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

The Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009 is legislation which implements the government’s budget pension measures. The keynote feature of this legislation is the increase in the base rate of the single pension of $30 a week. The opposition of course welcomes this increase, because it was the coalition who called for the increase by the same amount a year ago. Legislation was even carried by senators at the time to increase the pension. Although it took the Rudd Labor government a year to come on board, it is great to see that this pension increase will now be provided to pensioners. Had Labor increased this pension back when it was proposed by the coalition, eligible pensioners would have been over $1,000 better off.

The coalition also supports the changes proposed to the indexation arrangements for pensioners. Delivered through this legislation will be a new indexation arrangement under which pensions will be increased by whichever is the greater of the CPI or 27.7 per cent of MTAWE—not 25 per cent as in the past. This change builds upon the structural changes and regular improvements delivered to pensioners by the previous government. The third change to pensions that I would like to comment on is a consolidation of current pension supplements and allowances into a single payment. This simplifies the pension supplement scheme and provides an increased single payment. Two single pensions combined will increase by a little over $2 a week, and single pensioners will be $10 a week better off. I know that many pensioners welcomed the one-off lump sum bonus payments provided to pensioners by the previous government and no doubt will miss that money. As Labor has spent the budget surplus left by the previous coalition government many times over, I would suggest that pensioners will take some solace from the new increases placed in legislation so that they can budget with some certainty.

A further change proposed in this legislation is the abolition of the previous government’s Pension Bonus Scheme and replacing it with a new work bonus scheme. The coalition believes that it is beneficial to encourage people, where they are able, to remain in the workforce beyond notional retirement age. It provides both economic and personal benefit if people can continue to contribute their experience and expertise in the workplace. I concede that the take-up rate of the previous government’s lump sum of up to $30,000 to pension-eligible people who remained in the workforce was less than expected. We believe that it is good public policy to support people to work beyond retirement age and hope that measures proposed in this legislation will in fact achieve that goal. The coalition will certainly be monitoring the impact of this legislation in this area, and we certainly, in principle, support this measure.

While the measures outlined so far are the highlights of this legislation and certainly received a mention from the Treasurer on budget night, as with most legislation proposed by Labor, there are some items that were not widely publicised on budget night. Firstly, I refer to the changes to the pension taper rate. Under this legislation, pensions will be reduced by 50c for every dollar earned above the threshold. Under the previous coalition government the rate was 40c in the dollar. This change will certainly impact negatively on some pensioners, although I recognise that the government is proposing to grandfather it for existing pensioners. Apart from creating what I would expect to be an additional workload for Centrelink to manage this, I believe that the government is making such a change in what is perhaps the fairest way to implement the change without seeing existing pensioners experiencing a sudden decrease in their income.

The final issue I would like to make a comment on in relation to this legislation is the raising of the pension age to 67. This increase in the age of pension eligibility will begin in 2017 and conclude in 2023. It has been suggested that the reason the start of the implementation has been put back by some eight years is so that the current Prime Minister will be so long away from office that someone else will actually need to deliver the pain. Of course, this government is well known for giving out goodies today and being popular while delaying some sort of painful payback until some other time. I think we would all acknowledge that this is a fairly cynical ploy by a populist government which delivers political outcomes instead of sound policy outcomes. We hear all about the hard decisions that need to be made, yet again we see a so-called decision delayed for so long that Labor are hoping that when it has to be delivered no-one will remember who put it in place.

Notwithstanding this particular political manipulation by the Labor government, it does attempt to address demographic changes that we as Australians have to acknowledge are being experienced. The previous government produced two international reports and found that we currently have approximately five workers for every one person dependent upon social security. By 2040, without some policy changes, it is predicted to be 2.5 workers. Something needs to be done to address this and remove any barriers for older workers remaining productive in the workforce for longer where they can. The measure of increasing the pension age will go some way to addressing the demographic challenges that we face, but we must also ensure that support is provided and any age based discrimination is eliminated to ensure that this change does not become a burden instead of a bonus for individuals and our economy.

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

The Greens of course welcome the move to increase the base rate of the age pension and a range of other pensions by $32.49 per week for singles and $10.14 for couples. The Greens have campaigned for many years on the issue of the inadequacy of these pension payments by comparison to community standards and in the face of rising living costs. We welcome the increase in the pension rate as a very important step in helping people address their standard of living and providing quality of life for those on the age pension. This increase in the base pension rate includes most but not all people receiving disability support pensions, as well as the carer payment, veterans pension, widow pension and wife pension recipients. However, it does not include the sole parent pension or those living on parenting payment single and it also excludes disability support pensioners who are under the age of 21 and do not have dependent children.

Why these groups are excluded from an increase in the base rate pension designed to deal with and address the rising cost of living makes absolutely no sense, as those groups face exactly the same cost of living pressures, if not greater ones when they are trying to raise children. In fact, in the case of single parents, they may have many mouths to feed. The increase does not extend to those on unemployment benefits or on Newstart, which includes those single parent families with school age children who are now forced onto Newstart allowance under Welfare to Work. The Greens remain extremely concerned that some groups have been excluded from the pension rise for no valid reason and that the disparity in the different types of income support payments continues to grow.

This bill represents, we believe, one of the most significant changes to Australia’s social security safety net since the Whitlam era. For the first time in our history, we have a Labor government deliberately making a distinction between different groups and types of pensioners. On the one hand we have a group, including those on the age pension, who are finally to receive a significant increase, which of course we support, as I said. But on the other hand we have those who are on the parenting payment single and the younger disability support pensioners. They will not receive the increase. There is absolutely no credible rationale for the distinction between these groups. In fact, it seems to us that the government has made a political decision about the deserving and the undeserving poor.

There is no evidence that can be presented to show that the impacts of the cost of living pressures for one group are greater than for the other. There is absolutely none. The weak justification put forward by the government—that single parents receive other payments—is absolute nonsense. Not only that, and I will discuss that in a minute, but they have also effectively frozen the maximum rate of family tax benefit—the family tax benefit which they used to justify the fact that they are not raising the income support for single parents. They are using the FTB to justify it and then freezing the FTB—another go at single parents.

If the current pension rates cannot adequately sustain a single age pensioner—and of course we have demonstrated very clearly that they cannot—it is not at all clear to us, and again no rationale was presented, how they expect sole parents, those on unemployment support and their families to survive. Why doesn’t the same rationale apply? We know the cost of living has increased for those on age pensions, but that does not apply to sole parents? Pull the other one.

These significant structural changes have been introduced without proper opportunity for public consultation and debate. We had a very rushed one-day Senate inquiry. I think it was referred on the Tuesday and we had the inquiry on the Friday, so there was not extensive community consultation and debate. The government argues that there was an opportunity for consultation through the Harmer pension review and the Henry review of retirement incomes. However, both of these reviews are very narrow in their terms of reference. They do not consider the social security system as a whole. They do not look at the impact of the cost of living pressures on other groups of people on income support, including single parents, the unemployed and other low-income families.

We are now seeing a significant change to our social security system and yet another layer of complexity added to entitlements, apparently with no consideration given to others who have been excluded. There is no adequate opportunity to consider the implications and impacts of these changes before they will be made law. This policy, which excludes sole parents from any income support increases, is in fact without evidence base or rationale. We should not be making these major changes on the run without a full look at the impact that not raising the base rate for those on sole parent pensions and Newstart is going to have.

The Australian Greens share the view of all the community service organisations who presented to the very hastily convened Senate Community Affairs Legislation Committee inquiry, including the Australian Council of Social Service, Catholic Social Services, Family Relationship Services Australia, Uniting Care Australia, the St Vincent de Paul Society, the National Council for Single Mothers and Their Children, solo mums Australia, the Sole Parents Union and the ACTU. We believe that single parent pensioners and their families and young people on disability support pensions should not have been legislatively excluded from the increase in the base pension rate. The Greens are extremely concerned by the plight of the 600,000 or more children in 360,000 single-parent families who rely on the parenting payment single. There are at least 20,000 other single-parent families who have been moved onto the Newstart allowance under Welfare to Work. I don’t think anybody in this chamber can be under any illusion about what the Greens think of Welfare to Work.

The decision to exclude this group from the pension increase flies in the face of the government’s own social inclusion policy. Now it should be called the social exclusion policy. Let me remind you that the Newstart allowance, which is now going to be $106 less per week than the single age pension, was designed as a short-term payment for unemployed singles, to support and encourage them to transition into the workforce. It was not designed to provide long-term support to families. It is quite obvious that in this financial crisis we need to be doing all that we can—and I have stated this on numerous occasions—to help those on Newstart to manage to survive in good economic circumstances so that they can re-enter the workforce very quickly. As I have also articulated on numerous occasions, studies show that people on Newstart are at risk of falling into poverty, and once you are in poverty it is very hard to get out of poverty. So, from a purely economic perspective, let alone a social perspective, it is much better for a country’s economy to ensure people are able to be work ready as soon as possible.

In addition to being overlooked in the proposed pension increases, single-parent families have also been further disadvantaged in the legislation by changes to the family tax benefits and the way they are to be indexed. The change to indexation from MTAWE, the male total average weekly earnings, to CPI will see payments gradually fall behind the cost of living. CPI does not provide an accurate reflection of the cost of living for single-parent families, and the government has admitted this on many occasions. Many of them spend half their income on rent and the majority of the rest on food and utilities.

The Australian Greens are worried that there have been a number of recent legislative changes that have impacted on single-parent families, all of which have been made without due consideration of the cumulative effects of these changes and their ultimate impact on the children growing up in these families. As Therese Edwards of the National Council for Single Mothers and Their Children pointed out:

… this payment was not part of the scrutiny of the Harmer review. It was excluded. It is documented in the Harmer report that it is excluded. Here we have a significant part of our population and also our future population and we do not know what has happened. I talked about three almost invisible hammers coming over and hitting sole parents, one in the disguise of welfare to work, one in the disguise of family law reforms, one in disguise of the child support and now this one.

The Australian Greens are concerned about this series of far-reaching and interrelated reforms that have been pursued in isolation from each other without consideration of the cumulative impacts and despite the fact that they impact directly on a group who are particularly vulnerable to small changes in income and at extremely high risk of poverty. The linking of family payments to the average weekly earnings of a working male was a key plank of a deliberate strategy by a previous Labor government in 1987. Its aim was described by the Prime Minister at the time, Bob Hawke, as being that ‘by 1990 no Australian child will be living in poverty’. While this audacious goal has not been accomplished, research suggests that over the period from 1982 to 1996 there was a one-third decrease in child poverty—in other words, it was having an effect. The sole parent pension was introduced by another Labor government in 1974 and championed by Bill Hayden, who reportedly remains very proud of it. It appears that these proud, family friendly, antipoverty policies are no longer a priority of the Rudd Labor government.

As Frank Quinlan from Catholic Social Services pointed out in their submission to the Senate inquiry, the exclusion of those on parenting payment (single) from receiving the increase is a retrograde step that severs the 30-year tie between the rate of age pension and that of sole parents. The only rationale for breaking this longstanding nexus between child payments and community standards and dismantling this anti child poverty strategy is given by the Minister for Families, Housing, Community Services and Indigenous Affairs, Minister Macklin, in her second reading speech. She states:

The removal of the link to earnings ensures that Government expenditure on family assistance is more sustainable in the long-term.

The minister goes on in fact to say:

In a tight fiscal environment, savings from reduced expenditure on family tax benefit can be directed to funding other priorities, such as the Secure and Sustainable Pension Reforms.

It is clear that in this context the term ‘sustainable’ is not used in the sense of being sustainable for families. In fact it is misused to refer narrowly to the economic sustainability of the budget rather than to the health and wellbeing of families, particularly children. The minister is effectively saying that money is being taken away from one group so that it can be given to another group who are considered a higher political priority. The fact that the first group, families receiving family tax benefit, includes those single-parent families that rely solely on income support—who are the greatest users of emergency support and the most likely to be living in poverty—is not addressed anywhere in the minister’s speech.

It is simply not appropriate for the government to trade off the wellbeing of one group in desperate circumstances against that of another group in desperate circumstances. The reason why Australia has relatively high rates of spending on family payments as a proportion of GDP by comparison to other OECD countries is entirely related to the manner in which family payments were extended by the previous government upward to middle-class families with other sources of income. It does not reflect the adequacy of the payments made to single-parent families reliant on either parenting payment (single) or Newstart who are receiving the maximum rate of family tax benefit. We are not opposed to the targeting and tightening of eligibility for family tax benefits but we believe that simply taking money from low-income families to give to other people in equally desperate circumstances is extremely poor policy. As Kate Beaumont from the National Welfare Rights Network put it, ‘over the next four years this one initiative will take $1 billion out of the mouths of children in our community’.

Given the challenges we face with our shifting population demographics, the Greens cannot understand how any measure that relies on taking money from one group and giving it to another can be considered sustainable. The Rudd government has both failed to address these critical issues of fundamental change to our social security system in a joined-up, holistic manner and has failed to consider how these and other changes impact on other areas of government policy. This includes its commitment to social inclusion—which should now be termed ‘exclusion’—early childhood development and child protection. It has also shied away, we believe for reasons of political expediency, from dealing with and addressing the fraught issues of adequacy and equity across the system of social payments as a whole. By failing to tackle head-on middle- and upper-class welfare in both superannuation and family payments they are doing those on Newstart and those on parenting payment (single) a huge disservice.

This exclusion of single-parent families from pension increases could be summed up in one simple statement: ‘By 2020 no child of a single-parent family reliant on income support will not be living in poverty.’ This government is guaranteeing that the 600,000 or more children in single-parent families in this country who are reliant on income support will be living in poverty. There is no doubt about that.

The Australian Greens are also concerned by the decision to raise the pension qualification age from 65 to 67 years of age. This proposed legislative change has been made with little community consultation and little consideration of the varied circumstances of working Australians approaching retirement age. We support the position expressed by the Australian Council of Social Services and others, who argue that these measures are tackling the need to respond to changing population demographics from the wrong end. Efforts to increase the participation of older Australians in the workforce should focus on maintaining the participation of those with the greatest capacity to continue working. They should not come at the expense of the living standards and quality of life of the large proportion of elderly Australians who are unable to find work or to continue working.

The ACOSS submission highlighted the fact that there are a significant proportion of those between the ages of 60 and 65, about 50 per cent, who are already on income support. While we can see why the government is moving this measure, the Greens are concerned that it has not been adequately considered and that there has not been adequate consultation—and this needs to be done because of its ramifications for those currently in the workforce and what it means across-the-board for superannuation. So we will be moving to exclude that particular schedule from the legislation, believing there needs to be further community consultation. I will also be moving a second reading amendment to ensure that the increase that is going to those on the single age pension is also given to those on other forms of income support such as single parents and those who are on Newstart.

The Greens also looked at issues around taper rates and asked extensive questions during both estimates hearings and the community affairs committee inquiry and we were reassured by the department’s answer that nobody would be worse off under the taper rate—that under the changes to the taper rate system people will stay in the old system until they would be better off in the new system. I sought those reassurances during both estimates and the inquiry and I will seek them again during the committee stage—that is, that no-one, as is our understanding, will be worse off under these changes. In other words, you stay in the old system until you would be better off in the new system.

This issue has been of great concern to the community. I note that most of the people who made submissions to the inquiry in fact thought the new taper rate was okay because of the reassurances that they had had from government. The Association of Independent Retirees was a notable exception, but the National Seniors Association supported the taper rate changes because of those assurances. So I will again seek those assurances from government in the committee stage of this debate.

As I said, the Greens support the increase in the single age pension. We have been campaigning for it for years and we think it is good. What is bad is that the government is now dividing our community into the deserving poor and the undeserving poor. There is simply no justification for not providing an increase in the base payment for single parents, who struggle to pay the rent, who struggle to buy clothes for their families and who struggle to adequately feed their families. If you are trying to survive on parenting payment (single) and FTB you are doing it very tough. Those not already living in poverty will be through the lack of an increase in payments to single parents. How can this government look single parents in the eye—those 360,000 families, the 600,000 Australian children who are going to be growing up in poverty—and say, ‘We could not afford to increase your income’? That is not true; it can. Senator Brown, in his budget reply, identified $35 billion in savings the government could make if it had the guts. It needs to have the guts to support children in this country. It needs to increase the base rate payment for single parents and those on Newstart. There is $106 difference between those on an age pension and those living on Newstart. If people cannot afford to live on the pension—and we know that pensioners have found it difficult—how are people on Newstart living? How are they managing to survive? How will they manage to survive when there is this $106 difference? They will not be able to. They will be living in poverty, just as single parents will be living in poverty. It is not good enough. I move:

At the end of the motion, add:

but the Senate considers that:

             (a)    the pension rate increases in this bill should be extended to the parenting payment single rate and to all recipients of the disability support pension including those who are under age 21 without children, who have been excluded from the rate increase; and

             (b)    the rate of Newstart Allowance should be increased to equal the pension rate.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I want to contribute a little bit to this debate, particularly on account of the fact that I was able to participate in part of the all too brief inquiry by the Community Affairs Legislation Committee into the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009.

My colleagues and I acknowledge a certain inevitability about aspects of this legislation. Certain elements of the legislation are welcome and represent the identification of issues within welfare policy which need to be updated. In other respects the bill represents a sad reflection on the changing nature of our society and our need to adjust our expectations as a society on account of, in particular, the ageing of that society. I will come to those issues in a moment.

As I indicated, there are a number of elements of this legislation which deserve to be supported and which reflect the way in which our system has worked. I am particularly happy to see the government’s decision to increase the base rate of the single pension by $30 per week and the increase in other pensions that accompany that increase, with the exception of the sole parent pension. It is a tribute to the former Leader of the Opposition, Dr Brendan Nelson, who campaigned so long and hard for there to be an increase in the age pension, particularly the single age pension, that the government has responded as it has to this issue.

Although senators in this place and others in other places during the course of this debate have criticised the coalition for its supposed lack of action in this area, I note that what the government has done in this area represents a relatively small step towards consolidating the financial position of those on an age pension, particularly single pensioners. Its funding increase for those on couple pensions, given the other adjustments made in the nature of the pension, could hardly be called much of an advance at all, to be frank. In the light of other budget measures, particularly those affecting private health insurance, on which so many senior Australians rely, one would have to wonder whether the net position of many people on an age pension has actually improved as a result of this measure. I nonetheless welcome it because we are at a point where the plight of older Australians and their relative lack of buying power compared with the past needs to be acknowledged. I have long argued that pensioners should be allocated better funding, and that was reflected in the work of the report of the Senate Standing Committee on Community Affairs, brought down last year, on living standards among older Australians. In that report there is a pointer to other work that needs to be done by the government to address the issue of poverty in later years in life.

As recently as September last year, the coalition called very consistently for recognition of the plight of the single pensioner and in fact it put forward legislation in this chamber to do just that. The government did not proceed with that legislation at that time. It preferred its own approach to this question. While the coalition welcomes the long overdue changes to pension rates, I note how bitterly the previous bill was opposed by the Labor government, even though its objective was very similar to this aspect of the present legislation. Had that bill passed, many senior Australians would have already received over $1,000 in additional income. It is unfortunate that, in order to take its own approach to this matter, that benefit to older Australians has had to be denied. So, better late than never; but this is not the end of the exercise that we need to undertake to address poverty amongst older Australians.

As of later this year, the pension income test taper rate will increase from 40c to 50c for each dollar of income over the income-test-free area. Under the new rules, where a pensioner has ordinary income over the income-test-free area, their rate of pension will reduce by 50c for each dollar of income above the free area. The legislation consolidates the various existing supplements and allowances paid to pensioners—that is why it is not always easy to discern what is going on in this respect—and then it increases them to some degree. It increases them by a little over $2 in the case of single pensioners and by over $10 in the case of couple pensioners. Any measure to reduce complexity and improve efficiency is certainly welcomed, particularly where it concerns pensioners, who often have to deal with multiple departments and services in order to conduct their day-to-day affairs.

I do reserve some concern for the replacement of the former government’s Pension Bonus Scheme with a new work bonus scheme. As a matter of course and necessity, it has been part of the public discourse to create options for those at retirement age to continue to participate in the workforce. The former coalition government scheme provided a lump sum of up to $30,000 to pension eligible people who opted to delay their retirement. Mr Abbott, in the other place, pointed out on Tuesday that the former scheme was not as widely used as originally anticipated, so there is some basis to look at reform. My hope is that the arrangements proposed by the government are more widely accepted and used by those who are willing and wanting to work past what might otherwise be their retirement age. Of note is that the bill is providing for an immediate rather than deferred benefit which, particularly in today’s economic climate, may provide more of an incentive to older people to continue working.

Where my concern arises is the potential to perceive this scheme as a way to force continued employment rather than encourage or incentivise it. This goes hand in hand with the other, perhaps most problematic, part of the legislation, which is the decision to raise the pension eligibility age from 65 to 67, phased in from 2017 to 2023. The arguments in favour of this have been well rehearsed and I think do provide a certain demographic compulsion to go down this path. The pension age was set at 65 back in 1908, when life expectancy at birth was under 60 years. Today life expectancy at birth is over 80 years. In 1908 someone who was 65 years old could expect to live a further 11 years. Today someone who is 65 years old can expect to live for a further 19 years. It is anticipated that life expectancies will continue to rise in the immediate future.

Having said that, there are a number of comments that need to be made about this reform. First of all, it needs to be recorded that the government sprang this policy on the Australian community without any warning. It is a major change—a change that you could argue is necessary to engineer but one that you would think a government that wants to engineer a program like Operation Sunlight would care to put in its published election policies. Some might say, ‘Well, the government is facing dire economic times and needs to make some hard decisions.’ We on this side of the chamber have certainly agreed with that assumption to some degree, but we also point out that the changes the government has engineered to the age pension do not begin to have an effect on the financial bottom line of the government until 2017, when I think we would all hope the global financial crisis has ended. Certainly, we hope that it will have ended by 2023. So this is not the product of the immediate financial crisis that the government faces, that the world faces. This is a piece of engineering which the government could and should have forecast and put up in black and white before the last federal election. They have not been honest and open with the Australian people on this issue. At the very least, they should certainly have released the Harmer pension review report well before the budget to enable proper public consultation and discussion to occur about changes of this kind.

Our primary concern, obviously the government’s primary concern as well, should be to ensure that there is a strong safety net for those who are unable to continue to remain in the workforce. It was confirmed at budget estimates on 2 June that around 130,000 people each year will have to work longer in a workforce that is hardly suited, at the present time at least, or equipped to provide for senior Australians. It is always difficult for people over the age of 60 to make transitions in the workforce from one kind of job to another or to find a new job if one disappears. Notwithstanding legislation to ban age discrimination, it is true that older Australians face many barriers. Yet we are expecting 130,000 more people to be out in the workforce as a result of these arrangements.

The second comment that needs to be made is that I suppose Australians have been conditioned to an inevitable and irresistible uplift in standards of living. We have certainly experienced that almost continuously and without break from at least the time of the Second World War. The older generation of Australians who lived before that time were used to a measure of privation and hardship but, through their hard work, they have been able to bequeath to younger Australians a growth in their standard of living. There is a little irony here that that will be in some way compromised because of this decision.

Having said all of that, we acknowledge that there is a demographic irresistibility about this change. The intergenerational reports commissioned by the former coalition government identified the ageing workforce and the potential issues it would raise in the near future. At this time there are approximately five workers for every one person dependent upon social security. By 2040, without policy change, there will be just 2½ workers for every one person dependent on the taxpayer. That is an issue that we simply cannot walk away from. We need to encourage, facilitate and incentivise older Australians to see themselves as having a role to play in the workforce—certainly, if not in the paid workforce, as volunteers if they are capable of doing that. I would like to have seen more carrots than sticks in these arrangements, but that is apparently not to be.

I might add that I am very pleased that the government has also decided not to proceed with the measure announced, I think, in last year’s budget to include gross tax-free superannuation pension income in the income test for the Commonwealth seniors health card. That was widely seen as a retrograde step that attacked the living standards of self-funded retirees. Thanks to the pressure placed by my coalition colleagues and me and by seniors groups and other increasingly forceful advocates for this part of the electorate, the government has accepted that its proposals were wrong and has now quietly withdrawn them in this year’s budget. Now only income that is salary-sacrificed into superannuation will be included in the income test for the Commonwealth seniors health card. There are a number of downstream issues arising from the government’s decisions on the eligibility age for the pension as far as superannuation is concerned which the government has not, I think, fully addressed as yet, but on this side of the chamber we will be more than willing to draw those issues to their attention and see that they are addressed in a comprehensive way that does not disadvantage those Australians who fund their own retirement.

I want to close by acknowledging that we need to engineer a strong and vital dialogue with older Australians, including those on pensions, and to try to bring them into our confidence with changes that we in this place and in the parliament see it as necessary to engineer to reflect the changing demographics of Australian society. It is unfortunate in the extreme that, on budget night, many Australians in their mid-50s and younger were told, without any previous telegraphing of this decision, that they would be expected to work longer. It is suggested that some can make new arrangements based on the fact that they have been given this advanced warning about the increase in the age pension age, but that will be more theoretical than real for many older Australians. It is a necessary decision but one that, I would have to say, all of us would have to support with some misgivings. I hope that we can engineer other changes affecting older Australians in the future with a great deal more consultation and inclusion as part of the democratic process.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

In almost all cultures across the globe, there is an enormous emphasis placed on respecting the elderly. The younger generations understand that the benefits and luxuries which they presently enjoy and take for granted are built on the hard work of, and sacrifices made by, those older than them. As the Chinese saying goes, ‘Raise your children to care for the elderly.’ Just as the younger generations were cared for by the older generations when they were young, so too is it incumbent on them to care for the elderly when they grow old. But, for all of our great achievements as a nation, we fall hopelessly short on looking after our pensioners. All too often in our country, those who cease to be productive members of the workforce are considered to be a costly and burdensome expense rather than a wealth of knowledge and wisdom to be treasured.

Nowhere is this more evident than in the pension reforms announced by the Rudd government in this year’s budget and contained in the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009. Australian pensioners asked for a tiny increase of $30 a week, hardly an outrageous request by anyone’s standards. Certainly this did not seem unreasonable when the government had no issue in granting its politicians a $90 per week increase in the electoral allowance. However, the government has come up hopelessly short. While this bill does go some way towards fulfilling a promise to Australia’s long-suffering pensioners that their dire position will improve, it is really only single pensioners who have been looked after. Married pensioners have missed out yet again. They have been given a token increase of $5.07 each a week. That will barely get them a loaf of bread and a litre of milk. It will do nothing to alleviate their financial stress or go towards helping them make ends meet. What this really is is hush money. It is a pathetic $5.07 per week in hush money so that our nation’s elderly do not rally again publicly, as they did last year, and demand proper treatment from the government of the day. It is pathetic, and we owe it to our pensioners to call this $5.07 per week what it really is: pathetic.

There seems to be a misconception with this government that married pensioners share a home so living for them must be easier, or cheaper. Is it cheaper to shop for two? Is it cheaper to cook for two? Try telling that to Vin and Shirley Grant, a married couple from Glenroy who rely on the government pension to survive. I have spoken with them on numerous occasions and even protested together with them in the Melbourne CBD. I have heard firsthand how tough it is to live off the married pension. They are just one example amongst hundreds of thousands across Australia who are forced to scrape together every cent just to pay the bills each month. Perhaps the Treasurer should have spoken to them before he hurriedly threw together a bill which ignored their plight.

The Rudd government is sending pensioners a clear message here, and it is a disgraceful message—that you are better off getting divorced and becoming a single pensioner if you want to survive under this budget. Stay together as a husband and wife and get an extra $5.07 per week or get divorced and collect six times that amount—$32.49 per week each. For a government that boasts how well it supports working families, this is the most antifamily policy there could be. It is all the more disgraceful given that this is the same government that refuses to put an end to the excessive superannuation entitlements of our politicians—a rort which costs our country millions of dollars in taxpayers’ money each year. So, while the Treasurer will walk away from parliament one day with a pension of more than $100,000 per year for the rest of his life, he asks our married pensioners to get by on a tiny pension that now includes a measly $5.07 extra per week.

Last year, in May, the Treasurer stood before parliament and declared that the new budget would deliver Australia a $21.7 billion surplus. Instead, one year later, Australians were left to digest the shocking news that this forecast budget surplus had been replaced with a $57 billion budget deficit. I do not blame the Treasurer entirely for the sharp turnaround of events. I understand that this deficit was largely a result of matters outside the government’s control. However, I do want to highlight one point. One year ago, when everything was looking rosy, when businesses were booming and tax revenues were flowing into the government’s coffers, one group was still missing out: our pensioners. At a time when Australia looked set to reap in $21.7 billion, the government could not even find the money then to help Australia’s ageing population. Our pensioners were forced to stand outside Flinders Street Station and take their tops off in front of everyone just to have their voices heard. I think this sums up quite clearly where our pensioners sit in the eyes of the Rudd government—way down at the bottom of the list. This is the same government which in the very same budget speech declared:

Foremost in our considerations are the Australians who work hard, pay their taxes, and demand little more than a fair go.

Mr Prime Minister, our pensioners are these very people that your government speaks of. They are the ones who have worked hard over the years, paid their taxes to support each and every one of us and now stand before us and ask us to treat them with the decency which they deserve. A higher pension payment is, therefore, not simply a monetary question. It is a question of morality. It is about what is right and what is fair. How we treat our pensioners sends a message to our children about how we expect to be treated one day. It sends a message of how much we value our older Australians. Let me tell you, the message we are sending at the moment is not good. Family First want the government to deliver on its promise of real pension reform—pension reform which goes towards helping everyone, both single and married pensioners. Of course Family First will support this bill, but we will keep on fighting for our married pensioners until this message is heard loud and clear by the government.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

On behalf of the coalition, I welcome this excellent but belated increase in pension rates. I think we could safely say that we have had sufficient evidence through a number of the inquiries that the Senate Standing Committee on Community Affairs has been involved in that the costs for a single pensioner are not 50 per cent of the costs for a pensioner couple. There are all manner of costs such as rent and rates which are not a straight halving of what it costs a pensioner couple to survive. I certainly think that the increases in the single pensioner rate are long overdue. In fact, we in the coalition tried to get the government to see the sense of doing this in the middle of last year. The Senate accepted our changes but the House of Representatives of course rejected them.

As at December 2008 there were 2,070,300 recipients of the age pension, and 64 per cent of those people aged between 65 and 69 received a full or part age pension. This increase has been campaigned for long and hard and it has finally and belatedly arrived. The coalition is very pleased to see that this has happened. However, we do have some concerns about the legislation that is being put through. We were told by Ms Clare Martin from the Australian Council of Social Service, for instance, that the scheme now proposed is less equitable and more complex than it was before. So much for the use of the word ‘reform’ in terms of the pension—we get an increase but we get a mess. Ms Martin said:

What we have got now in terms of a social security system is four levels of payment.

We have a level of payment for the pensioners, who are getting the terrific increase of $32.50 a week. That is for the aged, carers, and disability support and veterans affairs recipients. They will be roughly on a level of about $330 a week, including the supplements that they get. But that leaves sole parents $47 behind, it leaves your average Newstart recipient $106 behind and it leaves those on youth allowance or Austudy $147 a week behind. So much for reform.

We are particularly concerned that sole parents have been left off this list of pensioners. It is the first time that the connection has been broken between pensions available to sole parents and pensions available to age pensioners. It is very concerning that perhaps this nexus will remain broken, that single parents are about to fall well behind. The National Welfare Rights Network has said:

This exclusion is perhaps the most significant assault on the payment conditions for sole parents in the last 35 years. NWRN was shocked at the decision to exclude sole parents and cannot see any justification for the government to sever the tie between the rates paid to age pensioners and those on parenting payments.

They point out that this snub undermines the financial security of hundreds of thousands of Australia’s poorest families, which include 400,000 sole parents and their 600,000 children. These people now must wait, as age pensioners had to wait, for the government to make their next move. But how long will they have to wait? It is not reasonable that the single parents, who are among the most vulnerable groups in our community and the ones who can most easily fall through the cracks into homelessness, are the ones who are being forced now to wait.

I would also like to mention briefly the government’s change to the pension age. This is supported pragmatically by the coalition. The pension age must increase simply because of the ageing of the community. There is no option on this. But the never-never scheme to start in 2017, completing the exercise by 2023, leaves the current Prime Minister and others well away from being ever called to account for how this pans out. We have had a number of comments from many working groups, including some unions, about the difficulties faced by people, particularly those who have done hard physical work all their life, needing to work for two more years until age 67. It was interesting to note during the inquiry that we conducted on this that we heard that half the people who go onto age pensions are coming from some other form of income support. So it is quite likely that people who have worked hard physically all their life are, by the time they get to 65, working part-time; they may be on workers comp; unfortunately, some of them might even be on disability support pension because of the way their bodies reacted to their very hard working life.

During the inquiry the community affairs committee conducted into this legislation we received one witness in person from the liquor and hospitality union and we received one submission from the ACTU, which consists of about 1½ pages. Admittedly this inquiry was called very quickly, but many of the groups, such as ACOSS, Uniting Care, National Seniors and Australian Independent Retirees, managed to put in substantial submissions setting out their case for how things should be improved in the areas of their concern. From the ACTU we received 1½ pages. It mentions the reality of the diversity of the workforce experience of Australian working men and women, meaning that many workers are unable to continue working until retirement age. I appreciate that there is a group that we certainly need to develop some flexibility for in this area, the people who have worked hard manually all their lives, but I have yet to see support in any meaningful way for that given the very minor submissions presented to the inquiry on this legislation by the ACTU and others.

I would also like to raise the question of the changes to the taper rate that were proposed in this legislation. As you may be aware, Madam Acting Deputy President Troeth, this legislation would increase the pension income test taper rate from 40c to 50c for every dollar of income earned over the threshold of $138 per fortnight for single pensioners and $240 per fortnight for pensioner couples. If you listened to the government, you would think that everything is hunky-dory because there is a grandfathering clause included in this, suggesting that people who currently are subject to the 40c taper rate will not be adversely affected and will be allowed to stay on that until they got to the situation of being better off under the 50c taper rate. The suggestion is that this might go on for years and years. However, when you look at the evidence given to the community affairs committee inquiry into this, it tells a different story. It points out that many people are on part pensions; that this will be indexed only according to CPI, not according to CPI and MTAWE, as other pensions and the pension supplements are, so that people will gradually fall behind; and that it does not take into account also the fact that people are moving on and off pensions—particularly part pensions, of course—at a fairly consistent rate. Because of investments, people continue to need to either top up their income with a part pension or, because their investments improve—

Debate interrupted.