Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice asked today.

In my particular case I refer to the responses by Senator Sherry, who is responsible for the Australian superannuation system. Senator Sherry’s responses show a government that is simply not equipped to understand or to deal with the great global financial challenges in world markets and the impact these will have on Australia. This government of hollow men and women appears blissfully unaware of the dangers to the Australian economy flowing from the events in international capital markets.

Senator Sherry gave a rambling answer to a dorothy dixer yesterday from Senator Collins on challenges being faced by the US financial markets. He said in answer to an interjection from me that he would address the exposure of Australian super funds in his answer but he failed to do so—and he failed to answer my question today. In fact, all he could do was to point to the undeniable fact that Australia is in a stronger position than most to weather the storm and that the regulators are working hard and doing what they can to minimise the impact on policyholders. He pointed to the fact that superannuation is a long-term saving. Of course this is true, but it will be cold comfort to all Australians who are on the verge of retirement. Already, figures show superannuation funds lost in the vicinity of 11 per cent in the last few months and obviously more in the last few days due to volatility on the share market.

The impact on superannuation particularly affects those who plan to retire this year or possibly next year. It may require them to stay in the workforce—that is, of course, if they continue to have an available job—or to go on the pension or a part pension. It may require self-funded retirees to resort to going on the pension or a part pension. Heaven help any elderly Australian who has to rely on this government when it comes to the pension. Heaven help them, I say, because this Rudd Labor government will not.

We have all seen on display day after day the contempt that this government has for age pensioners. This is a government, from the Prime Minister down, that sends its ministers out day after day to say that they could not live on the age pension. They freely acknowledge that they could not live on the single pension. Mr Deputy President, when you think about this for a moment, just think of the cheek of this. These are senior ministers who acknowledge how bad it is for age pensioners but who do nothing to fix it. What sort of government, from its senior team down, admits there is a severe financial impact on the capacity of thousands of vulnerable Australians to meet the bare necessities of life and yet does nothing about it?

There has been a massive rise in prices over the past 12 months since the last coalition budget—in fact, a very substantial increase in prices across the board—and, as we have seen, the Rudd Labor government has proven incapable of doing anything to keep a lid on prices, to keep downward pressure on prices. But of course what it can do and what it refuses to do is to help our pensioners with something to tide them over.

My proposition to the Senate and particularly to those opposite is: let’s act now. Let’s give $30 a week to single age pensioners. We can do this right now. It does not prejudice a review, it does not stop us from doing other things. We can act right now, and any decent government should. If you cannot even manage the economy to provide for a decent pension, you certainly cannot manage the broader economy. We are paying the price for having a nervous and incompetent Treasurer, Mr Swan. We are paying the price for a do-nothing government. Business and consumer confidence is plummeting.

The Australian people have been seriously misled. They have elected a government that has no confidence in Australia’s economy nor the experience to manage it, and certainly no compassion for age pensioners. What we have are endless focus group slogans and ultimately a government that will stand guilty of doing nothing, not having leadership and having no ideas on how to manage the economy at a time of peril. (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Once again I should say how wonderful it is that the coalition have discovered that there are people in their electorates who are finding it very difficult to make ends meet. I should remind coalition senators that a central plank of the Labor campaign in the last election was that the Howard government at that time were just simply not aware of the difficulties people were having in making ends meet—that people were doing it tough and that prices were rising.

We campaigned on the idea that the Howard government was out of touch, that they did not recognise that fundamental fact, and I think the election result showed that the Australian people agreed with us that the Howard government was out of touch and was not aware of what was going on around the kitchen table. And now, having been in opposition for a few months, the coalition are starting to become aware that that was one of the root causes of their downfall. I presume they are trying to rectify that position by calling for this $30 a week pension rise, ignoring the very complexities of existence for pensioners who, if they got a rise in their base pension, would have all kinds of difficulties and might not get the full benefit of that pension because of rate rises in the housing commission properties or whatever.

We have seen the coalition do their usual knee-jerk reaction and propose something without thinking through the consequences, without thinking about how that is really going to be implemented in the real world, because they are still not really part of the real world. They just want to put forward a stunt that sounds good, that will make them look good and that may cause that tiny increase in the polls they so much need at the moment. They accuse the Rudd government of being poll driven and yet they pull a stunt like this, the $30 a week, which we have yet to see in this chamber or the other chamber. It was an ill-thought-out stunt that was not possible to do in the other place, so now they have proposed to bring in a bill in the Senate but have not yet been able to do it and have not shown the kind of follow-through that the stunt really does not deserve in the first place.

Senator Coonan came into this place and accused the Rudd government of being a do-nothing government, which is breathtaking. It is really hard to sit here and hear this when the coalition was in government for nearly 12 years and did nothing about the base rates of pensions. The Rudd government has been in power for less than a year and they ask the Rudd government, before a proper policy and implementation review is finished, to rush in and do something which may have unintended consequences. The fundamental fact arising out of this is that in order to bring about any kind of increase for pensioners the Rudd government needs the budget to do it. One by one, members of the coalition have voted against the very budget measures that would give us the kind of surplus that would allow us to do something significant for pensioners and they have refused to budge from that position. They have refused to acknowledge the irresponsibility of their actions in voting against those budget measures. You cannot call on the Rudd government to spend large amounts—millions and billions of dollars—if you do not give the government the revenue capacity to implement that.

In this chamber, time after time, day after day, we see the coalition voting against the very measures that would enable the Rudd government to give a substantial increase in pensions which is needed not only for single age pensioners but also for a range of other people on government allowances and benefits. We are looking across the sector to implement something that will have a long-lasting, long-term, good result which will be effective and important for pensioners. (Time expired)

John Williams (NSW, National Party) Share this | Link to this | Hansard source

As you are well aware, Mr Deputy President, I am very new to this chamber and it is a learning experience. I look at questions today and the good question asked by my friend Senator Coonan in relation to the effect on our superannuation funds of these serious problems in world financial markets—brought about because of ridiculous lending by those in the housing markets et cetera in the United States lending up to 110 or 120 per cent equity. Now the fallout is on, and we must ask the question, ‘Whatever happened to regulation and financial institutions?’ We went through all this in the late eighties and early nineties when the ridiculous lending was on and the big fallout came with high interest rates, people going broke and people losing their jobs.

I remember it well under the then so-called world’s greatest treasurer, Treasurer Keating, who then became Prime Minister. I mentioned last Monday in my maiden speech to this parliament the 25.25 per cent interest rate I was billed. I have a little chuckle when many in the house refer to interest rates going up and how we have had eight interest rate rises in the last four years or so of a quarter of a per cent each time, making a total of two per cent. If my memory serves me right—and I have not checked the facts—I recall that in about November 1987 we had a two per cent interest rate rise in one day. I must check it. I am pretty sure I am right.

To get on to the management of the economy and where we are heading, there is no question that the economy is slowing. I live in rural Australia and we have had seven years of drought. Hopefully the rain that has come along in the last few weeks will continue and we will see some returns to some good incomes into those rural communities, which is desperately needed. But the point I make is the economy is slowing, and we saw it just a couple of weeks ago in the reduction in interest rates. Yet the government consistently want to keep a firm handle on this fiscal policy, their budget policy. That will only cause more harm. There are reasons why they should not hold that break so tight, because we run the risk of the economy slowing too much, and we have already seen the forecasts in the budget of higher unemployment, people losing their jobs and people losing their livelihoods.

How we are going is a worry for the future, and then we get on to the talk of pensions. I was doing some figures the other day. If we were to give an immediate $300 catch-up payment to our pensioners and carers, I believe the figure would be about $840 million. If it were to come along with that $30 a week rise for our single pensions, you would have a total expenditure of around $2 billion. That would do a lot of good promoting some economic activity, especially in the country and coastal areas where things are very slow. It is quite alarming when I get emails from people just in Canberra saying, ‘What is happening to our economy?’ They are losing confidence, their businesses are quietening and the fact that they are losing sales is putting people off. I say this in all seriousness: there are tough times coming and the government must address these issues. If it means spending a little of their surplus I support that, especially in rural communities where we have had tough times for seven years with drought.

Prior to that, in the late eighties and early nineties, we were paying huge interest rates—many businesses were paying in excess of 20 per cent. When the good government came along in 1996 and took the budget to where it is supposed to be—into surplus—and interest rates went down, we unfortunately had times of drought, such as in 1994. Then in 2002 we had the crash of the wool market. That is why rural communities have not recovered anywhere nearly as much during those low interest rate times of the good previous government and hence things are still tight today. So I encourage the government to show some compassion and look at what is actually happening in our economy. There is no need to tell us, as Senator Evans did today, that they ‘built a strong surplus’. They inherited a strong surplus. It was the previous government that built the strong surplus. These people with a chequebook in government can now show some compassion and look after the elderly, who have done so much for our nation, and give them a payout to help them through these tough times. (Time expired)

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Williams made some very good points in his first take note speech in this chamber. The first is to remind us of the tough times that are ahead for us, and the second is to invite us to show compassion to people who are finding it very tough living on pensions. But, in reflecting on those two issues, I have to correct the record. I have to address some of the comments that Senator Coonan made in her contribution today because they are simply not true. She suggests that the Rudd government has done nothing in this area. I invite anyone to look back at the budget and at the $900 increase that was delivered through the budget for people suffering in these times and under circumstances related to the pension. As has been indicated on several occasions, the utilities allowance was increased to $500 and the $500 bonus was paid through those measures. So when Senator Coonan says, ‘Heaven help age pensioners,’ we should reflect on how those initiatives compare with what occurred under the Howard government.

One would believe from a lot of the rhetoric coming from the other side that the Howard government have a reasonably responsible history in this area. This is clearly not the case. I will come in a moment to their backflips and stunts in recent months in this area, but let us look at the period of the 12 years of the Howard government—the Howard government that introduced the GST and had to be drawn kicking and fighting to a one per cent increase in base pension arrangements as compensation for the GST. So, yes, pensioners are doing it tough and, yes, their plight is related to current economic circumstances, but it is also related to a 12-year period of neglect under the Howard government.

This brings me now to recent stunts—and I think that is really the only way to describe the way the opposition’s leadership has dealt with this issue in recent months. Back in May we had the shadow minister, Margaret May, suggest that a base increase in the pension would occur. We then had the leader, Brendan Nelson, immediately deny that that was opposition policy.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

A flip-flop.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

An immediate flip-flop, Senator Sterle. And yet, several months later, we do have it as policy. I wonder what we will have tomorrow when Mr Turnbull, the new leader, decides what he is going to do in this area. What I worry about in the interim, though, is the quality of the opposition in comprehending the complex issues that are involved here. If we have, as we did yesterday, the spokesperson in this chamber, Senator Bernardi, addressing the issue, you would think that all it related to was parliamentary catering. You see no substance in what he offers this chamber or indeed what the opposition generally is offering to this debate—no substance but a very simplistic stunt to suggest that a $30 increase would be appropriate. Well, we know from the pensioners that a $30 increase is often going to be almost immediately absorbed into the other arrangements that apply to their circumstances—pensioners in nursing homes, for example, pensioners in public housing. Most of these increases will simply be absorbed into other arrangements. This opposition seems to not understand anything about effective marginal tax rates. Certainly Senator Bernardi in his contribution yesterday, again referring to this pensions issue, offered no viable alternative.

More worrying than that, if you look at all the questions asked today, they do not seem to be able to grapple with any of the serious issues. Senator Coonan sensibly referred again to the consequences for people’s superannuation arrangements with the economic crisis that is developing, and that was a significant question today. We had the question about the pensions stunt, and we had an important question about delivering hospital services and beds and difficulties associated with state and federal government arrangements in delivering some of these services. We had another stunt question about the Prime Minister’s travel, and we had a question about Cairns building demolition. But there was no question of any substantive nature about what would deliver genuine benefits to people on pensions. Nothing of any substantive nature came forward from the opposition other than the stunt about a $30 increase, which anyone who has been informed of the policy debate in this area for longer than half an hour understands is just a stunt. (Time expired)

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of the answer given by Senator Sherry this afternoon. This week Australian shares have tumbled following Wall Street’s worst day since the September 11 attacks, after Lehman Brothers filed for bankruptcy and the insurer American International Group revealed it was struggling to survive. The stock market was not well off before this due to the global credit crisis. Australia’s listed funds management industry has suffered its worst half-year performance for two decades. Now, with the downfall of Lehman, the industry faces even further problems for 2008-09 as asset markets remain volatile. Listed fund managers suffered an average fall in funds under management of 14 per cent in the first half of the calendar year 2008. In the industry as a whole $75 billion in funds under management was withdrawn, resulting in a 5.4 per cent fall in the $1.1 trillion superannuation fund. These figures come from a report by Merrill Lynch published last Friday, 12 September. The analysts say that the lower discretionary superannuation contributions, the move by investors to cash and stronger relative growth in the do-it-yourself superannuation funds also weakened fund flows.

These figures worry many Australians investing in the superannuation funds. They fear that their return will not last to enable them to live their lives as self-funded retirees. This fear is not without reason as the Rudd government fails to outline how to react to this difficult situation. Senator Sherry demonstrated this lack of policy idea very well during question time today when asked about the government modelling of superannuation funds with this big loss. The aim of superannuation is to reduce reliance on the age pension by making super the preferred method of retirement income. With the fading trust in superannuation, the Rudd government risks putting even more pressure on the age pension. Delaying the decision on providing seniors with more financial assistance until the review of pensions and carers payments is finalised in February next year does not help. We already have one generation which has not had the opportunity to invest in superannuation. We cannot risk having even more people relying on the age pension. The Rudd government may hope that the issue of the age pension will just go away. However, despite the rising proportion of self-funded retirees, the issue is not going away.

The Howard government’s 2007 Intergenerational report projected that the government’s spending on the age pension will rise by 1.9 per cent as a share of the national economy during the next 40 years. Even though the proportion of people of eligible age receiving the full pension will decline from 55 per cent to 35 per cent, the number of those eligible will double as a share of the total population. The net effect is a much higher bill to the taxpayer of a 1.9 per cent increase in the average tax rate. The answer is not to further squeeze age pensioners but to fix the retirement income system to improve both work incentives and fairness and to reduce the future cost to the government’s budget. Prime Minister Kevin Rudd said that living on the single age pension is very tough, yet he expects over 850,000 older Australians to keep doing it tough because he is too much of a bureaucrat to make a decision. Mr Rudd keeps saying that Labor assisted older Australians in the budget by paying a one-off bonus. This is the bonus that Mr Rudd was going to scrap before the coalition and the groups of pensioners put considerable pressure on him to continue with it. Imagine the position older Australians would find themselves in today if the bonus had been scrapped, as Mr Rudd intended.

Mr Rudd went to the election last year promising to ease the cost of living pressures for all Australians and this year Mr Rudd promised those on pensions would not be worse off under a Rudd government. If the Rudd government were serious about helping out people on single age pensions, they could fix this now. They are in government and they have the power to make a change. I would ask that they get on and make the change. My question also today to Minister Evans was: how many of the Labor Party backbenchers were asking that pensioners be given a one-off $30 rise to help their pensions? (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I refer to Senator Faulkner’s answers to my questions relating to stormwater harvesting. The issue of stormwater harvesting is vital to supplying the future water needs of Adelaide. As we all know, the Murray-Darling crisis is arguably the greatest environmental challenge this nation has ever faced. The Coorong, an internationally listed environmental site, is being choked. The Lower Lakes, the lungs of the Murray, are gasping their last breath. This once great river, a lifeline to so many communities, is dying. It has been estimated that by 2020 Adelaide’s drinking water will exceed WHO guidelines for salinity on two days out of five if nothing is done to control salinity in the River Murray.

Currently, in an average year, the City of Adelaide depends on the River Murray for approximately 80 gigalitres of water. By contrast, the combined stormwater discharge of the Adelaide metropolitan area is approximately 80 gigalitres of the 170 gigalitres that are released into the ocean each year. I believe that this provides considerable opportunity for the use of stormwater, through aquifer storage and recovery technology, ASR, to relieve the demand for water from other sources. While the South Australian government is proposing a desalination plant that will produce 50 gigalitres a year at a cost of around $1.1 billion—and I note that there is a significant Commonwealth contribution for that—I believe that stormwater recycling will result in much greater gains for about a quarter of the cost. I do not suggest in any way that we should not have a desalination plant—I agree with Senator Faulkner that it is important to have that as a backup—but why aren’t we pursuing something that is as cost effective, as energy effective, as stormwater recycling? In that regard, I acknowledge the long-term support of the Greens with their advocacy for stormwater recycling.

The challenge, Mr Deputy President, is leadership. What Adelaide requires is leadership from the federal government to provide funding through local-state-federal government partnerships to develop a whole-of-Adelaide approach to stormwater recycling. I note that there are already two initiatives, started by the Howard government and continued by the current government, that are contributing to stormwater recycling in Adelaide. Senator Faulkner noted that the Waterproofing Northern Adelaide project, at a cost of $38 million, will be recycling 18 gigalitres of stormwater per annum by 2010. Meanwhile the Waterproofing Southern Adelaide project, at a cost of around $10 million, is similarly making contributions to stormwater recycling in and around the Onkaparinga River. However, there are so many more opportunities that need to be embraced through a joint local-state-federal government process. In the City of Marion, by using the airport site, a further 16 gigalitres of stormwater could be harvested. In the City of Wakefield, around the Gawler River, a further 20 gigalitres of water could be captured, recycled and injected into aquifers to offset the use of Murray water in the northern Adelaide plains.

In addition, there are numerous smaller projects in the range of one to two gigalitres, including along Port Road and the Cheltenham racecourse in the City of Sturt, that could be made possible if leadership were provided, funding made available, and an integrated strategy developed. And can I say about the Cheltenham racecourse site that I fundamentally disagree with the state government’s approach of using that area for housing when it could be used for recycling stormwater. With these opportunities in mind, I believe it is vital for the government to take steps to develop such joint initiatives for stormwater harvesting across the whole of Adelaide. It is this belief that was behind my question without notice and, while I thank the minister for his answer, I believe that much more can be done. We need federal leadership in stormwater harvesting just as we need federal leadership in saving the Murray. If we leave it just to the states, we see responses like the one from the Victorian government to the Murray crisis, which is to build a north-south pipeline that will take out a further 110 gigalitres of water and divert it to the City of Melbourne. Many would say that that is an act of environmental vandalism.

Alternatively we see state governments trying to spend big on energy-hungry projects such as desalination instead of harvesting what already runs down our streets. Metropolitan Adelaide and its plains have many sites with the unique alignment of watercourses to source water, aquifers to recharge and an ocean to discharge. It is the ideal site for strategic stormwater harvesting. In fact, Colin Pitman of the Salisbury council is acknowledged as a world leader. He is a hero when it comes to doing the right thing by harvesting our stormwater and we need to take heed of what he is doing and to expand that substantially. It is my hope that in the future the government will have made more progress in relation to the urgent need for funding and leadership for stormwater harvesting and, as a consequence, the minister’s answers will provide more hope for the River Murray and for the citizens of Adelaide.

Question agreed to.