Linda Burney (Barton, Australian Labor Party, Shadow Minister for Families and Social Services) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes the Coalition Government has repeatedly tried to cut the pension, including pensioner concessions, the assets test and indexation, and attempted to increase the pension age to 70".

The Pension Loans Scheme lets older Australians get a loan from the government to supplement their retirement income. It is an important program, offering older Australians another option for improving their retirement income. Established in 1985, the scheme is a legacy of the Hawke government. But take-up rates for the scheme have been low, primarily due to a number of barriers to access. These barriers are well known and have been known for the nine years of this government. They include: not being accessible to all older Australians who own their home; the complexities of the loan scheme being difficult to understand and navigate; a lack of safeguards against securing excessive debt; high interest rates on the loans; and cultural concerns Australians have around protecting the family home in retirement, and family inheritance.

In the 2018-19 budget the government announced it was finally moving to introduce legislation to address the low take-up rate. Labor welcomed and supported the changes, and take-up rates did improve—moving from 780 participants in 2018 to over 5,000 participants in September 2021. But this improvement is against a potential pool of around four million Australians of age-pension age, including around two million pensioners who own their own home. So this result is not good enough. Many pensioners are asset rich but cash poor. They are struggling to make ends meet and would benefit from options offered under the scheme. Many older Australians living in retirement homes have contacted me to say having access to this scheme would make a big difference to their quality of life. The government's actions demonstrate they know just how far short their previous efforts to improve this scheme have fallen.

This bill introduces two new features to the scheme. Firstly, it introduces a new safeguard: the no negative equity guarantee. This will prevent the Commonwealth from recovering the amount of the debt exceeding the value of the asset. Secondly, it allows participants to access a portion of their payments annually as a lump sum advance. This change will help older Australians to make larger purchases such as extra support or to make home modifications. These are improvements to the scheme, and Labor welcomes them. They are changes that could and should have been made earlier.

The government committed in the last budget to a campaign to raise awareness of the scheme. Crucially, they have kept secret just how much they plan to spend on this campaign. I think every Australian would have questions about this government spending an unknown amount of public money on advertising during an election year. This is a government that thinks of ad campaigns first and policies second. That's why this measure comes up with a branding effort, changing the name of the scheme from the Pension Loans Scheme to the Home Equity Access Scheme.

At MYEFO, the government further reduced the interest rate, to a level more in line with other mortgages: 3.95 per cent. Labor supports the reduction of the interest rate, but it comes way too late. Participants have been paying interest rates higher than almost every other mortgage across Australia for years. Worse still, Labor knows these higher interest rates have been indirectly contributing, as a savings measure, to the government's budget repair policy. These are savings made off the back of older Australians, including full-rate pensioners, and Labor believes the changes in the bill are another job half done and another missed opportunity to fully address all the well-known and identified barriers that stop pensioners taking up this scheme and improving their quality of life in retirement.

The University of New South Wales's analysis shows that, whilst these changes will make a modest difference, much more work remains to make sure access is easy for those who need it. Too many older Australians in retirement homes and other communities have no access to this scheme. This lack of access is unfair. Addressing this will take some work—work that a government which cared about making a difference instead of an announcement would already have done.

Pensioners won't be fooled by the government's half-hearted attempts to support them. They know that this is a government that has tried to cut the age pension and reduce the living standards of pensioners at every opportunity. In fact, to improve the budget bottom line, this government has tried to cut the pension and increase the pension age to 70 in almost every one of its nine budgets, including the three budgets where the current Prime Minister had the job of Treasurer.

In the 2014 budget, they tried to cut pension indexation, a cut that would have meant pensioners would be forced to live on $80 a week less within 10 years. This unfair cut would have ripped $23 billion from the pockets of pensioners in Australia, affecting every single pensioner. In the 2014 budget, they cut $1 billion from pensioner concession support that was designed to help pensioners with the cost of living. Also in the same budget, they axed the $900 senior supplement to self-funded retirees receiving the Commonwealth seniors health card. In the 2014 budget, the coalition government tried to reset deeming rate thresholds, a cut that would have seen 500,000 part pensioners made worse off. In 2015, they did a deal with the Greens to change the pension asset test and cut the pension to around 370,000 pensioners by as much as $12,000 a year. So many part pensioners lost their pension because of this coalition-Greens saving measure. In the 2016 budget, they also tried to cut the pension for over 1.5 million Australians by scrapping the energy supplement for new pensioners. The government's own figures showed this would have left over 563,000 Australians currently receiving a pension or an allowance worse off. Over 10 years, in excess of 1.5 million pensioners would have been worse off.

On top of all this, the government spent five years trying to increase the pension age to 70. They waited four years before adjusting the deeming rates for age pensioners, despite the Reserve Bank continually reducing its rate for the same period, another indirect saving measure for the government. The coalition still have cuts to pensions in the parliament. They want to completely take the pension supplement away from pensioners who go overseas for more than six weeks. This will see around $120 million ripped from the pockets of pensioners. They still want to make pensioners born overseas wait longer before qualifying for the age pension by increasing the residency requirement from 10 to 15 years.

Spiralling out-of-pocket healthcare costs are a big concern for older Australians. These have increased because of the Medicare freeze put in place by the coalition government, and no-one spends nine years, including three as Treasurer, trying to cut the pension and increasing the pension age to 70 unless it is what they really believe in. Pensioners know they can't trust the Morrison-Joyce government if they are to protect their living standards and act to offset the rising costs of living.

In conclusion, the coalition have gone through three leaders in their nine long years in office. No matter who the leader has been, cutting your pension has been an enduring priority. Cutting the pension is in their DNA. But Labor's support for older Australians is unswerving, so we welcome the changes in this bill and we will not stand in the way of the bill. We have moved a second reading amendment. We will support older Australians, and our support is unswerving, as I've said. We welcome the changes in this bill and the interest rate reduction announced at MYEFO, but more work is needed to enable all older Australians of age pension age to access the scheme, untap the equity in their homes to improve their retirement income, and enhance their quality of life.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Matt Keogh (Burt, Australian Labor Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. I totally reject the amendment put forward by the previous member, which frames the government as having failed badly on pensioners and older people in Australia. I reject that entirely, but I think this bill is a good move. It addresses some of those great problems, those conundrums, that people and the nation have to manage. How we fund the retirement of people in Australia at the kinds of levels that they would like to have their retirement funded at is a challenge for them and a challenge for us.

Age pensions were established in Australia at the beginning of the last century, in about 1909. At that time, when life expectancy was about 50, it was for people who reached the ripe old age of 65, so there weren't actually all that many people who went on the age pension back in 1910. If you survived that long, then you claimed your pension. Today, of course, the pension is available from the age of 66½ heading to 67. I note the comments of the previous member about the coalition trying to extend that to the age of 70. But it was, of course, the Labor Party that extended it from 65 to 67. But it is what it is, and I don't think that's a bad age.

Life expectancy is now 82.9, almost 83, years which leaves a gap of around 16 years in which people may draw an age pension, and that is the challenge that is facing the nation. It has been addressed over the long term by investment in superannuation, but I think Australians would be surprised to learn that, of that cohort of people in excess of 65 years old who are in the bracket of being eligible for the age pension, only 62 per cent actually draw on it. That would probably be surprising to most Australians. I'm sure you, Madam Deputy Speaker Vamvakinou, have gone into an office and people have asked what your pension number is as they assume everybody is on the pension. That is far from the case. If 62 per cent are drawing their age pension, it stands to reason that around 38 per cent are not, and I think this is the great success of the policies of a number of governments. Compulsory superannuation was brought in by a Labor government under Paul Keating—I think he was the Treasurer at the time, in fact—at a rate of four per cent. It increased to nine per cent in 2002 under a different government and now it's drawing its way northward again, and the current rate is 10 per cent and that is happening under a Liberal government, a coalition government. So there is broad support across the political parties for the notion of compulsory superannuation.

It's worth noting that there has also been an explosion in the net wealth of older Australians making voluntary contributions through superannuation. I'm sometimes put upon by senior Australian saying, 'Well, what are you doing for independently funded retirees?' What we do for independently funded retirees is set up this amazing system where the taxpayer subsidises your contributions into superannuation, whether that be done in the compulsory manner or voluntary. The 15 per cent flat tax gives the means for senior Australians to actually set up their financial affairs as they head towards retirement in a situation where they pay no tax. That has been subsidised by the taxpayer.

I'm certainly not decrying that, but I think people should understand that's how this very generous scheme by world standards has come about. It's led to that drop off in the number of people drawing on the age pension in their older years, which is, of course, the safety net. That safety net is designed to give a good standard of living, not a luxurious one by any means but a reasonable standard of living. An interesting way that the age pension is set is that it is not set by any one indicator; it is set by whichever is the highest between the CPI or the aged-sector expenditure barrel or a percentage of average weekly take-home male earnings. That means, on any one of those criteria it rises faster than the other two. So it is a generous scheme in world context, and, as I say, it provides a good standard of living but not a magnificent one, which is where this legislation and the personal loan against the family home scheme sits in place. We should celebrate what we've done.

At the moment, the pension stands, with the supplementary payments pension, for singles at $967 a fortnight and for couples at $729 each or a combination of $1,458 a fortnight. So I think we can safely assume that's the lowest rate of pay for people who are over that age of 66½ at the moment. The pension is brought down on a sliding scale according to your assets and income, assuming you are earning an income from your assets. That's the base rate. But, of course, the family home in Australia is not included in the assets test, and 80 per cent of Australians over the age of 65 own their own home. Again, this is a tremendous achievement in the world scale. In Australia it is still one of the things that we aspire to—to own our own home. Successive governments have recognised that that is a separate investment to everything else that that particular person can lay their hands on. So the family home is not included in the assets test.

But in the last 10 years—in fact, in the last 20, 30 or 40 years or any time frame you'd like to look at—there has been a spectacular increase in the value of the family home. Over the last 10 years, it's perhaps been as much as $200,000 or $300,000 or $500,000. In Sydney, the median value of a Sydney residence is $1.3 million. It would stand to reason that if your major asset is outside the pension requirements you should be able to utilise in some way that great increase you have had in your wealth by taking a risk at a younger age, saying, 'I will take on this debt, I will take on the challenge and I will pay off the family home.' Rather than having to spend a modest retirement, perhaps they might elect to spend a better financed retirement and get a little bit more in their latter years.

The obvious way into this is a reverse mortgage. They are available in the commercial market. But for many it's a pretty new concept. With a family home that they've scraped and saved for all their lives and consider to be sacrosanct, they venture into the commercial market with the mentality, 'I have worked for and paid for my house; why would I put it at risk?' It is of concern to them that somehow the market might turn against them and they might end up losing their family home or they might end up losing the value of the family home because they've drawn down on it in their retirement. It's a fairly unlikely outcome given the track record of real estate in Australia, but you can understand why it is a real concern for these people.

So government stepped into that space some years ago and provided the Pension Loans Scheme, where, rather than taking your loan out against the bank you take it out from the federal government. It's breaking the ice in this area. But this amendment actually eliminates that fairly remote possibility that the owner may overdraw the value of their property, resulting in they or their estates actually owing a debt to the Commonwealth. I don't think it will be a game-changer, but I think it is sensible legislation and it carries, I think, minimal risk for the Commonwealth and the taxpayer. This is to get more people to recognise that this is part of their wealth that they generated during their life and that there's no particular reason to leave it entirely intact for a second generation. Of course we would all like to leave our children a good start in life, but it is not incumbent upon the current taxpayer that they be funding somebody in the future. So it's a choice they can make. It's not compulsory. This should make it a little more friendly. The no-negative-equity guarantee will provide peace of mind to retirees that, whatever happens, they will not accumulate debt in this scheme.

This amendment also allows for a lump sum in advance twice a year. They can access, in total, for the year, up to 50 per cent of the current maximum rate of the pension back against that reverse mortgage, that offset against the family home. In the case of a single person, that would be $12,580 and, in the case of a couple, it would be $18,960 to supplement their pension. For a couple, that would put them in excess of $50,000, which is a pretty tidy income. My view is that, if you have that kind of income, why wouldn't you use it to enjoy your retirement years? So I absolutely commend the legislation and the minister for putting it forward, and I commend the bill to the House.

Kate Thwaites (Jagajaga, Australian Labor Party) Share this | Link to this | Hansard source

The Pension Loans Scheme is an important one. It allows older people in our community who are asset-rich but income-poor to have a source of income. But, of course, like everything under this government, it's been botched, and now we are dealing with a bill that attempts to fix a couple of the problems in the dying days of this parliament so that, in another case of spin and marketing, the Morrison government can say it's done something for pensioners.

The Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021 addresses some of the inadequacies of the current Pension Loans Scheme and, on that basis, deserves to be supported. But it doesn't address all the flaws in the scheme. And as the member for Barton has made clear in her amendment, which I support, it doesn't make up for this government's neglect and mistreatment of pensioners over its many years in office. Changing the name of the Pension Loans Scheme is a typical move from this government. They have brought forth a bill to change not much more than the name of the scheme. The name of the scheme has been changed to the Home Equity Access Scheme. The bill also amends the Social Security Act and the Veterans' Entitlements Act to improve the flexibility of the scheme. Again, that is a change to be welcomed.

The bill adds two new features to the scheme. There is a 'no negative equity' guarantee so that participants don't repay more than the market value of their property regardless of their debt. This is a necessary protective requirement. It is in place for commercial reverse mortgage products and it should provide people some peace of mind around taking up this scheme. The bill also allows for two lump-sum advances in any 12-month period, with each lump-sum being capped at 50 per cent of the maximum annual rate of the age pension.

These are positive changes, but they probably don't do enough to drive uptake of the scheme, which remains at a really low level. There a number of reasons for that. A lot of them go to how people understand the scheme and how it has been promoted to them. It goes to cultural issues. It goes to the complexity of financial products. It goes to the interest rates that have been set by this government around it. And it also goes to who is able to access the scheme.

One of the unfinished pieces of business that doesn't seem to be addressed by this bill is that the Pension Loans Scheme still can't be accessed by residents of retirement villages, where people own their home but don't own the land the home is on. I see from many advocates for older Australians that that is something they would like to have addressed. Unfortunately, this has not been addressed as part of this change that the Morrison government is bringing forward. Again, it is typical of this government that in drafting a bill, in making changes, they failed to listen adequately and consult adequately with stakeholders about how they can best improve people's lives, particularly the lives of older Australians and pensioners in our community.

As the member for Barton has outlined in her amendments, this government always gets it wrong when it comes to pensioners. They're focusing on a marketing effort with this bill by giving the scheme a new name. They're not doing the hard yards of actually doing the work to improve the scheme across the board and drive the uptake that would make it a success. These changes come in the dying days of this government, at least two years too late. During the past two years, participants in this scheme have been paying a higher interest rate than almost every mortgagee because this government is taking pensioners' money instead of doing the right thing by senior Australians. So now again we have a moment where I presume they have heard from their electorates, have spoken to pensioners, realise they have done the wrong thing by them and are trying desperately to fix that up before an election.

I want to be really clear that, in contrast to this government's last-minute efforts, Labor believes that this scheme can do good things for our country. It can do good things for older people and we would make it work for all older Australians. We would allow people to genuinely unlock their housing assets and improve their retirement income. And, of course, it is not just in fixing this scheme that a Labor government would be on the side of pensioners. Across the board, Labor would stand up for pensioners in a way that this government has just failed to do.

Let's go through a quick review of the government's inaction on pensioners in their history in office. In the infamous 'slash and burn budget' of 2014 the government tried to cut pension indexation, which would have left pensioners living on some $80 a week less within 10 years—$23 billion would have been ripped from the pockets of the pensioners of Australia. This was what an earlier incarnation of this government was proposing to do to older Australians. In the same budget, the government cut $1 billion from pensioner concessions, axed the $900 senior supplement and tried to reset deeming rate thresholds. What a record! It goes on: in 2015 the government did a deal with the Greens to cut the pension for approximately 370,000 pensioners by as much as $12,000 a year by changing the pension assets test. In the 2016 budget there were two things: an attempt to cut the pension to around 190,000 pensioners as part of a plan to restrict overseas travel for pensioners to six weeks, and trying to cut the pension for more than 1.5 million Australians by scrapping the energy supplement for new pensioners.

The government's record of policy misery for pensioners continues. They spent five years trying to increase the pension age to 70, waited four years before adjusting the deeming rates for aged pensioners even though the Reserve Bank continually reduced its rates over the same period. I can say with confidence that I hear about every time this government fails to adjust the deeming rates. I hear about what that means for older people in my electorate—the fact that they have been left consistently in a very unfair position by this government's failure to get deeming rates right over its time in office. This is the government that wants to axe the pension supplement from pensioners who go overseas for more than six weeks, which would see around $120 million ripped from the pockets of pensioners. These are people who might be looking for a family reunion trip to the old country. You can't do that and keep your pension. They want to make pensioners born overseas wait longer before qualifying for the aged pension by increasing residency requirements from 10 to 15 years. Everything this government does seems to be designed to make the lives of pensioners harder.

A Labor government would be different. I want to be really clear about how important pensioners and older Australians are in my community. It is a privilege to represent them in this place and to stand up for them. These are the people who built this country. We say it a lot in this place, but it doesn't seem to translate into action. They built this country and they deserve our respect. They deserve a pension system that they can rely on and that they can trust into the future. The track record of this government demonstrates that that is not what they have delivered. At every opportunity, the Morrison government and the Liberal-National governments that preceded it have taken the chance to try and slash and burn the pension. It's not good enough.

Pensioners deserve so much better than this government. They deserve so much better than a record of trying to squeeze or trying to take away a pension. Now a name change is meant to fix things in the dying days of this parliament. Pensioners deserve a government that understands they should be supported now and into the future; a government that is not obsessed with trying to find savings by squeezing the aged pension wherever it can; a government that actually understands what it means to be responsible, to be living on a pension, to be budgeting on a pension, to rely on a pension for your day-to-day life and your participation in the community. This is something I hear very often from constituents in my electorate, particularly during the pandemic. Pensioners feel like this government just hasn't understood how their participation in the community has been impacted, and how the support for pensioners through this pandemic hasn't really recognised the fact that, like all of us, they were separated from loved ones and from community, and they don't feel supported by this government through this time.

While this bill goes some way to fixing this scheme, it doesn't far enough. I wholeheartedly endorse the amendments moved by the member for Barton. I urge this government to do better by the pensioners of Australia.

Anne Webster (Mallee, National Party) Share this | Link to this | Hansard source

I rise to speak about the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. This bill will increase the flexibility of the Pension Loans Scheme, giving senior Australians more options when drawing on the equity in their homes and other real estate assets to improve their living standard in retirement. The guarantee will apply to all scheme participants from 1 July 2022. The guarantee will mean that, when scheme participants settle their debt, they will not repay more than the equity in the property used to secure their loan. This measure will enhance the strong safeguards currently in place, such as conservative age based loan-to-value ratios that minimise the possibility of a participant's debt exceeding the equity in their secured property.

Australians are living more than 10 years longer than they were 50 years ago. We want our senior Australians to enjoy the best quality of life during their retirement, and one of the key factors in achieving this is financial independence. For many senior Australians, the age pension is a key source of retirement income, but, with housing prices increasing significantly in recent years, we are seeing many of our senior Australians becoming paper millionaires with limited ability to access the benefits of their appreciating assets. Since 2003, the median house price in Sydney has grown from around $524,000 to approximately $1.33 million, and in Melbourne from around $280,000 to approximately $973,000. Even in Mallee, prices have gone up significantly in the last few years.

This is where the Pension Loans Scheme comes into play. The PLS was introduced in 1985 and is similar to a reverse mortgage or home equity release product. Like home equity release products available in the private market, the PLS enables Australians of age pension age to voluntarily unlock the equity in their home. It gives them the option of staying in their own home while boosting their retirement income. Importantly, people have complete discretion as to how they spend their money.

In 2019 the Morrison-Joyce government provided access to the scheme for all Australians of age pension age, including self-funded retirees and maximum rate pensioners. We also increased the amount available as a fortnightly loan. These changes have seen a fivefold increase in take-up over the last two years, and there are currently more than 5,000 participants in the scheme.

The changes to the PLS made through this bill will increase the flexibility of the scheme for senior Australians by providing a mechanism through which retirees can access capped lump sum amounts to meet unexpected and larger expenses. The introduction of a no-negative-equity guarantee will give participants confidence that they will not repay more than the equity they have in the property used to secure their loan when settling their debt. These changes will make the PLS a more flexible and attractive option for senior Australians in their retirement. To ensure senior Australians are aware of the scheme, its eligibility requirements and the changes made through this bill, the government will conduct an awareness campaign in the lead-up to implementation of the changes on 1 July this year.

It's estimated that around 80 per cent of senior Australians over the age of 65 are homeowners. The changes introduced with this bill will give older Australians more freedom to enjoy their retirement. This could be the freedom to visit their grandkids post COVID, to purchase that one special thing they have always wanted, to make repairs to the house, or just to remove financial pressures in day-to-day life. Over time, these reforms and our world-leading home equity regulation will help change the way we view homeownership. Your home is more than simply a place to live; it is a store of value that can be released to boost retirement living standards.

So how does it work? From 1 July 2022, participants in the scheme will be able to access up to two capped payments in any 26-fortnight period. Participants in the scheme will be able to access a portion of their payment as a lump sum advance. This will give retirees a new mechanism and greater flexibility to meet unexpected or substantial expenses. The maximum lump sum advance is capped at 50 per cent of the maximum fortnightly rate of age pension over the following 12 months—that is, 26 fortnights. Based on current age pension rates, the maximum advance payment will be around $12,500 for singles and around $18,964 for couples combined.

Participants will be able to take up to two advances in any 26-fortnight period, with the combined total limited by the 50 per cent cap. Any advance taken will reduce the amount of the fortnightly Pension Loans Scheme payment received by a participant. The amount a participant can receive will generally be the same, regardless of whether they take an advance payment, fortnightly payments or a combination of both. This will protect participants from building excessive debt balances while providing them with flexibility on how they draw on their real estate assets for self-support. As with all financial products, it's important to note that people considering participating in the scheme are advised to seek independent financial advice to ensure the Pension Loans Scheme works for them.

Homeownership has always been the bedrock of our society. We know that most Australians want to stay in their own homes during retirement—often a place with decades of memories. We want to give older Australians the confidence to tap into a small proportion of their home equity to increase their retirement outcomes. This bill is all about giving our senior Australians more choice and control in their retirement lifestyle.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. The Pension Loans Scheme is a long-standing legacy of the Labor Hawke government. The Pension Loans Scheme is one of a wide range of Labor policies that have sought to ensure the safety and the dignity of older Australians as they move through the later stages of their lives.

The loans scheme allows older people who are asset rich but cash poor to access income. This is a position that a large number of older Australians find themselves in, as many find themselves having substantial financial assets in the form of a home or property ownership but without any steady cash income support. The purpose of the scheme, which was created under the Hawke government, is to enhance the living standards of senior Australians who are unable to access the age pension because they were unable to meet the income test. Whilst the Pension Loans Scheme provides an important capacity for older Australians to access an income in the later stages of their lives, in doing so, to maintain their quality of life, this program has suffered under the stewardship of the Morrison government.

There are a number of barriers that prevent Australians from accessing the program in its current form. Equity, equality of access, the complexity of the available financial products and by-products, unintended consequences of safeguards against excessive debt, interest rates and cultural issues are all factors that contribute to the relatively low uptake of the Pension Loans Scheme. Despite each of these barriers being known for a substantial period of time and becoming more pronounced throughout the nine years of this Liberal-National government, the only notable reform we've seen to the scheme in recent years was through the modest changes made by the Turnbull government in the 2018-19 budget. These changes include expanding eligibility to full-rate pensioners and self-funded retirees, increasing the maximum fortnightly payment rate under the Pension Loans Scheme from 100 to 150 per cent of the full pension and the reduction of the interest rate from 5.25 per cent to 4.5 per cent. We supported these changes as they meant that more senior Australians, including full-rate pensioners, could increase their income. These changes expanded the way in which older Australians were able to access the scheme and the amount of money available to them through it.

The bill before the House further expands the scheme. This bill introduces more financial safeguards and greater payment flexibility, allowing two annual advance lump sum payments to help participants with larger expenses. In the lead-up to the election, in 2021, the government finally gave up on one of its long-term efforts to improve the budget bottom line on the back of pensioners by reducing the interest rate to 3.5 per cent—something that has obviously been necessary for some time to bring equity to the system. However—there's always a 'however' with his government; there's always a 'but'—it has become predictable with the Morrison government that this bill and the government's effort focuses more on marketing effort than actual substance. The Pension Loans Scheme and the safeguards that our country puts in place to ensure the dignity and safety of Australians as they move through the latter stages of their lives require more than just a marketing strategy.

The Pension Loans Scheme, an important Labor legacy that is crucial for older Australians to have access to income, requires more than just a new name in order to be sufficiently reformed, and provide a benefit to older Australians that it was intended to create. However, as happens so often with this government, the needs of older Australians are not considered or legislated for beyond the PR benefit that the Morrison government can achieve through announcements. It is crucial that older Australians have the capacity to live out their lives with dignity, and with access to basic services and quality of life.

The government have repeatedly failed to fulfil this requirement, and their failure for older Australians has been even more stark throughout the course of this pandemic. A lack of care for older Australians and aged-care residents is endemic to the Morrison government. We have seen time and time again, throughout this pandemic, their sheer disregard for the lives and the wellbeing of older Australians and aged-care residents. The botched vaccine rollout for aged-care residents and staff, and the ongoing lack of support for those within the aged-care sector—through lack of PPE, lack of booster shots and lack of support for staff—send a clear message from the Morrison government that the needs of older Australians are not a priority. Throughout their time in government, particularly through the course of the pandemic, the Liberal-National coalition have failed to listen to the stories and the experiences of older Australians and their families. The coalition have failed to legislate the very real changes which are necessary in order to reform the way in which this government treat those Australians who have retired and are moving on through the later stages of their lives.

The government's failure to truly address the needs of older Australians in this country extends far beyond this bill. One of the great examples of the failure of older Australians by this government is in the current state of the aged-care system. The government wants to claim to have put forward a plan that reforms the aged-care sector; but, beyond the smoke and mirrors, the government's response to the royal commission and to the mounting criticism of the current crisis within the aged-care system does not even fall short. It fails completely.

The government's proposed policies fail to deliver the enduring forms and improvements necessary to address the crisis in the short and the long run. Labor's criticism of the Morrison government's response to the aged-care crisis is not politics. It is not about political mudslinging; it is about facts. The Morrison government have delayed or outright rejected many of the crucial recommendations that the royal commission put forth as necessary changes for the reform of this industry. Throughout the omicron wave of this pandemic, day after day, we've been hearing stories of understaffed aged-care centres, of patients being left unattended—in many cases without access to even the basic medical treatment and care—and of the overworked and exhausted staff who are doing their very best in a broken system. The government have done very little to truly address these issues facing older Australians.

In aged care, the government's plan includes none of the recommended workforce and workplace changes that the royal commission outlined as necessary aspects of addressing the growing crisis within the industry. There's nothing to improve wages for the overstretched and undervalued aged-care workers. Similarly, with regard to the Pension Loans Scheme, which is the subject of this bill, there is very little done to address the core constraints faced by Australians in accessing the pension loan scheme.

While Labor welcomes any changes that have the capacity to improve access of older Australians to a reliable income and financial security, the bill proposed by the Morrison government does not do enough to reform a fundamentally broken system which has been created under this government's watch. Older Australians face a myriad of challenges in accessing adequate care and quality of life. It is disappointing that the government has procrastinated on so many issues facing older Australians. The budget and MYEFO changes, which are the subject of this bill, come two years too late. Participants have been paying higher interest rates than almost any mortgage, a saving measure for the budget off the back of senior Australians, including full-rate pensioners. Having such high interest rates has acted as a disincentive for many older Australians to access the scheme, and Labor believes that this scheme allowing people to unlock their housing assets to improve their retirement income should be fair and easy access for all senior Australians. As I said, the government has again missed an opportunity to introduce real change.

Labor knows the government needs to address outstanding cultural barriers to see real change in the take-up rates. The Morrison government needs to do better in addressing the issues which continue to bar many Australians from accessing the Pension Loans Scheme. Many tens of thousands of Australians live in land lease communities. These Australians own their own home, but, because they do not own the land, they are unable to access the scheme. This is unfair. The government must look at this issue and make further changes and open the scheme for these Australians. There are also many known cultural barriers that inhibit some Australians from accessing the scheme, yet the Morrison government has done very little to address these issues. Older Australians will not be fooled by these well-timed changes made by the Morrison government in this bill. Although there are positive changes to the loan scheme within this bill that provide some benefit to older Australians, cutting the pension is in the Liberals' DNA.

The Liberal-National coalition have tried to cut the pension and increase the pension age to 70 in every budget, including the three budgets where the current Prime Minister had the job of Treasurer. In the 2014 budget they tried to cut pension indexation. Had they been successful with that cut, it would have meant that pensioners would have been forced to live on $80 a week less within the next two years. This unfair cut would have ripped $23 billion from the pockets of every single pensioner in this nation. In the 2014 budget the government tried to cut $1 billion from pensioner concessions—support designed to help pensioners with the cost of living. They axed the $900 seniors supplement to self-funded retirees receiving a seniors health card, and they tried to reset the deeming rates threshold—a cut that would have seen 500,000 part-pensioners made worse off.

In 2015 the government cut the pension to around 370,000 pensioners by as much as $12,000 a year by changing the assets test. In the 2016 budget they tried to cut the pension to around 190,000 pensioners as part of a plan to limit overseas travel for pensioners to six weeks. They also tried to cut pension for over 1.5 million Australians by scrapping the energy supplement for new pensioners—a supplement which actually helped pensioners keep their homes warm during winter and cool during summer. Why you would want to go and attack pensioners is beyond me, but that is the DNA of this government. The government's own figures show they would have left 563,000 Australians currently receiving a pension or allowance worse off. Over 10 years, in excess of 1.5 million pensioners would be worse off under this Liberal-National government.

If all those attempts to cut the pension and diminish the quality of life for older Australians weren't enough, the Liberal government has spent five years trying to increase the pension age to 70. Of course they waited four years before adjusting the deeming rate for age pensioners, despite the Reserve Bank continually reducing its rate at the same period. On top of all that, the Morrison government has repeatedly taken steps aimed at phasing the cashless welfare card into use for the age pension. It is an offensive and dehumanising step, further robbing older Australians of dignity in autonomy.

Older Australians need a government that truly has their best interests at heart. Spiralling out-of-pocket healthcare costs are a big concern for older Australians, because of the Medicare freeze put in place by this coalition government. Pensioners know they cannot trust Liberal governments. As I said, cutting the pension is in the DNA of the Liberal Party, and ignoring the needs of older Australians—whether that be with regard to the pension, aged care or health care—is the Liberal Party's core belief. While the modest changes to the Pension Loans Scheme contained in this bill are being accepted by Labor, they are not enough to ensure the quality of life and security of older Australians. For that, we need a government that cares more about pensioners than about marketing.

The Pension Loans Scheme is a legacy of one of the great Labor governments, and Labor's ongoing support for this legislation is a reflection of our well-established history of legislating for the interests of older Australians. Older Australians deserve respect, compassion and care. Once again, the Morrison government, in this bill, is failing to provide that for them. It has never been more clear that an Albanese Labor government is what this country needs and what Australians, especially older Australians who helped to build this country, deserve.

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

Once again I stand tonight on a very critical piece of legislation, the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021, which deals with the welfare of older Australians who are relying on the pension. We have the Labor party yet again playing games by moving a second reading amendment. They know it. The member opposite knows it. Yet they can't help themselves. There is nothing that they will not play games on.

So here, once again, we have an opportunity to debate how to make the lives of ordinary Australians, people who spent their entire working lives saving for their retirement, better, and we have the Labor party moving a second reading amendment so they can post on their stupid, silly and idiotic website run by that front group the OpenAustralia Foundation, which will no doubt say that every member of the House on this side strongly—as though I get to say, 'Mr Speaker, I'm not just voting for this but strongly voting for this'—voted against the welfare of pensioners. Let's be very clear about that. This is dishonest politics by the Labor party. These are untruths. This is misinformation. This is the sort of stuff they accuse Clive Palmer of doing day in and day out, and they do it, and they don't try to stop it. They're in this parliament enabling it.

We've seen it today already. We saw today on the front page of the Sydney Morning Herald, a newspaper not known for its support of any sensible party of government or any sensible political movement in this country, that the award-winning journalist Rob Harris has undertaken an investigation that I think Bernstein and Woodward would have been proud of, to discover that those crossbenchers who claim to be Independents and disaffected Liberals comment are fake Liberals and fake Independents but are real supporters of the Labor Party.

Opposition Members:

Opposition members interjecting—

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

I say to the members opposite: you can complain as much as you like, but one of the impacts—and I'll speak to the point of order—

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I call the member for Moreton.

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

Deputy Speaker, we are three minutes in and the member for Mackellar hasn't touched on the legislation at all. He has to at least be tangential, surely, when it comes to the piece of legislation in front of us.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Alright. Please proceed.

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

Deputy Speaker, maybe if the Labor Party stopped moving second reading amendments that basically have everything including the kitchen sink in them, I would then have to speak to the amendment, but we've had the member for McEwen speak on everything but what was in the legislation, so I don't quite—

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I call the member for Moreton.

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

Deputy Speaker, surely, if he's taking a point of order on my point of order, he should refer to my point of order.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I say yes. Please proceed.

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

Everything under the sun is in order because of your second reading amendment, so you can't have it both ways. The Labor Party can't come in here and move second reading amendments so that they can facilitate the misinformation that the OpenAustralia Foundation goes on with all the time. The member opposite can carry on as much as he likes about it but he is just as guilty of using this parliament not for debate or for actually improving the lives of pensioners but for simply playing undergraduate political games. You don't like being called out on it, but the truth is I'm going to stand here on every piece of legislation and call you out on it, because what you have been doing over the last five years is appalling and it denigrates our democracy, and frankly you all should be ashamed of yourselves. Sorry, those opposite should be ashamed of themselves, because they take votes from the crossbench, who—as we found out about this today on the front page of the Sydney Morning Herald, from the award-winning journalist Rob Harris, who has clearly undertaken months of investigation to understand this—vote 88 per cent of the time with the Labor Party and say that they're in favour of the climate, integrity and transparency.

Well, wow! Wasn't this a doozy of a day! The front page of the Herald! No doubt, this story has been there for any other news organisation to report on—the ABC, Crikey, the New Daily—but it took an intrepid reporter at the Sydney Morning Herald, which is not, as I say, a paper known for its support of right-of-centre political movements, to actually finally say: 'The hypocrisy stinks so much we are going to report on it.' And those opposite take their votes. What we found today was that those on the crossbench have been accepting donations from coal investors—not just coalmines but directors of coal companies. They are not just normal coal investors. These coal investors bought their coalmines from Eddie Obeid.

So we have both honest and untransparent. We have—

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

I raise a point of order, Mr Deputy Speaker Goodenough. We are now seven minutes into a 15-minute speech. I've given the member for Mackellar as much generosity as possible, but he has made no reference to the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021 at all. Surely he must make some reference to the legislation in front of us.

Ben Morton (Tangney, Liberal Party, Minister Assisting the Prime Minister and Cabinet) Share this | Link to this | Hansard source

Mr Deputy Speaker, the standing orders are quite clear. The opposition get one opportunity to call a point of order on relevance.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I ask the member for Mackellar to return to the substance of the bill.

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

Mr Deputy Speaker, I of course adhere to your ruling. I think that the substance of this legislation is about how to make the lives of older Australians better. That's what I think is the substance of the thing. So I'll do what those opposite want.

This debate was about the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021, but they've moved a second reading amendment, which basically means anything that the sun shines on is now allowed to be part of this debate, because that is what all their amendments are about. Their amendments are about playing undergraduate games with the future of older Australians, and I will go back to where I was rudely interrupted before, no doubt, the member for Moreton calls quorum on me, because that's their usual next tactic when they hear something they don't like hearing about, which is how they take the votes from someone who has been receiving donations from a coal investor who bought a coalmine from Eddie Obeid—who had an adverse finding in the NSW Independent Commission Against Corruption—who then split that one transaction amongst eight members of their family.

This was only discovered when a reporter from the Sydney Morning Herald, Rob Harris, had courage, because no doubt he was discouraged from writing the story, and then posted the story. That is why this government fights day in and day out to make the lives of pensioners better, and it can't do it because those opposite—

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I call the member for Macnamara.

Josh Burns (Macnamara, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, the member for Mackellar is defying your ruling right now. You called for him to return to the subject of the bill, and he has gone about as far away from it as he has ever been. I'd ask you to return him to the bill that's before us today.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I ask the member to return to the question before the chair.

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

Mr Deputy Speaker, I continue to be relevant to the second reading amendment moved by those opposite and I encourage them to stop playing their puerile undergraduate political games of moving these second reading amendments so that they can post on some puerile undergraduate misinformation website that those on this side of the House don't support pensioners. And that's the problem. That's the problem right here. That's the problem with the donations. That's the problem with their speeches. That's the problem with their tactics. They don't want to talk about what the real issues are, because they're only about misinformation, hiding things and not telling the Australian people what's really going on.

We've had speeches from those opposite—literally all of them incorrect. We've had those opposite trying to claim that this government has been trying to institute the cashless debit card for pensioners. That is untrue. They continue to repeat it online. Why do they continue to do that? Because they're part of an institutional political movement that can only win votes by misinforming the Australian people. If they want to have a genuine debate about how to make the lives of pensioners better, everyone on this side is up for it. But they want to move second reading amendments.

There are those opposite making the absurd claim that we're responsible for trying to increase the age limit for the pension. Everyone in Australia knows that Wayne Swan began that process under the Rudd-Gillard government. Somehow those opposite are trying to fit up this side of the House with it. Once again, they'll have all their little front groups out there making that claim. They might make a political point; they might get the money from the coal investors who bought their mine from Eddie Obeid, and, nine times out of 10, they might actually be able to hide that from the Australian people. But the Australian people are no fools. They know when they're not being told the truth. They know that for decades this government has been the one side of this House that has supported and enhanced the lives of ordinary Australians on the pension.

Australians know that the pension wasn't started by the Whitlam government, as those opposite assert. Australians know that it was started by the Menzies government, when it was about caring and being compassionate towards those seeking to retire. Australians know that this side of the House has consistently and constantly fought for measures that are about making those people who have spent their lives trying to make their retirement more comfortable more possible. For example, section 56(2) the Superannuation Industry (Supervision Act) 1993, which was designed to fine trustees because they had done something wrong and stop them from paying that fine out of members' funds. Let me make that clear: stealing money from ordinary Australians' retirement savings.

Last Thursday, we found out that almost a quarter of a billion dollars has been taken out of the retirement accounts of ordinary Australians by industry super funds. And why? Because, as APRA confirmed for us, Australia's largest super fund, Australian Super, was apparently one administrative error away from being insolvent. Is there no-one on that side of the House interested in the fact that $233 billion worth of retirement savings of ordinary Australians is run by a company with $12 in share capital? APRA doesn't seem interested, because of legislative changes moved by those on that side. Don't come into this chamber and try to hoodwink Australians into believing that you care about the climate when you're taking money from coalminers, that you care about honesty and integrity when you didn't declare that, and that that coal investor bought his coalmine from Eddie Obeid. Don't come into this chamber and claim that you care about Australian pensioners but that you don't actually care about the fact that the largest superannuation fund in Australia is run by a company with $12 in share capital while it manages $233 billion in retirement savings for ordinary Australians. And the reason you don't care is that they donate to your political party. Don't come into this chamber and make claims that you care about pensioners or that the cashless—

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

The member for Moreton, on a point of order?

Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

Deputy Speaker, the member for Mackellar is making outrageous accusations about you. I would ask you to ask him to come back to the legislation before the chamber.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I ask the member not to use the term 'you' in your debate, please?

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

Let's be very clear: this is a guarantee that makes the lives of ordinary hard-working Australians, who've done nothing wrong except spend their entire lives saving for their retirement, better. It gives better access, better equality, more freedom, more fairness in this society, and preserves those things that we actually care about. Those opposite don't.

Emma McBride (Dobell, Australian Labor Party, Shadow Assistant Minister for Mental Health) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021 and in support of the amendment moved by the member for Barton. There must be an election coming, and some members opposite are feeling under pressure, because this third-term government is finally taking some long-overdue action on the Pension Loans Scheme—or Home Equity Access Scheme as it will now be known. Unfortunately, once again, it appears to be too little, too late.

The Pension Loans Scheme is a legacy of the Hawke Labor government. It was intended to allow older Australians who are asset rich but cash poor to access additional income if they missed out on the full age pension because of the assets test. The Pension Loans Scheme is effectively a reverse mortgage, administered and distributed by Services Australia. The initial payments above any age pension entitlement accrue as a debt secured against real estate the person owns, such as the family home or an investment property. As with a commercial reverse mortgage, participants can stay in their family home and do not have to repay the loan while living there. The government generally recovers the debt when the property securing the loan is sold or from the person's estate after they passed away.

In the 2018-19 budget the government made changes including expanding eligibility to full-rate pensioners and self-funded retirees; increasing the maximum fortnightly payment rate under the Pension Loans Scheme from 100 per cent to 150 per cent of the full pension; and reducing the interest rate from 5.2 per cent to 4.5 per cent. Labor supported these changes as they meant more senior Australians, including full-rate pensioners, could survive in the face of the rising cost of living. The cost of living is a real concern among older Australians in the electorate that I represent on the Central Coast of New South Wales, where one in five people is aged over 65. Dobell, the northern part of the Central Coast, is home to over 22,000 people relying on the age pension for some or all of their income, and there are over 2,500 self-funded retirees holding a Commonwealth Seniors Health Card.

Under the current arrangements, a full-rate pensioner can increase their income by up to $12,580 for singles or $18,960 for couples combined per year, based on the current rates of pension. Self-funded retirees can get up to 150 per cent of the maximum age pension. This bill introduces a 'no negative equity' guarantee so participants would not pay more than the market value of their property, regardless of the debt. The bill will also allow for two lump-sum advances in any 12-month period. This will help people to meet larger expenses such as replacing a car or home improvements or renovations.

Labor supports these amendments, but more could be done so more senior Australians could benefit from this scheme. In MYEFO 2021-22 the government finally gave up one of its long-term efforts to improve the budget bottom line at the expense of older Australians; it reduced the scheme's 4.5 per cent interest rate to 3.9 per cent, a change which came at least two years too late. Participants have been paying a higher interest rate than almost every mortgagee—a savings measure for the budget off the back of senior Australians during a pandemic, including full-rate pensioners who are struggling with the rising cost of living. The high interest rate is likely to have contributed to the low uptake of the scheme. Although some four million Australians are of age-pension age—including 2.6 million age pensioners, of whom around 80 per cent are home owners—there are currently only 5,000 participants in the scheme.

Labor believes this scheme, allowing people to unlock their housing assets to improve their retirement income, should be fair and easy to access for all senior Australians. Unfortunately the government has again missed an opportunity to achieve real change and address the barriers to participating in this scheme. The government cannot claim to be giving senior Australians real choices in their retirement without addressing these known barriers. Research by the University of New South Wales has found that, where there is a low awareness or low understanding of financial products such as commercial reverse mortgages and the Pension Loans Scheme, interest in them can be improved by providing information in an easy-to-understand way. Clearly, for the government, there is much more to do here.

There are still older Australians unable to access the program despite owning property. For instance, many Australians live in land-leased communities, including many in my electorate on the New South Wales Central Coast. There are over 500 such communities in New South Wales, accommodating around 34,000 residents. These Australians own their own homes but, because they do not own the land, they are unable to access the scheme. This isn't fair. The government must examine this issue and make further changes to open the scheme for these Australians who could otherwise benefit. Of course these changes do nothing to address the very real living costs and the pressures faced by age pensioners who do not own their own homes, many of them women—the fastest-growing group of homeless in our society today.

Although these are positive changes which will assist some older Australians, Australia's age pensioners won't be fooled by this government. They know that this government is not on their side. They need only look to the bungled vaccine rollout, the problems with boosters, and RATS not being available to aged-care homes. This government has failed older Australians, especially older Australians living in the outer suburbs or the regions. Many times, they've tried to cut the pension and increase the pension age, including in three budgets when the current Prime Minister had the job of Treasurer. In the 2014 budget, they tried to cut pension indexation, which would have meant that pensioners would be forced to live on $80 a week less within the decade. This unfair cut would have ripped $23 billion from the pockets of Australian pensioners. In that budget, often known as the 'horror budget', they cut $1 billion from pensioner concessions—support designed to help pensioners with the rising cost of living.

They also axed the $900 seniors supplement to self-funded retirees receiving the Commonwealth seniors health card. As a pharmacist and as someone who worked at the local hospital in Wyong in my community for almost a decade, I know how much that support means to older Australians, especially in terms of being able to afford health care as out-of-pocket costs grow and waitlists lengthen. This government then tried to reset the deeming rate thresholds—a cut that would have seen 500,000 part-pensioners worse off.

In 2015, the Liberals did a deal with the Greens to cut the pension to around 370,000 pensioners by as much as $12,000 a year by changing the pension assets test. In the 2016 budget, they tried to cut the pension of around 190,000 pensioners as part of a plan to limit overseas travel for pensioners to six weeks. They also tried to cut the pension for over 1.5 million Australians by scrapping the energy supplement for new pensioners. The government's own figures show that this would have left over 563,000 Australians who were currently receiving a pension or allowance worse off. Over 10 years, in excess of 1.5 million pensioners would be worse off under this government.

On top of this, this third-term government spent five years trying to increase the pension age to 70 and they waited four years before adjusting the deeming rates for age pensioners, despite the Reserve Bank continually reducing its rate over the same period. The Liberals still have cuts to pensions before the parliament. They want to completely take away the pension supplement from pensioners who go overseas for more than six weeks. This could see around $120 million ripped from the pockets of pensioners, many of whom have family ties and family responsibilities outside of Australia which mean absences of longer than six weeks—for example, those caring for a loved one or a family member. The government still wants to make pensioners born overseas wait longer before qualifying for the age pension by increasing the residency requirements from 10 to 15 years.

Older Australians are worried, and why wouldn't they be? They're worried about the rising cost of living, including out-of-pocket healthcare costs. They're worried about the spiralling cost of living under this coalition government. They're worried that, if they need more assistance to stay in their home, they'll have to wait far too long to get it. They're worried that, if they need residential aged care, it will be substandard because it's underfunded and understaffed. Above all, they are worried that, if this Morrison government is re-elected, they could face another three years during which these problems just continue and grow.

In time I have left, I want to briefly turn to the subject of aged care. Frail older Australians in our community deserve better. They deserve better than this government. They deserve better than a minister who goes to the cricket for three days rather than presenting to the COVID hearings to be held to account for the deaths of over 600 older Australians who have died in aged care this year of COVID.

It was four years yesterday that I lost my dad to younger onset dementia. I know many people in this House and many people across Australia have lost a loved one slowly, piece by piece, as dementia has ravaged them. So many people have spoken to me who, through COVID, haven't been able to speak to or see a loved one. One local person told me that she could only see her mum through a screen on FaceTime and her mum tried to pass her a cup of tea through the screen because she didn't understand that they weren't in the same room. Then there was the great-grandson who was so distressed that he couldn't visit his great-grandma because he wasn't old enough to get a jab and so couldn't see her.

Senior Australians deserve better. They deserve a government that cares. There have been countless reports on aged care in Australia, including from the royal commission. An interim report is titled Neglect, and the neglect has continued under this government. What I can't forgive is this Prime Minister, who, as Treasurer, made savage cuts to aged care which have left the system underfunded and older people vulnerable and exposed. I can't forgive the Prime Minister for this and nor will I forgive the aged-care minister for going to the cricket while older Australians died alone, without someone to comfort them, without a kind word. This is not good enough. Older Australians deserve better. No frail, older Australian—someone's father, someone's mother or someone's grandfather—should die alone, lonely and afraid, in aged care.

If there is any measure of our society, it is the respect and dignity that we show to the most vulnerable in our community. Senior Australians deserve better. Older Australians deserve better. They deserve a change of government. They deserve a government that cares. They deserve a government that acts. They deserve a Labor government.

Gladys Liu (Chisholm, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. Through this bill, the Morrison government is increasing the flexibility of the Pension Loans Scheme to give our senior Australians more choices in their retirement. Australians are living more than 10 years longer than they were 50 years ago. I'm sure I speak for all in this place when I say that we want our senior Australians to enjoy the best quality of life during their retirement. One of the key factors in achieving this is financial independence. The retirement income review highlighted that accessing a portion of a pensioner's home equity can greatly improve their living standards in retirement. This is particularly true for those senior Australians who hold a substantive asset but have limited income.

For many senior Australians, the age pension is a key source of retirement income, but with housing prices increasing significantly in recent years many senior Australians have become paper millionaires with limited ability to access the benefits of their appreciating assets. For example, since 2003, the median house price in Melbourne has grown from around $280,000 to approximately $937,000. This is where the Pension Loans Scheme comes into play, giving senior Australians another option for using their accumulated wealth to support their retirement lifestyle. Participation in the Pension Loans Scheme is voluntary, and the scheme is similar to a reverse mortgage product. Like home equity release products available in the private market, the scheme enables Australians of age pension age to voluntarily unlock the equity in their home. It provides senior Australians with the option of drawing a fortnightly loan amount, backed by the equity in their home or other real estate assets, to supplement their other retirement income. Through this scheme pensioners can top up their pension payment with loan payments up to a maximum of 150 per cent of the fortnightly rate of the age pension. Eligible nonpensioners, such as self-funded retirees, can receive the full 150 per cent of the fortnightly age pension rate in loan payments. This gives senior Australians the option of staying in their own home while boosting their retirement income. Importantly, participants in the scheme have complete discretion as to how they spend their money. In 2019, the Morrison government provided access to this scheme for all Australians of age pension age, including self-funded retirees and maximum rate pensioners. We also increased the amount available as a fortnightly loan. These changes have seen a fivefold increase in take-up over the last two years, and there are currently more than 5,000 participants in the scheme.

This bill will introduce two additional features to the Pension Loans Scheme to further increase flexibility and confidence in the scheme for those senior Australians who choose to use it. These measures will come into effect on 1 July 2022. Firstly, the introduction of a no negative equity guarantee will give participants confidence they will not repay more than the equity they have in the property used to secure their loan when settling their debt. This change will make the Pension Loans Scheme a more attractive option for senior Australians in their retirement. Secondly, participants in the Pension Loans Scheme will be able to access a portion of their payment as a lump sum advance. Life often throws surprises your way. This change reflects that reality, giving retirees greater flexibility and a new mechanism to help them meet unexpected or substantial expenses.

Homeownership has been seen as the bedrock of our society. For many Australians, a place to call your own is a crucial part of what has been called the Australian dream. This bill is all about giving our senior Australians more choice and control of their retirement lifestyle. We want to give all Australians the confidence to tap into a small portion of their home equity to increase their retirement outcomes. It is estimated that around 80 per cent of senior Australians over the age of 65 are homeowners. The changes introduced with this bill will give those Australians more freedom to enjoy their retirement. It will help them to stay in their own homes throughout their golden years where they can continue to create cherished memories with friends and family. We want our senior Australians to enjoy greater choice, financial independence and quality of life in their retirement years, and so I gladly commend this bill to the house.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak on the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021. The Pension Loans Scheme, or PLS, now renamed by the government as the Home Equity Access Scheme, is meant to allow older people who are asset rich but cash poor to access an income. The intention was to enhance the living standards of our senior Australians who are unable to access the age pension because they did not meet the income test. Why, then, are the take-up rates so low? That is the question we should all be asking. Clearly there are a number of barriers that are preventing Australians from accessing the program, and these include things like equity of access, complexity of financial products, unintended consequences of safeguards against excessive debt, higher-than-average interest rates and cultural issues.

In fact, these very same concerns have been raised with me in the electorate office recently. I was contacted by a constituent, Peter. He and his wife are both retired and on a pension with a small, self managed superannuation fund. They explained that, like many Australians, they receive a fortnightly part age pension and a drawdown from their self managed super fund for the rest of their needs. The couple own their own home, which, like for so many other properties, has increased in value over the years. They inquired about the possibility of supplementing their pension income through the PLS but found the process to be difficult, overly complicated and contradictory. Again, they appear not to be alone in this.

I met with Peter to listen to his experiences and his wife's experiences, and I was shocked to hear about the conflicting advice they received from Centrelink regarding the implications of joining the scheme. My constituent explained that when a pensioner has a PLS in excess or uses funds for a purchase the asset results in a decrease in pension. The government allows the pensioner to draw down on the difference of up to 150 per cent via the PLS and then charges 4.5 per cent interest on the amount, which compounds over the years. Peter sought clarification from Centrelink about how the PLS would affect his personal pension under the current asset test but received very unclear and contradictory advice. That's just one example of the advice that's being given to people who are seeking the PLS.

Following our meeting in December, I took it upon me to write to the minister responsible to seek clarifications for my constituents about how the scheme affects the pension and asset testing and particularly about Peter's situation. The minister's response highlights that, indeed, the proceeds from the loan or any asset purchased with the loan would have an impact on the pension. But there is clearly a lack of clarity and transparency in the PLS which is dissuading people from using it. And changing the name to the Home Equity Access Scheme does very little to clear things up—it's just a name change.

It is true that the 2018-19 budget included some modest changes, including expanding eligibility to full-rate pensioners and self funded retirees, increasing the maximum fortnightly payment rate under the PLS from 100 per cent to 150 per cent of the full pension and importantly reducing the interest rate from 5.25 per cent to 4.5 per cent—a very modest reduction.

We supported these changes because, after all, they meant that more senior Australians, including full-time pensioners, could perhaps increase their income, and I welcome the fact that this bill expands the scheme even further. It introduces more financial safeguards and greater payment flexibility, allowing two advance annual lump sum payments to help participants with larger expenses. It's a testament to the people who have been vocal advocates in this area that the government finally gave in and reduced the interest rate again to 3.5 per cent.

We on this side have long fought for this measure to bring greater equity to the system, but the changes have come too late for too many. Interest rates in Australia have never been lower, yet participants in this particular scheme, the PLS, have been paying a higher interest rate than almost every mortgagor in the country. This is a similar problem to that of deeming rates, which are set much higher than standard interest rates and ultimately penalise pensioners. What kind of government makes money from pensioners? This is what's happening in this case.

On this side of the House, we believe that this scheme, which allows people to unlock their housing access to improve their retirement incomes, should be fair, easy and understandable for all senior Australians to access. Unfortunately, this government has again missed an opportunity to introduce real changes that affect the lives of pensioners for their betterment. There are still older Australians unable to access the program despite owning real property. For instance, many tens of thousands of Australians live in land lease communities. These Australians own their own homes but, because they do not own the land, they're unable to access the scheme. This is extremely unfair. The government must look at this issue, make further changes and open the scheme for these Australians.

The PLS needs to be fair, transparent and easily accessible. The government can and should do better by people like my constituent Peter and all other pensioners trying to live their retirement years in dignity. We are supporting this bill, but at the same time we want to ensure that all pensioners are supported to live in dignity. They deserve nothing less, and unfortunately this government has a very bad track record when it comes to supporting pensioners. We've become used to seeing this government try to chip away at people's age pensions, and that has been the record of this Morrison government.

Pensioners have worked very hard to receive in the course of their working lives a small pension to live in dignity. The age pension is a proud Labor legacy. It was introduced by Alfred Deakin's government under pressure from Labor to ensure that older Australians could live with dignity. Pensioners, as I've said many times in this place, have worked hard all their lives. They've contributed to our economy and our society by paying taxes, and they've built the foundations that we walk on today. They deserve respect and dignity, and they deserve a government that is on their side. Only Labor will fight for pensioners. When Labor was last in government, we increased the pension—a real increase, not CPI or cost of living and other things. It was a real increase of $30 per week.

Over the past seven years, this government has had a record on cutting pensions or trying to cut the pension time and time again. It seems like a national sport for the Liberals and Nationals to attempt to cut the pension in every budget, every year. For example, in 2014, they tried to cut pension indexation, a cut that would have meant pensioners would be forced to live on $80 a week less within 10 years. In the same year, they cut $1 billion from pensioners' concessions. Then they axed the $900 senior supplement to self-funded retirees receiving the Commonwealth seniors health card. In 2015, they did a deal with the Greens to cut pensions for around 370,000 pensioners by as much as $12,000 a year by changing the pension asset test. In 2016, they tried to cut the pension to around 190,000 other pensioners as part of a plan to limit overseas travel for pensioners to six weeks. That same year, they tried to cut the pension for over 1.5 million Australians by scrapping the energy supplement for new pensioners. The government's own figures showed this would have left over 563,000 Australians who were receiving a pension or allowance worse off than they were. And who can forget that they have spent years trying to increase the pension age to 70?

Most recently, in August last year the government was caught out by Labor on its pension freeze for 2.5 million pensions. This side of the House fought very hard to stop this cruel pension freeze. The Morrison government still has cuts to the pension before this parliament. For example, it wants to completely take away the pension supplement from pensioners who go overseas for more than six weeks. This would see around $120 million ripped from the pockets of pensioners. As I have said in this place many times, pensioners who have worked all their lives and paid their taxes have a right to live wherever they want to in retirement—whether it be overseas, whether it be moving from South Australia to Queensland, whether it be moving from Victoria to Western Australia or whether it be moving from Australia back to their ancestral home in Europe or somewhere else around the world. They have every right to do so. They've worked all their lives. They've paid their taxes. They have the right to retire in dignity and live where they want to. Yet this government still wants to make pensioners born overseas wait longer before qualifying for the age pension by increasing the residency requirement from 10 to 15 years. All this is occurring while the cost of living continues to rise, including spiralling out-of-pocket healthcare costs because of the Medicare freeze put in place by this coalition government.

Cutting the pension really is in this government's DNA. Pensioners won't forget this government's record on cutting the pension. Pensioners have worked their entire lives. Pensioners deserve dignity. They deserve to live out their last years in serenity, quiet and peace, not constantly juggling paperwork and trying to see how they can earn much-deserved retirement pension dollars in their old age.

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

It's always a pleasure to follow the member for Adelaide. I always appreciate his contributions. I just want to get him to reflect on a comment he made in his contribution around people living in properties where they own the house but lease the land. Many of those people who live in that situation, who receive the age pension, also potentially receive some form of rent assistance. If you change that system it might affect their ability to receive rent assistance, and that might be a greater detriment to their income than amendments to the Pension Loans Scheme. As with any of these things, whilst I understand the point the member for Adelaide was trying to make, we should always be cognisant of the potential flow-on effects by considering the full picture, not just a particular issue.

In my time prior to this place, as many would know, I spent a long time in banking and financial services. Frequently I spoke to clients about reverse mortgages; it was always a point of discussion because they were looking to find ways to access the equity in their home. Despite the fact that the Pension Loans Scheme, in its various forms, has been around since approximately 1985, there have been a variety of changes to the scheme over the years to try and make it more attractive and open it up to more people. In that time from 1985 to now, we're in a situation where only about 5,000 or so people access the Pension Loans Scheme.

This bill, the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021, is important for a number of reasons. Importantly it's about improving the flexibility of the Pension Loans Scheme and giving the opportunity for more senior Australians to have options on drawing on the equity in their home or on other real estate assets to improve their living standards in retirement. As the member for Adelaide and others in this debate have quite rightly pointed out, we have the privilege of being in this place. But we have this privilege because of the people who have gone before us. We should recognise the efforts of those people who have worked hard all their lives—they've saved and they've contributed to building our nation as it is today—and always work towards ensuring they have adequate incomes in retirement.

There are those, we recognise, who have had the opportunity to have very significant and adequate resources for retirement. Many of those people lived and worked in an age, particularly if they worked for large corporates or if they worked for the public sector, when they received defined benefit pensions. Those on designed benefit pensions, particularly larger ones, don't face the difficulties of the risk of the variability of superannuation returns that many newer retirees face. Many others had various forms of fixed or annuitised pension income, which gives them a level of certainty on the income that they receive each and every month or over the course of a year.

But, as we know, one of the great risks with retirement income is that, your income stream—whether it be from an allocated pension, the dividends from a share portfolio, rental income from an investment property, or income other pension sources—generally, in most cases, is sufficient to cover your day-to-day living expenses, but, if you're going to live for 20 or 30 years after retirement, you're going to have some other major expenses. You might need to purchase a new car. You might need to upgrade your appliances at home. You might need to do some renovations. Sadly, your health might deteriorate, and you might need to do some renovations to improve safety measures around, or access to, your house. Not having something like a pension loans scheme where you can access a capital amount to do these things will impact on the pool of investments you have with which to generate an income.

We have long talked about the adequacy of retirement incomes in Australia. Whilst I think this is a good step in helping and improving that flexibility, I think much more work needs to be done on the entire retirement income ecosystem to ensure that it's fit for purpose in the 21st century, and I would hope that the next parliament takes up that opportunity to do some more work in that space.

As I look at this new bill, one of the important features—which is lacking in some of the products that are available out in the marketplace, although I do note, since 2012, this issue has largely been taken care of in those products as well—is the introduction of a 'no negative equity' guarantee to all scheme participants from 1 July 2022. The guarantee will mean that, when scheme participants settle their debt, they will not repay more than the equity in the property used to secure their loan. This measure is designed purely to enhance the safeguards currently in place and ensure that the conservative age based loan to valuation ratios minimise the possibility of a participant's debt exceeding the equity in their secured property. I think that's critically important.

One of the reasons those changes were made in 2012 by those opposite when they were last in government is that, during the 2000s when reverse mortgages were a very popular product out in the marketplace, we saw that, when things went bad with the GFC, people were left in a position of negative equity position in their homes. Equally, even in the ordinary course of events, they could have been left with a negative equity position because of the effect of compounding interest on the debt that was initially taken out. That means that, if you exceed the equity in the house and you have that negative debt, that money has to come out of other assets. So this is a very important and key provision of this bill that brings it into line with what's been done more generally in the marketplace since 2012.

Equally, from 1 July 2022, participants in the scheme will be able to access up to two capped payments in any 26-fortnight period. Participants of the scheme will be able to access a portion of their payment as a lump sum. This will give retirees a new mechanism and greater flexibility to meet unexpected costs and substantial expenses, as I outlined earlier. The maximum lump sum advance is capped at 50 per cent of the maximum fortnightly rate of the age pension over the following 12 months. Based on current age pension rates, the maximum advanced payment could be around $12,580 for singles and around $18,960 for couples combined. The participants will be able to take up to two advances in any 26 fortnight period with the combined total limited to a 50 per cent cap. Any advance taken will reduce the amount of the fortnightly Pension Loans Scheme payment received by the participant, and the amount the participant will receive will generally be the same regardless of whether they take an advanced payment, fortnightly payments or a combination of both. So the value of that flexibility is they can adjust what they wish to do to best meet their circumstances, and that's what the objective of this bill is—that people can make their own informed decisions based on their own individual circumstances. Importantly, this will also protect participants from building excessive debt balances while providing them flexibility on how they can draw down on their equity and their assets for self-support.

Why are these changes necessary? Well, as we've seen over the past many years, Australians are now living up to 10 years longer than they were 50 years ago. As I said earlier, we want to see our senior Australians enjoying the best quality of life during their retirement. The key factor to achieving this, above all else, is financial security and independence. For many senior Australians the age pension is a key source of retirement income, but with housing prices increasing significantly over recent years we've also seen many senior Australians become asset rich and cash-flow poor. These changes open up the flexibility and the opportunity for many Australians to access that asset and create a cash flow for themselves that is going to improve their cash flows and their quality of life. That's what the Pension Loans Scheme is designed to do—and that is, in fairness, really what it has been designed to do since its introduction in 1985.

As I said, there are many other of these types of products in the private marketplace, but their interest rates are higher and their fees and charges are higher, so there is an attractive proposition in what the government is offering to Australian pensioners. Importantly, people have the opportunity to make their own decisions, and we would always encourage people to get sound financial advice to assess their situation and the suitability of this or any other type of product. The changes introduced with this bill will give older Australians more freedom to enjoy their retirement, and that's what we want to see. As I've seen regularly across my electorate in talking to those who are now retired, whilst previously they wanted to go on trips overseas—and many have even recently said to me they want to go back to cruising, because that's one of their great joys: to have a cruise maybe several times a year—equally many are buying caravans and travelling around Australia, enjoying our great continent. These changes provide the opportunity for them to have the cash flow and the access to equity in their home to do those things. But, importantly, it allows them to stay in their home. It doesn't involve them selling down their home to access that equity to do those things, unless they so decide to do that from a lifestyle perspective.

We know that homeownership in Australia has been a bedrock of our society. It is your home. It's more than a place simply to live. It's a place where you've spent many, many years enjoying being surrounded by your family and your friends in your community. It is critically important, therefore, that we support our senior Australians in their retirement to enjoy it to the extent that they wish. I believe that by giving them flexibility through our Pension Loans Scheme to stay in their own home and access that equity for the benefit of their retirement to spend as they wish and to tap into, if they require, for emergency expenses is just another example of this government continuing to deliver for all Australians right across the country. I commend the bill to the House.

Debate interrupted.