Pension Cuts

Speech excerpt:

Full transcript below:

Mr PERRETT (MoretonOpposition Whip) (10:56): I rise to speak on the Social Services Legislation Amendment (Energy Assistance Payment and Pensioner Concession Card) Bill 2017. I commend the member for Shortland for his contribution, even though he has some dubious tastes in football teams! Labor supports this bill. Labor will always support Australians who are doing it tough.

But let us be clear about what this bill really is. It is a mere distraction by the Turnbull government—a mere leisure domain. It is a legislative equivalent of smoke and mirrors. It is the sleazy grin of a snake oil salesman while he fleeces you. Most Australian pensioners are too smart to be taken in by this cheap con trick. Prime Minister Turnbull thinks, seriously, that if he gives pensioners a one-off payment of $75 they will not notice him taking $365 a year from them every year. This is a bad late-night TV ad—you know, 'We'll throw in some matching steak knives, but then we're going to bill you 30 bucks a month forever.' This is shear arrogance coming out of Point Piper and shows a Prime Minister who is simply out of touch.

Despite what he says, Prime Minister Turnbull has no idea about fairness. He can say the word over and over again but never actually feel it. His focus group research says, 'If you can fake fairness, you'll have it made.' Well, Australian pensioners are on to him. How is it fair to expect that pensioners should be thanking the Prime Minister for giving them a $75 one-off payment while, at the same time, trying to cut the energy supplement, which will leave pensioners $365 worse off every year? That is not fair. It is a shocking way to treat Australians who are already doing it tough. We know that. But we should not be surprised. The Liberals have never ever cared about pensioners. People on the age pension have worked hard all their lives and saved hard. They deserve better from our government. Sadly, they are being treated like beggars in the street—expected to be grateful if the government throws a few coins their way. Pensioners will be worse off under the Turnbull government if this legislation goes through. This one-off $75 payment will go nowhere near making up for the axing of the energy supplement. As I said, that will cost pensioners $365 every year.

We know that there is no fat when it comes to pensioners' lifestyle. The pension payment does not allow for a lavish lifestyle at all. It barely covers the necessities of life. I remember doorknocking a couple of pensioners last year in the lead-up to the election. I remember one guy in Tarragindi in particular. He was saying how he only turned his hot water system on every couple of days. Brisbane winters are not the same as Canberra winters; nevertheless, it broke my heart to think that a guy who had worked hard all his life had to make decisions like that. And $365 a year less is an awful lot when you are living that sort of lifestyle on a pension. It can be the difference between being able to have an extra blanket in winter or going cold; the difference between eating a healthy diet of good quality, fresh food or eating the cheap and nasty stuff; the difference between leaving your home or becoming a hermit. Every cent matters to pensioners.

Labor understands this. It was Labor who first introduced the pension system into the Australian parliament. There was no social security system in Australia at the beginning of the 20th century. People who needed assistance relied on charitable relief by voluntary organisations—in some cases, with the benefit of government grants. So there was basically no social safety net. The sick poor or neglected children, old people who were destitute and women who had been deserted or had fallen pregnant were the most in need of the limited charitable assistance. The unemployed were assisted by grants of wages or rations in return for relief work provided by the government of the day.

In 1909 it was a Labor government that created our pension system, only eight years after Federation. In June 1908, Labor exercised the power granted to the Commonwealth upon Federation to legislate in respect of age and invalid pensions. Labor introduced means tested, flat rate age and invalid pensions. These new pensions, which were financed from general revenue, came into operation in July 1909 and December 1910 under Andrew Fisher's Labor government. The new pension was paid to men from age 65; it was paid to women from age 60, but not until December 1910.

Obviously, there have been many changes in Australia since 1910. The population has expanded. Our standard of living has improved. Our health care has improved—to a large extent, due to another Labor initiative, Medibank, and then Medicare. Our life expectancy has increased: a baby boy born in 1910 had a life expectancy of only 55.2 years, but a baby boy born in 2015 has a life expectancy of 80.4 years and a baby girl even longer. People live longer, and the period of time beyond their working life has increased. It now costs more to sustain a person beyond their working life, and there are many reasons why people have not accumulated enough savings to carry them through.

Compulsory superannuation was introduced by the Paul Keating government in July 1992. Prior to that, unless you had an income substantial enough to allow you to create a nest egg—and, sadly, there were many people, and families in particular, that could not—you were destined to eventually be on a pension after retirement. It was how the system worked, prior to compulsory superannuation. Every worker paid taxes, and that allowed the government to look after those who could not afford to adequately look after themselves in retirement. People worked hard and saved hard, but that did not always guarantee that they would have enough money to see them through their autumn years when they could no longer work. So that is why Labor introduced compulsory superannuation.

The superannuation guarantee system was part of a major reform package addressing Australia's retirement income policies and challenges. Labor, in a visionary way, correctly anticipated that there would be a major demographic shift in the coming decades that would result in an increase in age pension payments and would place an unaffordable strain on the Australian economy—particularly as the baby boomers made that transition. Labor introduced a three-pillars approach: a safety net, consisting of a means tested government age pension system; private savings, generated through compulsory contributions to superannuation; and then voluntary savings, through superannuation and other investments. The superannuation guarantee is a great system, and this nation now has the third-biggest managed fund in the world: $2.2 trillion and rising—not bad for a small nation of only 23 million people.

But we need to remember that compulsory superannuation was not available until 1992. So people reaching their current retirement age of 65 this year were already 40 when the superannuation guarantee came in, so half of their working life had already passed. People who are currently receiving the age pension have had even less working life to accumulate superannuation. There are other reasons people may not have been able to accumulate enough superannuation to see them through their retirement years—for example, people may not have had steady employment during their working life; women may have taken time out of the workforce to care for their families and raise children; workers perhaps have been in sectors transformed by the digital revolution and changes in manufacturing and the like. So it is very arrogant of a government to assume that everyone has had the opportunity to accumulate enough superannuation to set up a Cayman Islands account and will be able to live comfortably in retirement. A good government understands this. But most pensioners, including past pensioners, would consider 'living comfortably' as being able to afford safe, secure housing, to eat nutritious food and to occasionally be able to see family and friends. These are things that most Australians would think every person in our lucky country has the right to enjoy, especially after 25 years of uninterrupted growth and economic success.

There is absolutely no doubt that the Superannuation Guarantee was a great Labor policy success; it was a solution to a problem that was identified. Through Labor's initiative, Australians have accumulated more than $2.2 trillion—and rising—in superannuation assets. Of course, that balance sheet would look a whole lot better if the Howard government had not abandoned the Keating government's 15 per cent Superannuation Guarantee way back in 1996. That myopic decision has cost the average Australian worker about $250,000 in accumulated superannuation. The government's decision to abandon the previous Labor government's Superannuation Guarantee rise to 12 per cent has further eroded the future retirement savings of Australians. Compulsory superannuation contributions have been frozen by the Abbott-Turnbull government at 9.5 per cent until 2021.

The Labor architect of the Superannuation Guarantee, former Prime Minister Paul Keating, has described that decision by the coalition government as representing 'nothing other than the wilful sabotage of the nation's universal savings scheme, and sabotage for reasons only of prejudice'. We can also see it in the coalition's misguided attempts on industry funds, which are outperforming the retail funds; it is certainly very short sighted.

The three pillared approach introduced by the Keating Labor government, vandalised by the Howard government and further undermined by the Abbott-Turnbull government is now a very wobbly tripod indeed. By way of confirmation that the Turnbull government is completely out of touch, a government that fundamentally does not understand pensions, it wants to increase the pension age to 70. That might be fine if you are a barrister, but it is a lot tougher if you are a brickies labourer, a nurse or someone who uses their body for lifting and the like. The Finance Minister confirmed in Senate estimates last week that increasing the pension age to 70 is 'a measure they remain committed to'. He said it remained government policy. If that occurs, Australia will have the oldest pension age in the developed world. Builders, tradies, nurses and farmers would have to continue doing what is sometimes backbreaking work until they are 70 before they would be eligible for the age pension. This policy shows a complete disconnect between the government and ordinary working Australians.

Sadly, we have seen this before with the Turnbull government. This bill will reinstate the pensioner concession cards to some former pensioners who became ineligible for the cards after the changes to the pension assets test. This will correct what was a bungle by a government who does not understand the pension system and does not fundamentally understand or care about pensioners. Joe Hockey, the former Treasurer, told Australians that 'anyone who currently has a pensioner concession card will continue to receive a concession card that provides the same benefits'. That was a quote from the cigar-smoking Treasurer. Sadly, it was not true; it was a lie. It was up there with the Medicare safety net commitment. Remember that rock-solid, ironclad guarantee given by the former Health Minister Abbott, now the Banquo of the backbench? It was not the truth, according to the former Treasurer. Former pensioners were issued with health care cards and Commonwealth seniors cards, which did not provide the same benefits. Former pensioners were no longer able to access vital government funded hearing services. Former pensioners, who are living on modest means, suffered a cruel blow with the loss of benefits. Finally realising the error of their policy, they have now reinstated those pensioner concession cards to those that ceased to be eligible for those cards. We should be thankful for small mercies, I guess, but it does not change the fact that the Turnbull government does not understand pensions or pensioners, does not care about then and perhaps never has.

In 2014 the Liberals tried to cut pension indexation and leave pensioners $80 a week poorer over 10 years. The Liberals tried to reset the deeming rate thresholds. That would have had a devastating impact on half a million part pensioners. The Liberals changed the assets test and almost 100,000 retirees lost their pension and many more had their payments reduced. The Liberals tried to prevent pensioner retirees from travelling overseas for more than six weeks to spend time with their families overseas. The member for Warringah promised in 2013 before the election that there would be no changes to the pension. We could not trust his government then and we still cannot trust the person responsible for the coup that removed that Prime Minister. If the Turnbull government thinks they will get away with it, they will make cuts to the pension in an instant. Pensioners and Labor are awake to them and we will not let pensioners be treated with contempt.

Labor understands pensions. Labor fundamentally understands fairness. It is in our DNA. It was Labor that created our pension system in 1909 and built universal superannuation in 1992. Labor has not stopped there. In terms of pension reforms, between September 2009 and 2013 there was an increase in the maximum rate of pension of around $207 per fortnight for singles and $236 per fortnight for couples combined. That was a Labor initiative. It is Labor that will continue to protect retirement income for all Australians and ensure the financial security of older Australians. Labor understands that pensioners have worked hard all their lives and have contributed so much to make this country great. Australian pensioners deserve the dignity of a decent retirement. They do not deserve to be betrayed and made to feel like a burden by the Liberal Party and Prime Minister Turnbull. We have made it clear that Labor will continue to fight for Australian pensioners and oppose any attacks by this uncaring, out of touch government.

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