Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Hansard source

I will briefly respond to Senator Xenophon. Thank you for advising that you will be withdrawing your amendments in relation to indexation. I think you had left the chamber when we had discussion in the committee stage about the indexation issues. I reiterate our concern about increasing the thresholds, although we have gone beyond that now. It is critical that we do not do this kind of work in isolation. The notion of increasing the thresholds has implications for the intersection between the taxation and social security systems, and other decisions that are made in that space. So we are trying to get a consistent approach to thresholds, income levels and taxation treatments.

When the measure was originally introduced in 1994, it was indexed. It was the Howard government’s changes in 1999 that ceased the indexation and created an ad hoc system from that time, which is what is in place. The Harmer review is a systemic review and a comprehensive reform of the pension system and we will be looking to many of those issues. This measure before us today was about closing the loophole and acting to create a level playing field in the system. I am disappointed that you cannot support the bill as it stands, but I want you to know that we do not want to continue in the same vein as the previous government with ad hockery around what is such important legislation.