living. In 2015, as social services minister, Scott Morrison did a deal with the Greens political party to cut the pensions of around 370,000 pensioners by as much as $12,000 a year by changing the pension assets test. And in 2016 the Liberals tried to cut the pensions of around 190,000 pensioners as part of their plan to limit overseas travel for pensioners to six weeks. And for two years now the Liberals and Nationals have planned to scrap the energy supplement, cutting the age pensions of around 1.5 million pensioners. For four years the Liberals have also tried to raise the pension age to 70. And to add insult to injury, this government has cut and outsourced over 2½ thousand jobs from Centrelink. This has coincided with a blowout in waiting times for Centrelink calls and pension applications. It is now too hard to access the pension, with many people waiting many months for payments to come through.

Labor fought tooth and nail each and every one of these Liberal cuts to the pension. History shows that the current Prime Minister will cut the pension the next chance he gets. It doesn't matter who leads the Liberals or Nationals, cuts to the pension are in their DNA. Labor will continue to stand up for pensioners and hold the government to account on deeming rates. By holding the deeming rate so high, they are imposing a cut, by stealth, on part-pensioners. It is unacceptable. It stands in stark contrast to their professed love of pensioners and self-funded retirees at the last election. It is hypocrisy writ large by this Liberal-National government. I have been very active in opposing it. I have been very active on behalf of the one in five people in Shortland aged over 65 in saying that deeming rates must be reduced now.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.