Rachel Siewert (WA, Australian Greens) Share this | Hansard source

I rise to make a contribution to the debate on the Social Services and Other Legislation Amendment (Seniors Supplement Cessation) Bill 2014. Under this bill, as Senator Moore has just pointed out, the seniors supplement will be abolished for holders of a Commonwealth seniors health card and the Veterans' Affairs gold card. The Greens will not be supporting this bill. I will say that again, just in case anybody is in any doubt. The Greens will not be supporting this bill.

We need to remember the context in which this measure has been brought into this place. That is the government's harsh and cruel budget that means that the most vulnerable members of our community will be the most significantly hit by the cuts that are being made. We have discussed the cuts on numerous occasions in this place as part of the aborted debate on the social services bills Nos 1 and 2 and in other discussions. The measure in this bill was originally part of the government's social services bills Nos 1 and 2, which it was not able to get through this place. It is now part of that tranche of bills Nos 4, 5 and 6 that the government subsequently brought in.

Those bills contain some of the most significant changes to Australia's system of income support since the system was first introduced in a consolidated social security act in the 1940s. These are radical changes, bearing in mind that one of the measures in the other bills is to kick young people under the age of 30 off Newstart and income support for six months. They will hit most significantly the most disadvantaged members of our community. The government knows that because the government modelled that. It was using virtually the same model that NATSEM used to model the changes, and NATSEM's modelling clearly shows the impact of those measures.

The government may be prepared to start picking apart our social security system in an ad hoc manner, but we are not prepared to do that. This measure must be assessed in the broader context of the budget cuts to the social security system, of other measures in the budget that are not specifically related to the income support system and of other changes that have been flagged into the future. All of them have the potential to affect older Australians. Older Australians currently face many challenges. Policy changes in this area can have a significant effect if not done carefully, particularly if done on an ad hoc basis and not considered in the context of other changes.

The proposed budget measures contained in the various proposals that have either been before this chamber or are coming before this chamber have interactions with each other and have the potential to impact on older Australians. Some of the challenges facing older Australians include changes to the age pension, affecting age pensioners, retirees and people in their 50s and 60s who unfortunately have not been able to regain work after having to leave paid work or being forced out due to redundancies, restructuring of industries et cetera. The federal budget makes it tougher to survive if you are in difficult circumstances. The government plans to save money through this cut, through abolishing this concession for older Australians. We could suggest a number of ways that government could save money rather than by cutting a concession that is important to many older Australians.

We need to look at these cuts in the face of some of the other changes the government is planning to make either immediately through the budget or into the future. For example, the government wants to raise the retirement age of Australians from 67 to 70. The government promised it would not do anything with the pension, but in fact it is doing so. You need to look at the context in which that change is being made—that is, we have a large number of older Australians who are not able to find work after they have fallen out of work. Older Australians are people over 45—when all of a sudden, when it comes to employment, you are old. On the other hand, you are young when you are 30. Under the government's proposals you will be dumped from income support when you are young, at 30; but, in the employment sense, you are old at 45.

The statistics clearly show that it is becoming much harder for older Australians to regain work. While there has been some success—it was in the paper today—with the Restart program, with I think 485 people managing to find work through that process, you have to remember that that is in the context of over 200,000 people over the age of 45 not being able to find work. That is the size of the situation we are dealing with. We do not yet have adequate provisions in place to help those people who will potentially be stuck on Newstart or in untenable situations before they reach the retirement age of 70. In other words, we still do not have that policy process right.

The government also wants to change indexation of the pension. That will significantly impact on older Australians. The government is also freezing the indexation of the age pension income and assets test, which makes it harder to qualify for the pension. Those are all proposals that have either passed or are being considered by this government. Again, this is in the context of the people who need this sort of support if they do not get the age pension and only just miss out.

Then there are the reviews that are occurring under this government, including the McClure report, which contains substantive proposals to change our income support system. We have not yet seen the McClure report proposals. We are being asked to consider this particular change without seeing what McClure proposes in terms of changing the income support system. We also have the National Commission of Audit proposals, which made significant comments around the age pension and retirement income. For example, they talk about what should be in and what should the out of the assets test. Certainly there will be significant changes there. They also talk about changes to means testing and to the retirement age. All of those proposals impact on what may or may not be happening with regard to how we look after and support older Australians.

A further budget proposal is for co-payments, and there has been a lot of concern expressed to my office around those changes. Another change—to be fair, it was not this government that introduced it—is the reform to the aged-care system. I am not saying that we supported that; in fact we negotiated a number of changes. When the government were in opposition they were involved in a lot of discussions over those changes. The government is now implementing the Living Longer Living Better proposals. Those reforms to aged-care are just starting to be implemented, with the first tranche having started in July and the next tranche starting in July next year. All of these changes have significant implications for older Australians. The government is in the process of planning those changes now. There are changes to both residential care and out-of-home care, some of which involve a cost, and that was acknowledged in this place. That is another change that older Australians are planning for and coming to terms with. So there is a lot of change already going on, and the government wants to make some more.

Given that this government is very clearly looking at further changes to our system of income support, it is not surprising that older Australians are extremely concerned about their financial future. In that context, you also need to remember that we have an increased cost of living and that there are changes being made at a state level. So prices are going up and concessions are changing across states, and that is putting further pressure on older Australians.

For these reasons, we will not be supporting this measure. But we do support the Council on the Ageing's recommendation to the Senate committee inquiry into the social services bills Nos 1 and 2. The Community Affairs Legislation Committee looked at the changes in those bills and in the wider series of bills, some of which have gone through this place and some of which are still to come into this place. COTA's recommendation to the inquiry still holds. They very strongly recommend that there be a review into retirement income. They said:

We believe Age Pension change should not be dealt with in isolation. There needs to be a systematic review of all aspects of retirement incomes that involves all key stakeholders and takes into account any changes that emerge from the Government’s reviews of the financial system and taxation. Retirement income changes have a long term impact on individuals, the Government’s budget and the broader community and this would be an opportunity to get it right.

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We believe that the CSHC should be included in the proposed retirement income review and that there should be a discussion about its purpose and place within the retirement income sphere. Current eligibility and benefits for the card should remain as they are until that review has been completed. This would mean continuing CSHC entitlement to the Seniors Supplement.

This is the peak body for older Australians and they are saying that we need to have a retirement review. We agree: there does need to be a retirement income review because there have been a lot of changes. Mr Ian Yates from COTA has also talked about this. He pointed out the financial changes that are occurring. Of course, he is right: they also need to be included. COTA believe that there needs to be a broad ranging retirement income review and, as I said, the process should involve consultation with key stakeholders. The review should be done in a timely matter and, if it were completed by late 2015, COTA say it could feed into the 2016 budget.

They went on to say:

COTA believes it would be useful to set up a structured process of roundtable discussions involving key stakeholders to look at varied policy options and their social and economic impacts. Such a process would need to be well informed and evidence based.

They suggest the review could look at the current indexation arrangements, proposed cuts to the aged-care system, employment of older people, deeming thresholds—that is another point that I have not touched on before, and those changes are very important—income and asset levels used for means testing, as to whether they are an unfair and inadequate response to age-pension income, and also other asset test issues. They will also look at the objectives and benefits of the CSHC. Those are all very valid points and it is clearly time, given all those things that I have just mentioned, that we have that review. This sort of cut—an ad hoc cut—should not be considered, we believe, until a review has been done and we have a clear picture of what is going on.

Older Australians are under increasing pressure. We have a narrative at the moment that we will have a burden with the growing number of older Australians. That helps to facilitate some of the discrimination that older Australians are currently facing, trying to find work and trying to ensure that they have adequate income. Older Australians are facing many cost pressures. As Senator Moore pointed out, it is being carefully planned into people's budget in the run-up to Christmas and into the future, and we do not believe the cuts are appropriate.

The government want to look at how they can make some money. How about looking at some of the reforms that could be made—for example, around superannuation tax sessions? The cost of superannuation tax concessions in 2014-15 is projected to rise to $39.6 billion and over $50 billion in the following year. If we are going to do reform, let's look at where some of that investment is incurring and whether it is focused in the right way. Are we getting value for money for that form of investment? Do not look at the low end of where the concessions are; look at where some of the big bucks are and question whether that is being invested wisely. Look at those issues. That is something that definitely needs to be looked at in the retirement income review.

OECD figures show that poverty amongst Australians aged over 65 is currently already 35 per cent, and there are concerns that this will increase in the face of changes to indexation, the retirement age and other budget measures. We should be looking at how we support older Australians as they age, as they reach retirement age and as they pass retirement age. We strongly support the call for a retirement income review and urge the government to relook at this issue and put in place a review that involves all stakeholders and takes a systematic approach to how we support older Australians.