Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I rise tonight to oppose the so-called Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015—a title which George Orwell would be quite proud of. Tonight's bill is brought to the chamber courtesy of broken promises and a grubby deal with another political party. The broken promises are legion with this government. We know that in the lead-up to the last election the current Prime Minister promised on nine separate occasions that there would be no changes to the pension. One would have thought that the people of Australia could have taken him at his word, given that he repeated that promise on nine separate occasions. But, no, the Prime Minister cannot be trusted on this particular issue.

The Greens political party is complicit in this exercise. It is quite an appalling breach of trust on the part of the Greens in this area. I understand that the coalition and the Greens have joined forces to shut down a Senate inquiry nearly two months before it was due to report, and that this report would have allowed proper scrutiny of the Abbott government's cuts to the pension. The Greens and the government have teamed up to sell out pensioners. As these changes are not due to come into effect until 2017, it is interesting that the government and the Greens are so afraid to have their pension cuts properly scrutinised.

It appears that the Greens are implicitly agreeing that the pension system is unsustainable, and we know that that is not the case. We know that Australia is considered to have one of the most sustainable pensions in the world. The Allianz Pension Sustainability Index last year found that Australia's pension system is the most sustainable in the world. According to the OECD Australia spends just 3½ per cent of GDP on the age pension, compared with the OECD average of 7.8 per cent. Ensuring the continued sustainability of retirement income is important, but it has to be done in a fair and equitable way, and it would appear to me that the Greens have been sold a pup, with all due respect to the member for Fairfax. We know that while the increase in the assets test free area ameliorates the impact of the doubling in the taper rate, it will not universally deliver increased pension payments for those with modest levels of assets, due to the dual means test. I know senators have spoken about this particular issue before I have. Here I paraphrase a supplementary submission given by Industry Super Australia to the Senate Community Affairs Committee, where they say that pensioners with assessable assets exceeding $1 million are not the target of this measure, as they constitute only five per cent of the losers. So in fact 95 per cent of those affected have assets of less than this, including those with assets of as little as $300,000. The Industry Super Australia analysis goes on to reveal that by 2055 the measure will reduce the retirement incomes of 50 per cent of single females—none of whom will attain a comfortable retirement, thanks to the Greens. It will also reduce the retirement incomes of 50 per cent of single males—none of whom will attain a comfortable retirement, once again thanks to the Greens. And it will reduce the retirement incomes of 10 per cent of couples—none of whom will attain a comfortable retirement, once again thanks to the Greens.

The increase in the assets test free area has been proposed, as I say, to ameliorate the impact of the harsher assets test taper, and this is supposed to argue that there is an increase in the overall fairness of the measure, because it will lead to some modest increases for those modest levels of assets. The Industry Super Australia modelling shows that this will be the case for some pensioners, but the outcomes will vary significantly. Some pensioners with low levels of assets will not obtain any increase. There have been claims made that all part pensioners with assets below the new threshold will be better off, and Industry Super Australia's modelling suggests that that is incorrect. They say that looking at the dual means test leads to the conclusion that the claims have been overstated, with the cameo tables being presented potentially providing a misleading picture as to the effects of it.

Returning to the government's proposition, when Mr Abbott told pensioners there would be no change to pensions they took him at his word, as I said earlier. But it would appear that pensioners are public enemy No. 1 for this government, which is ably aided and abetted by the Greens. We know that last year the government sought to hit 3½ million pensioners in one of the most savage attacks on Australian pensioners in living memory. The plan to cut indexation would have seen every single pensioner in the country left worse off. Within 10 years this cut would have amounted to $80 a week. We would have seen a massive $23 billion ripped out of the pockets of Australian pensioners. That was a broken promise and it would have pushed pensioners into poverty and hardship.

The Prime Minister has resiled from that position, but that is only thanks to Labor's staunch opposition to those changes from last year. This time, he still wants to rip $2.4 billion from the pockets of pensioners. This is reprehensible. We know that, regrettably, under the current tax and transfer policy settings that we have in this country many Australians will retire on incomes below a comfortable standard. According to the modelling by Industry Super Australia and Rice Warner that I referred to earlier, we know that Australia has a world-class superannuation system but it is not matured to the level that we would all like. That means, according to this modelling, that about half of all Australians retiring from now through until 2055 will not achieve a comfortable retirement taking into account the age pension, superannuation income and income from wealth outside super.

And the current system is failing single women especially, as referred to earlier. Over two-thirds of single women aged 55 to 69 will retire on incomes below a couple standard. And we know that even younger women face a difficult future. More than half of women currently aged 25 to 29 will retire on incomes below a comfortable standard. That is the current situation and it is less than ideal. But the measures that are before us tonight will make the system even less fair than it currently is. The modelling I have referred to shows that the changes will initially have a relatively small impact on existing pensioners but the proportion of new retirees affected by the proposed changes will increase significantly over time and over 40 per cent of retired Australians will be adversely affected by the proposed age pension cuts by 2055, according to the Rice Warner modelling.

The report goes on to say that the proposed changes in the taper rate will amount to a 15 per cent overall cut in the retirement of some people who are on incomes below a comfortable standard, while people on higher incomes are largely unaffected. Women are especially harmed by the proposed changes. Under the proposal, eight in 10 single women retiring in 2055 will do so on incomes below that needed for a comfortable living standard, an increase of 30 per cent. The bill's negative effects on single women, according to the Rice Warner modelling, will hit those on fairly modest incomes. Women aged 55 to 59 will be affected from earnings above $46,220, women aged 45 to 49 will be affected from earnings above $40,568 and those aged 25 to 29 will be affected from earnings above $23,954. These are dramatic impact on those who can least afford the changes. This is what the bill does.

As Labor senators speaking before me tonight have commented, this bill is a cut to the pension for 330,000 pensioners. One wonders why this government seeks to target pensioners so repeatedly. Some single pensioners will be $8,000 worse off because of this. A single person who owns their own home and earns less than $25,000 in income will lose $8,200. A couple who own their own home and together draw down $45,000 from super and other earnings will lose around $11,400. That is this government putting its hand in the pockets of this particular group and taking $1 of every $5 from them. How is this fair, and how is it that the Greens could be so naive to agree to changes which are going to be so detrimental to Australians? Pensioners know that, if this bill is passed, not only will the Prime Minister's hand be in their pockets to take away their income; they will find in their pockets also the hands of the leadership of the Greens, who are so complicit in allowing this all to occur.

According to the government, 236,000 pensioners will on average be $130 a fortnight worse off. As my colleague Senator Carol Brown indicated earlier, that is $3,380 a year. And we know that 91,000 pensioners will lose their pension altogether. This will on average leave them $190 a fortnight, or $4,940 a year, worse off. We know that this measure might spare some pensioners the pain of last year, but it will still have very serious negative impacts for pensioners. According to independent analysis, within 10 years half of all new retirees leaving the workforce will be impacted by this measure.

As I said earlier, the government would have us believe—and it would appear that the Greens have tumbled into the mythology—that all of the pensioners who are affected are millionaires. We know that this is absolute rubbish—and I have been through those figures. Let us make no mistake about this, it is an attack on middle Australia. The independent modelling indicates that, over the long run, the largest impacts will be felt by people currently earning below-average incomes. This government is happy to put its hand in the pockets of pensioners and take thousands of dollars a year from them. At the same time, they refuse to have a sensible look at the issue of millionaire superannuants. We know that Labor has put forward a sensible and fair proposal, and we know that that has been costed at around $14 billion, so it is not fair to say that Labor opposes all measures to address the budget deficit. This is a government that wants to leave the millionaire superannuants unscathed and to take thousands of dollars off pensioners who can least afford it. In the process, they would rather double the deficit to $35 billion.

This shows that the government do not get fairness, and they do not get fiscal rectitude. They still do not get that, when you make a promise, you are supposed to keep it. Labor will be holding this government to their promises. That is what good oppositions do. Labor will fight this measure. We will stand with pensioners once again, and we will take this fight to the election. Tony Abbott lied to the Australian people: he said there would be no changes to pensions. He cannot be trusted—we know that. The reality is that Tony Abbott wants to cut the pension. He wants to take money from pensioners while protecting wealthy Australians. It is wrong. Only Labor will fight for the pension.