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

by leave—I move Greens amendments (1) and (2) on sheet 5758:

That the House of Representatives be requested to make the following amendments:

(1)   Schedule 1, page 4 (after line 16), after item 2, insert:

2A  Point 1071-12 (table)

Repeal the table, substitute:

(2)    Schedule 1, page 5 (after line 7) after item 5, insert:

5A  Point 118ZZA-11 (table)

Repeal the table, substitute:

Statement pursuant to the order of the Senate of 26 June 2000—

These amendments increase the taxable income limits under the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 used to determine qualification for the seniors health card and will have the effect of increasing the number of people who will be eligible for the card.

As the card entitles the holder to discounts on prescription medicines through the Pharmaceutical Benefits Scheme; bulk-billing with participating doctors; reduced out-of-hospital expenses above the threshold through the Medicare Safety Net; and certain cash payments through the income support system, this will result in increased expenditure under standing appropriations in the National Health Act 1953 , the Social Security (Administration) Act 1999 and the Veterans’ Entitlements Act 1986 .

The amendments are therefore presented as requests.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000—

The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation, although this interpretation is not consistent with other elements of the established interpretation of the third paragraph of section 53 of the Constitution. This has nothing to do with the introduction of bills under the first paragraph of section 53.

On the basis that these amendments would result in increased expenditure under the standing appropriations in the National Health Act 1953, the Social Security (Administration) Act 1999 and the Veterans’ Entitlements Act 1986, it is in accordance with the precedents of the Senate that these amendments be moved as requests.

These are the amendments I flagged in my speech in the second reading debate to move the threshold for eligibility from $50,000 to $60,000 for singles and from $80,000 to $85,000 for couples. We believe that these are fairer thresholds that accompany the closing of the loopholes, which the government is seeking to do in this legislation. These thresholds have not been raised for a significant time period of time, so we believe that it is appropriate that the thresholds increase. As I said in my speech, we are particularly concerned about the threshold for single people because older single Australians have been identified as a particularly vulnerable group. In particular, we believe women in that group are particularly vulnerable, so we think a $60,000 threshold is more appropriate and, in fact, aligns with average weekly earnings. We also believe that to be the appropriate level to put the threshold at.

I would also like to take this opportunity to remind the chamber that in a bill that we debated last night, the Fair Work Bill, everybody except the Greens agreed to a high-income threshold of $100,000, for which workers on $100,000, because they are on a high income, are exempt from award conditions. So in that bill we class $100,000 as a high income, beyond which workers are not then subject to the same protections of our industrial relations system, yet in this bill, when we are talking about these issues, $100,000 or $80,000 is not regarded as a high income. Contrary to what Senator Nash said—with all due respect to Senator Nash because I know she cares very deeply about older Australians, as do the Greens—we have been advocating an increase in the age pension for many years. The coalition, when they were in government, did not raise the age pension income. It makes me question their new-found sincerity and interest in looking after senior Australians when, for 11 years, they did not address this very serious issue around the cost of living for older Australians and those living on pensions.

However, it is not older Australians who are living on pensions that we are talking about right now; it is those who are not on pensions that do need the extra assistance. The reason the Keating government—and I am not defending the Keating government—introduced this threshold in the first place was to help those people who did not make the eligibility criteria for the age pension but needed extra assistance. The threshold has been set at $80,000 for couples, and we think it should be $85,000. But you are talking about people who are on a relatively high income. As I said, in the bill that we discussed last night, this place said $100,000 was a high income. So you are talking about people on a high income. We are talking about people on or around that income who may be eligible for the seniors card. All this bill is saying is, ‘We count all your income in the threshold of $80,000,’ or, if you go with our amendment, $85,000. So we are ending this disparity between the income that is counted and the income that is not counted.

The evidence shows that there are people who are likely to be on $100,000 but who, because of the process they have used in the past to salary sacrifice, if they have taken advantage of the Howard government’s superannuation changes in 2007, are still able to access the benefits of this card. The Greens have concerns. We think we need to be investing our scarce resources into helping those most in need. That includes helping people on the age pension by increasing the age pension. We have been begging governments, both the previous government and this new government—it is not so new any more—to raise the age pension. That is where we want to be investing because it is those people who are most in need.

I will very briefly touch on the people who are on Newstart at the moment. Unfortunately, increasing numbers of Australians are being forced into unemployment. A partnered family is trying to survive on $21,268 a year. The Greens have put the threshold at $85,000—four times what people on Newstart get. Would we not be better investing our efforts in helping those people? The next bill we will be talking about is a tax amendment bill, and that has a schedule in it that changes fringe benefits tax, which will impact on some of our lowest income and hard-working Australians. I will be absolutely fascinated to hear what the coalition have to say about that bill. Here they are, standing up for older Australians, which is fair enough, but I want to know if they are going to stand up for low-income Australians, because that is exactly what I expect them to be doing in the next bill.

We are talking about people who are on the threshold. The threshold is four times what somebody on Newstart gets a year. If we look at it in that context, where is the fairness? We think the threshold should be increased to $85,000. What we, the Greens, are talking about is, firstly, making sure that everyone is on the same level playing field. Then we are talking about increasing the thresholds for that level playing field to $85,000 and to $60,000. We think that is pretty fair, when you consider the overall circumstances that all Australians are facing. Bear in mind that, if self-funded retirees’ incomes go down—not through any fault of their own, because they have made very careful investments, but because the effects of the global financial crisis on the stock market have meant that their superannuation and the other investments they are relying on have tanked—they will fall below the threshold and be eligible for that support. Bear in mind also that they are still above the aged-care pension threshold. If they fall below the threshold level for the aged-care pension, they will get the aged-care pension and the seniors card. But if they are still lucky enough to be on $85,000 or over—and you are talking of up to and over $100,000—that, in anybody’s book, is a significant amount of money today, particularly when the predictions are that we may see unemployment at over seven per cent. And what will that mean for our economy? What will that mean for those people’s families? Those people are going to be forced into unemployment, again through no fault of their own.

We Greens believe that we need to be looking at where we invest the money. Ideally—if we could get away with hypothecating this—we would say to government: ‘Hypothecate this to help unemployed people.’ We want the government to increase Newstart allowance. Newstart payments are even lower than the age pension because they have not gone up at the same rate as the age pension has.

We need to make some fundamental changes in the way that we look after our most vulnerable in Australia. We do need to be looking after older Australians, we absolutely agree. But we think we need to be investing this money, our scarce resources, into helping those Australians who are genuinely in need, including older Australians who are genuinely in need, and that includes increasing the age pension. We have been on the record constantly as saying to government: ‘Raise the age pension; raise the age pension.’ With all due respect to the coalition, when they talk about supporting older Australians I think there is a group of older Australians on whom we should focus strongly. Everybody needs our strong support—and they need our particular focus at the moment because they are going to be suffering even more in these economic circumstances.

So we think there should be a balance. Through this amendment we can make sure that everyone is on a level playing field, but we should also make sure that we raise that threshold. That would be a fair outcome for this debate. In particular, raising the single threshold to $60,000 would deal with the issues that single older Australians face. They have been identified as suffering the most in terms of their ability to enjoy a decent quality of life. That is what the committee inquiry into the cost of living for older Australians reported: all older Australians should have access to the resources to facilitate a decent quality of life. And that is what we are talking about.

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

I thank Senator Siewert for her comments. Of course she is absolutely right: the current system just perpetuates the inequities that were put in place by the actions of the Howard government in 1999. But her comments also really highlight the anomalies and the challenges in the intersection between the taxation and the social security systems. The government is very mindful of all of this in its treatment of the Commonwealth seniors health card issues and also much more broadly in terms of the support that it is continuing to provide for senior Australians.

If this were the only thing that the government was doing for pensioners and senior Australians then the argument perhaps would be quite clear. But I do think it is important to put on the record, in response to Senator Xenophon’s questions and to some of the issues raised by Senator Siewert, that the situation of the global financial crisis has really changed quite significantly the dynamics and the environment in which we are even thinking about this bill. The evidence is very clear, the information is very much on the public record, that self-funded retirees are in general seeing significant falls in their investment income and now many of them, as Senator Siewert said, will be eligible for a part pension. Current statistics about what has happened even since October show that the impact of the global financial crisis on senior Australians means there has already been a substantial increase in age pension claim rates from around 3,500 a week prior to mid-October to around 5,500 a week into December 2008. And 4,600 age pension claims were lodged in the week ending 16 January 2009. You can see that there is already an increase in the number of people who are becoming eligible for age pension payments.

The other point I want to make is that the government is absolutely committed to comprehensive reform of the pension system. We all know that the Harmer review has been incredibly detailed in its considerations, and some of the comments that were thrown around by the opposition in the second reading debate were really about the kinds of issues that were tested during the Harmer review, including proposals put up by various organisations and interest groups, and that is a fair and legitimate process. But to imply that that is the intention of the government I think is unnecessary and provocative scaremongering for senior Australians. The Harmer review actually handed down its report on 27 February, less than a month ago. It is a comprehensive review and goes to a massive reform agenda of Australia’s pension system. The government has committed to consider the report—and has restated that commitment—and will respond in the 2009-10 budget. So it is very important that we think about the amendments that are being proposed today by the Greens in the context that the budget comes down in May, and this Greens amendment is a short-term measure that could completely undermine some of the comprehensive reform that will be put in place in the budget in May, in a couple of months.

One of the issues that Senator Xenophon raised was the issue of indexation. The Commonwealth seniors health card was introduced by Labor in 1994 to support seniors of reasonable means who could not access the age pension. That was its original intent and purpose. But the indexation of the income limits was ceased by the Howard government in 1999 and last increased in a pretty ad hoc way in 2001, and they have stayed at the 2001 level ever since. It is a pretty clumsy process that the Howard government put in place. It has really deepened inequities in the system since that time. So we realise that we need to give fair consideration and, as Senator Siewert said, to focus our energy and our resources on those older Australians who are most in need of our support. We all know that there are going to be extraordinary pressures on public funds and public support for those who are caught up in the consequences of the global financial crisis. The issue is really one that cannot be dealt with in such a piecemeal way.

The income limits in the legislation are the current limits that have been set to determine the appropriate limit for access to government support. While the previous government changed the indexation arrangements, we are very aware that seniors have argued against that decision to stop indexation. But, as I say, the Harmer review is a comprehensive investigation into the Australian pension system. One of the review’s terms of reference is to consider the:

… structure and payment of concessions or other entitlements that would improve the financial circumstances and security of seniors, carers and people with disability.

So any reform to the pension system will obviously impact on the Commonwealth seniors health card, and a key consideration in addressing the term of reference will be the appropriateness of the income thresholds. As the pension review is being considered in the budget context, at this stage I must indicate that the government is unable to support the amendments moved by the Greens in this form and at this time, because the government will deliver that pension reform in the budget.

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

I have a question regarding people going onto the pension. Do you have any figures on how many people are going onto the pension as they become eligible through age or become eligible as they fall under the threshold because their income has dropped in response to the decreasing value of their superannuation funds et cetera? Is there a way of identifying figures that reflect the numbers of people moving onto the pension via the age eligibility requirement and the assets eligibility requirement?

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

At this stage there is no way of disaggregating those two groups. But there are some indications of a trend of increasing numbers registering for the age pension. We also need to think about this increase in applications in the context of other activity that is going on—for example, the government has lowered the deeming rate three times since November. That may have also influenced some of the income streams.

Centrelink is encouraging revaluation of all shares and managed investments held by pensioners. Centrelink is actually doing that today—today is the date that that revaluation of all shares and managed investments will take place. That is a regular revaluation to ensure that the most recent available value of a pensioner’s shares and managed investments is used to determine the rate of pension. The government undertook a special revaluation in November last year following the dramatic falls on share markets. So those currently in the system may be eligible for additional support. That is also part of the mix of what we are considering at the moment.

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

I am trying to understand why we cannot get the most up-to-date figures—and maybe it is because I do not understand the details of data collection enough. You have the figures from June 2008. That is nine months ago and it is also prior to the global financial crisis really biting. So it is very hard to judge this legislation, because we know that the figures we are using—of around 22,000 affected—are wrong. We know that that is way too high, but we actually do not know how many people are now going to be affected. That relates to our next amendment, which provides that, for some people, eligibility for the seniors card could potentially be grandfathered.

My concern is why we cannot get the most up-to-date figures. As you have just pointed out, Centrelink are actively working with older Australians—which I think is great—to make sure that they are getting access to benefits if they meet the thresholds. I wonder: don’t you keep records of that? Don’t you keep records of when people are coming onto the pension and how they are meeting the criteria? Is it just because the data is not processed till the end of the year—which I also find a bit difficult to understand?

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

It seems like a simple question but in fact it is quite complicated, because there are so many factors taken into account for those people who may be deemed eligible. One of the important issues that we have, a real challenge, is about the full-year impacts on superannuation incomes, which are still yet to be known. It is difficult to disaggregate just on the simple dimension of those who are self-funded retirees who are now becoming eligible, because there are so many other considerations that come into play in those numbers. It is difficult to disaggregate on such a simple scale.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

We will not be supporting what I will refer to as the first amendment, but I acknowledge what you are trying to achieve. The principle under which we do not support the first amendment is that, if we are tinkering with this at all, the coalition believe that we should be doing this in the context of having all the information. I acknowledge that the minister says, ‘You have only had it a month and it is difficult,’ but that is why we find it a bit difficult to understand why we are bringing this legislation on at this time rather than at a time—perhaps when we come back—when we have all had time to consider it and after the government has considered the Harmer report. I think we would all be in a much better position.

We know that the Harmer report is going to cover that entire ambit, whether you are a pensioner or self-funded retiree. There will be a number of adjustments made. Clearly the Harmer report was a legitimate attempt to ensure that, if any adjustments are made, we know exactly what is going to happen at the end of the day rather than try to make the adjustments piecemeal. As I have indicated before, we disagree with the government rolling back the support for seniors, and I will not go into that again.

To Senator Siewert I would like to amplify one of the reasons that in 2001 we changed the eligibility and the numbers increased. I appreciate that you are not being mischievous about the comparisons with the youth allowance and other demographics. This is a health card. By the time you get to a certain age—and no-one is questioning the age—the costs of life become much greater, and often at a geometric rate. As you become sicker today, it is going to cost you an awful lot more. It is very, very expensive to be older. That is what this is about. I acknowledge that we can say, ‘Perhaps it does seem like a lot of money.’ To one of those couples on $42½ thousand a year, it might seem like a lot of money, but I am not sure we can reasonably index this against paying for good health.

The consequences of being in or out of the Commonwealth seniors health card—because we are saying, quite legitimately, that we are going to move this a little bit to get a saving—are dramatic. I think you will acknowledge it is a bit of a cliff fall without talking about 600 per cent. Access to prescriptions at a reasonable rate so that people can afford to pay for their own health care is one of the fundamentals of this, and for those people who need a wide range of prescriptions it is a dramatic change. I do not think anyone is in doubt of that. We are only not happy to discuss and support the first amendment on the basis that I have just outlined. I think the Greens would also acknowledge that the government has said, quite rightly, that the Harmer review has only been out a short while. That makes me wonder why, when we have had a review, you would be bringing legislation on now rather than waiting for an appropriate time when we would all be able to have a very ordered look at a comprehensive investment by government.

Instead what we know today is that we are spending $19.3 million in a process that is going to give us a net saving of $84.4 million. I have to say that that smacks very much of Treasury rather than of someone who is looking comprehensively at this. This is all about savings. If we are going to make those savings—if the government have decided to make savings across the board and if they have decided that they are going to make savings across the board in regard to senior Australians—then surely it would be far better to do that in an environment where we have all of the information at hand so we can make an informed decision about our most senior Australians. There is just no motive in my mind for bringing this on now.

I will just touch on the second amendment—the so-called grandfathering. I think we should be in this place to make any legislation better. If we are all about saving the 22,000 people who may be affected by this by accepting the Greens grandfathering clause then of course it will be better. At this stage I do not want to throw that out completely. But I would say to the Greens, if you are interested in this grandfathering clause, the best way to deal with this legislation is to simply join the coalition in voting it down. We would much prefer to have a look at this legislation in the light of the Harmer review. I think the thrust of what you are doing with the grandfathering clause is very useful because it recognises the angst and the pain of the 22,000 people who will be falling off the cliff shortly if this legislation is passed. I acknowledge that.

But I would appeal to the Greens to join with the coalition to provide an opportunity to scrutinise this legislation when we have the very best possible information available—information that has already been paid for by taxpayers and information that is supposed to be out there to inform this place and the other place and to inform Australians. I think that if the Greens join us in that context then we can have a bipartisan, rational and transparent approach to how we deal with the future arrangements in terms of the health care of our senior Australians. I would think that is a far better idea than voting in a grandfathering clause that will save some. We still do not have an extract understanding of how that will have an impact on them because there are other things coming down the line.

Obviously in the Harmer review there are going to be some changes to how we allocate pensions and how we deal with our seniors, and I think that people need to know what the final position on this is. We are unable to do that today and I appeal to the Greens to support the coalition in simply voting down the legislation. As I said, whilst I acknowledge the thrust of the grandfathering amendment I think it would be far better and far more responsible, both fiscally and in a humanity sense, to wait until we have all of the information from the Harmer review.

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

We know very well that we are not talking about 22,000 people at this stage. I am frustrated that we cannot get access to better data, but we are not talking about 22,000 people at this stage. I would like to ask both Senator Scullion and Senator Stephens a question. One question is to the coalition, and this is on an issue—and it sort of relates to our grandfathering clause too—that the Greens have some trouble with. Let us take the example of two couples on the same income. One couple, because they do not have access to the superannuation process the Howard government introduced in 2007, do not have access to the loophole—let us describe it like that. The other couple, who are on the same income, do have access to the superannuation process and the taxation process—and I will not bore the chamber by going into the technical details—and basically, because they can access the loophole, they can access a seniors card. The problem for us is: how is that fair? We acknowledge that it is difficult to take something away from somebody and that is why, upon reflection, we have proposed the grandfathering clause—because we do not think it is fair to take something away from somebody.

We know there are fewer than 22,000 people because we know that there has been a massive impact on superannuation funds. So we think that is fair. We have fixed the loophole but we will also look after that group of people—though they still get an advantage over fellow retirees on the same income. We have looked after them and we have not taken anything away from them, but we have fixed it for the future. We think that is fair.

Senator Stephens, I would like to know why you think it is fair that, because of a loophole, a group of people can be earning the same amount of money as another but one group cannot access the seniors card. Could you confirm that my understanding is correct that the people that would no longer be able to access the card would still get the PBS and Medicare safety net?

I get the issue around the increased cost of health care—I really do. Bear in mind also that those couples generally no longer have to pay a mortgage or pay the exorbitant cost of raising children—unless those children are the generation X, Z or whatever that are still staying at home. They have increased health costs but their other costs are reduced. But there will still be a safety net, as I understand it, under those medical expenses. We are talking about, for PBS, a baseline and also, for Medicare, a safety net, aren’t we? It is not as if the healthcare costs for these people are going to absolutely skyrocket, because they will still have access to that safety net. Could you please confirm that I am correct?

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

Senator Siewert, you are absolutely right. What this legislation is about is closing a loophole. It is not about budget savings—in fact, we know we are going to be investing much more in a fairer and more equitable system supporting our older Australians.

Changes proposed by the bill to access to pharmaceutical support are an important issue. We certainly understand that many people are worried that, if they lose access to those concessional pharmaceuticals, they will not be able to afford their medicines. I want to make it absolutely clear and plain in answering your question that there are safeguards in place to support them if they get sick.

To remind everybody thinking about this legislation—as you say so rightly, Senator Siewert—this is only for people whose income is more than $50,000 a year or, for couples, $80,000 a year, which is a substantial amount of money, as you say, for older Australians. Below these amounts they will still have access to the pharmaceutical concessions and above those amounts a safety net remains in place to ensure that those who need lots of medicines are protected from the high costs. The Pharmaceutical Benefits Scheme safety net allows a senior without a concession card to have their contribution decreased from the standard rate of $32.90 a script to the concession rate of $5.30 once their expenditure gets to $1,264.90 in a calendar year. You can see, of course, that people who would be using many scripts would get to that threshold very quickly. Once a senior reaches the safety net threshold, an application can be made for the PBS safety net card. They will be eligible for that if they reach the threshold in a calendar year. That card gives automatic access to the concession rate of pharmaceuticals.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I was listening very carefully to Senator Siewert when she said that perhaps the number I had was not correct. I know that the government will have the number at hand. Senator Stephens, can you tell us again exactly how many people will be affected by this access arrangement?

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

Senator Scullion, we had a long conversation about this. You might not have been in the chamber. At the time of the original explanatory memorandum it was estimated that about 22,000 seniors would be affected. We now know, given the impact of the global financial crisis, that it is probably going to be significantly fewer than that. We know that because of the trend of increases in age pension claim rates. What I outlined was the rough figures that we have available already.

So there has been a substantial increase since October, from 3,500 pension claims in mid-October to around 5,500 occurring per week into December 2008, and 4,600 age pension claims were lodged in the week ending 16 January 2009. The challenge for the government is that we cannot clarify the specific numbers because the finalised impacts of superannuation payments will not happen until the end of the financial year. So we are very clearly focused on closing this loophole as soon as we can, because it is about fairness and consistency, and they are important principles for us in ensuring that the social security system supports all Australians.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

Minister, just to clarify, that approximate figure of 22,000 people with Commonwealth seniors health cards will significantly reduce as a consequence of the Rudd recession. Just to be clear: as we, some stage in the future, climb out of the Rudd recession—because of incomes coming in—what those people who currently have a Commonwealth seniors health card can look forward to is in fact eventually losing their Commonwealth seniors health card. Is that right?

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

Senator Scullion, that is a very cheeky assumption on your part. You know the Harmer review is a comprehensive review of the pension system, and to make an assumption like that is both unfair and a bit disingenuous. The issue for us is having a fair social security system and one that supports older Australians who need financial assistance. So we will wait with bated breath—as you will—for the Harmer review and its recommendations.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I thank the minister for that, and I acknowledge that perhaps I was a bit cheeky in thinking that those pensioners would expect Australia to recover from the Rudd recession any time soon.

I know we are waiting for this Harmer review to come out, but I just want to put on the record that the coalition would be delighted to have a look at some legislation that affects this particular demographic, in the light of other changes that are afoot at the moment. To us there does not appear to be any reason to look at this piece of legislation right now, with only a portion of the information that we should have available. We know that the Australian people have made a considerable investment in the Harmer review. We do not see any reasonable motive at all for us to look at this legislation in the absence of the most recent information. That is the fundamental reason, part of a multitude of reasons, why we are not supporting the first Greens amendment. At this stage the number of seniors concession card holders is apparently decreasing from 22,000 because of the Rudd recession—

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

Global.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

Well, Senator Collins, everything seems to be global with Labor. It is the blame game—‘It’s all global, nothing to do with this Prime Minister—he is not responsible for the most horrid recession that this country has seen in many, many years.’ So I welcome your interjection, Senator. But, again, we would all hope that someone starts taking responsibility. Many Australians see this place as leaderless; I acknowledge that.

I can assure you the focus at the moment is on those more vulnerable Australians, whom those on this side—and, I suspect, on the crossbench, including the Greens—believe are sufficiently important to be provided with all the information so we ensure that their future is secure and safe, primarily because we have all the information at hand. I think that is quite a reasonable position to take. So, unfortunately, it appears that we will not be able to support the first Greens amendment. We certainly will not be supporting the legislation without having a look at the report of the Harmer review.

Question put:

That the request (Senator Siewert’s) be agreed to.

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

I move Greens amendment (1) on sheet 5772, which has been circulated in the chamber:

(1)    Page 10 (after line 14), at the end of the bill, add:

PART 4—APPLICATION

21  Application

The amendments made by this Schedule do not apply in relation to an individual who had or was qualified to have a seniors health card under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986 as in force immediately before the commencement of this Schedule.

This relates to grandfathering. As I said in my earlier remarks on the previous amendments that the Greens moved, there are a group of people that already received the seniors card despite the fact that they are over the threshold. In effect, their salary is not being counted within their income in respect of the threshold. We do think it is unfair to take a benefit away from people when they already have it. Losing that benefit is what I think people are very worried about. We suggest that would make the system unfair. A group of such people have received the card and gained a benefit from it—because the card is a benefit—and they are now used to that benefit. This legislation, without this grandfathering clause, would take that away. We think that would be unfair to those people, and it has created a lot of fear for those people. It is unfair due to both the fear it has caused and the loss of the benefit itself. The system as it currently stands is unfair because, as I have said, couple A and couple B may both be on the same income but one couple gets the card and the other couple does not. That is unfair as well.

There is no way that the changes being introduced in the legislation will lead to a system whereby everybody wins. The Greens actually do agree with closing this loophole, so if you meet the threshold you get the card. However, as I have said, there is this group of people. Senator Stephens, Senator Scullion and I—the three Ss—have been talking about this issue. We have acknowledged that we do not know the exact number, though we know it will be significantly less than 22,000. We think a fair outcome of this is to close the loophole but look after those people that are getting the card. We realise that we will be entrenching that unfairness through the changes that are to come—though that is happening while the system is being made fairer overall—because it is also unfair that those people who are currently getting that benefit would be ticked off from getting that benefit and would no longer have access to it. So we believe that the fairest approach is to close the loophole and get that sorted out but also look after the people currently getting the card. We do that knowing full well that the number of 22,000 that is being used is now grossly exaggerated. Sorry, but ‘exaggerated’ is not the right word because ‘exaggerated’ implies an intent, and I do not believe that is the government’s intent. So let us say it is now artificially high because the global financial crisis has kicked in very significantly and has very strongly impacted these people’s earning capacity.

Can I state once again: it will not cut people off. If they are under, they will not suddenly drop off. If their income has been affected and they are down below $80,000, they will still get the seniors card. So to imply that, because people have been affected by the global financial crisis, they are getting a double whammy is in fact not true, because as soon as they go below that threshold they will in fact be able to claim the seniors card. We are trying to come up with a way of ensuring the government’s policy intentions are met to develop a fairer system so that everyone is on a level playing field. We would get rid of loopholes but look after those people who will be adversely affected now. We realise we are entrenching some unfairness. Grandfathering, by its very nature, does that. When the coalition government brought in the Welfare to Work provisions, they grandfathered a whole group of people who were already on the system. Then there were two different systems running at the same time, because they realised it was unfair for people who were already on the system to make them subject to those new provisions. Do not let anybody think that, therefore, I support Welfare to Work—I do not and never have—but I just want to acknowledge that the coalition did see that it was unfair and, when they brought in the changes to Welfare to Work, they did grandfather a whole group of people.

Grandfathering has been used on numerous occasions. So there is nothing unusual in making sure we protect a group of people who are used to accessing or are already accessing some benefits. We believe this is a fair approach that deals with the concerns of the people who fear they are going to lose benefits, but it does mean that people in the future will not have access to that loophole. We urge the chamber to support this amendment, because we believe it is a fair way forward.

Nigel Scullion (NT, Country Liberal Party, Deputy Leader of the Nationals) Share this | Link to this | Hansard source

I have already made some comments on the grandfathering amendment. Senator Siewert said, ‘It is so important that we get it right.’ I acknowledge that the Greens are making an attempt to ensure that there is not this notion of unfairness, of those who have and those who have not. I am not so sure a grandfathering clause should not be included in the final arrangements; I just do not think the final arrangements should be made today. We have had amendments circulated by Senator Xenophon. Have a look at the amendments, have a look at the interest in this and have a look at how many people are concerned about this. As Senator Siewert said, we want to make sure people are not afraid of us, and that is why I would again appeal to the Greens to simply vote this legislation down. Bring it back in seven weeks, when we have considered the Harmer report, and we can consider it then with all of the information behind us.

I have said before that we disagree with some of the fundamentals of the impact. I acknowledge that the grandfathering clause will allow the people who are currently in the scheme, who stand to lose that entitlement, to keep the entitlement, which will make them happy, but there are people who are about to join the scheme and have some expectation of that entitlement, and I guess that will make them unhappy. I acknowledge it is very hard to keep everybody happy. We owe people to consider this matter in light of the very best information available. There is no reason whatsoever that the government cannot simply withdraw this legislation and reintroduce it when we have had a full examination of the Harmer report, which is going to have another impact on self-funded retirees. It is for those reasons that we will not be supporting the grandfathering clause. I am quite sincere. We will sit down, in a bipartisan fashion, and examine this very carefully, but we can only do so with the backdrop of the information that this country has already invested in, which is the Harmer report.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I have got a lot of sympathy with what Senator Scullion has said, but we are here to make decisions and there is always another report and always another process. The government has made a priority of this legislation. I do not know what the government’s position is on the amendment that Senator Siewert has just moved, which would mean that people who would be disadvantaged—because they would lose their card under this legislation—would no longer lose their card. It would mean that newcomers who are reasonably well off would not have access to the card. That is the ultimate point for the government. We have all heard how, with the worsening financial situation, the number of people who have a card and who are better off has fallen from 22,000 to some unknown figure, but very much smaller than that, in just the last few months.

The Greens will support the legislation if the amendment fails. We are moving the amendment so as to put to the opposition a position which would protect the folk that we and they are concerned about—the people who would otherwise lose their cards. For us, this is effectively a win-win proposal that is being put to the chamber and I ask the opposition to think about that again. This is part of the Senate process and we are moving closer to a decision. Some very positive amendments are being brought forward to try to meet the major concerns of people who might otherwise oppose the bill, and they of course are those in the opposition and the crossbench Independents. The government may not like it but it is a serious amendment. If it is put into the bill, it will at least relieve those folk who feel, with the passage of the bill, they are going to lose their card and cannot afford to do that in the current economic circumstances.

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

I thank Senator Brown for those comments. Senator Siewert actually nails the issue. We are stuck between a rock and a hard place here. This bill is about amending an anomaly that was put in place in the changes in September 2007. The people, who we now know will be far fewer than 22,000, are those who have come into the system since September 2007. So it is not a hugely entrenched group of people, if I can say that in the most sympathetic of terms. One of the things the grandfathering clause would do is to create a fair, fairer and fairest system, which is hugely problematic for us simply because we are here to close a loophole which creates inconsistent treatment across the social security legislation. This could have the unintended consequence of creating further anomalies further down the track as we continue to adjust the social security system to make it fairer. There could be an unintended consequence of trapping people into this grandfathering situation and create another group of people who would be treated differently as further changes were made. On that basis, we are not able to support the grandfathering amendment of the Greens, but we thank them for trying to work out a resolution to what is a sticky situation.

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

Can I just make my position clear with respect to the grandfathering clause. I commend Senator Brown for moving that clause—

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Senator Siewert.

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

Senator Siewert, sorry. I can tell the difference between the two. It has been a very long week.

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

He is taller than me.

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

That is right. I indicate that I support the grandfathering clause. There is a concern that people will be disadvantaged as a result of this and I think that the Greens amendment is a sensible one. I note the comments of both the government and the opposition, but my fundamental problem relates to the whole issue of the threshold. I supported the Greens amendment to raise the threshold from $50,000 to $60,000 for singles and from $80,000 to $85,000 for couples. That really was my minimum position to support this bill. Looking at CPI, an amendment has been circulated in my name with respect to CPI. But that really is redundant and I will not be moving it, because that was on the basis that Senator Siewert’s amendment would be successful.

My plea to the government is: go back to the drawing board. I am concerned about the prejudice this will cause to existing cardholders. But again I note Senator Siewert’s quite genuine and I think reasonable concerns based on public policy about where you have the cut-off and who should be eligible for this in terms of equity. Senator Siewert has made the point that there are many others in the community who do not get a benefit at all who are on other benefits. I thought that the Greens position was the sensible one in terms of the thresholds. In the absence of that being passed, it is impossible for me to support this legislation in its current form.

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

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

I appreciate the minister’s remarks. I am happy to sit down with the government on this, but there is that small issue of resources and physically, in terms of IR and the so-called alcopops bills, we have been working around the clock. We are doing the very best we can on all pieces of legislation but it has been physically impossible for us to have the sorts of discussions that would have been preferable in order to do that. In terms of the arguments and the proposition put by the Greens in relation to the thresholds, I would have been comfortable to as a minimum support the legislation on that basis with CPI indexing. Again, my door is open. We have got a few weeks so, whenever we get up, whenever we get through this legislative session—whether it is today, tomorrow or Sunday—I am happy to sit down and further discuss this with the government.

Question negatived.

Progress reported.