Amanda Rishworth (Kingston, Australian Labor Party) Share this | Hansard source

This motion on the indexation of British pensions is in essence about fairness. This motion recognises the significant impact of the British government's refusal to index British pensions that have been allocated to British expatriates living in Australia under the United Kingdom's National Insurance Fund. I have raised this issue previously in the parliament. It affects many people in my electorate. I will continue, and I am pleased to see that government ministers have continued, to bring this to the attention of this parliament and indeed the British government.

The 2011 census shows that around 14 per cent of my constituents were born in the United Kingdom. Since I have been elected I have on numerous occasions had residents in my community raise this as an issue. I distributed a survey in 2007 and received an overwhelming response from well over 500 local residents. They said that they believe that the British government continues to fail them in failing to index their pensions and that this is unfair and discriminatory.

As you would know, indexation ensures that the amount received in real terms remains the same over time, accommodating increases in inflation and cost of living. The failure of the British government to index the pension payments of British expatriates living in Australia means that indexation ceases from the point of migration to Australia, so those who migrated to Australia some years—or even decades—ago have been severely affected. As a result of the ever-decreasing buying power of their frozen pensions, some pensioners have not been able to keep up with rises in the cost of living and must rely either on their dwindling savings or on means-tested assistance provided by the Australian government where available.

The UK government's policy has resulted in the erosion of the purchasing power of pensions of more than 250,000 British pensioners living in Australia. I have heard many stories in my local community and in the broader Australian community about the effect this considerable erosion is having on quality of life for affected pensioners. In particular, I refer to Mr Kenneth Ball of Christies Beach in my electorate. He tells me that he receives £42.26 while his wife, Frieda Ball, receives £25.27 pence per week. This is of course exactly the same amount Mr and Mrs Ball received when they first became eligible for the pension in 1995. Mr and Mrs Ball feel they are being treated unfairly, given that they paid into the national pension fund just like every other Briton who is living and working over there. But now, while other pensioners who continue to reside in Britain—and indeed, many countries around the world—have had their entitlements indexed so that in real terms they remain the same, the Balls have been denied this. The impact is most significant of course for those who emigrated some time ago. For example, for residents who emigrated 20 years ago upon retirement, the pension at that time was around £54 a week. That would now have been over £100 per week if it had been properly indexed.

One might ask: why is this unfair? These people have, after all, decided to emigrate to Australia. There are two main reasons why the failure of the British government to index the British pension is unfair and discriminatory. First, it is important to recognise that these British pensioners paid into the National Insurance Fund of the UK, which operates more like a superannuation account than the sort of pension system we are familiar with in this country. It requires compulsory payments from the salaries of workers in exchange for an allocated pension upon retirement. All British pensioners pay into the National Insurance Fund under the same rules. So equity demands that they should be treated the same—that their pensions should now be allocated under the same conditions, regardless of where they choose to live. Instead, the reality for some British expatriates is that they do not receive the full benefits they deserve, despite having contributed throughout their working lives both to this scheme and to the British nation.

Second, the UK government's current policy of not indexing the pensions of British expatriates living in Australia discriminates in its treatment of expatriate pensioners on the basis of the country they reside in. Regular increases in line with inflation and cost of living are made to the pensions of British expatriates living in numerous countries, including the United States of America and the European Union. But pensions are frozen in most former Commonwealth countries, including Australia, Canada, New Zealand and South Africa. This means that British expatriates who choose to retire in Australia are disadvantaged. Their entitlements are less than those of British expatriates who choose to retire somewhere else in the world. They are not, therefore, only at a disadvantage when compared with British pensioners who continue to reside in the UK but also when compared with British pensioners who have decided to retire in a country which is not subject to the frozen pension policy.

Through our own pension system, the Australian government does provide more than $100 million each year to recipients of the UK pension who are living in this country to help supplement the shortfall created by the frozen pension policy of the UK government. This is a significant burden for taxpayers, who would not have to carry it if the British expatriates living in Australia were given the pension they deserve. I know that the Australian government has over recent years repeatedly requested that the UK government reconsider its frozen pension policy, to ensure that there is fairness for British expatriates living in this country and also to bring an end to this situation where Australian taxpayers are forced to meet the shortfall—really created by the United Kingdom government.

I would like to take this opportunity to commend Minister Jenny Macklin, who I know has been a long-standing advocate of this issue. She has raised this matter most recently during her meeting with the UK Secretary of State for Work and Pensions. I would also like to recognise the continuing efforts of Minister Bob Carr, our foreign minister, who has taken up the task of lobbying for pensions for British expatriates living here in Australia to be fully indexed, including by meeting his counterpart in the UK government earlier this year to put what I know he feels is a very strong case for this discriminatory policy to be reconsidered.

This motion does a number of things. It firstly and importantly recognises the problem and the effect that it really does have, which is widespread, as I mentioned: 250,000 people who are affected. It also acknowledges the impact that it has on the Australian government, which does have to pick up the tab when it comes to this issue. Importantly, I think that that needs to be recognised.

It also acknowledges the ongoing efforts of the federal Labor government in making repeated representations and calling for the issue of frozen pensions to be addressed. Indeed, it commends Minister Macklin for her most recent efforts in raising it with the UK Secretary of State for Work and Pensions. We hope that he actually does look at this very seriously. Finally, and importantly, it calls on the United Kingdom government to treat recipients of a UK pension equitably by indexing entitlements fairly, regardless of where they choose to retire.

I hope that this motion will be supported across the House. While I believe that the government has been making very, very good progress in raising this issue, I do believe that we need to provide a united front here. I really do hope that I get the support of the parliament because it would certainly back up the efforts of Minister Carr and Minister Macklin in ensuring that we do get equity and fairness within this.

I know that the British pensioners themselves have not been silent on this. There are a number of organisations around Australia which are really fighting for this justice. I know that they went to a number of international courts to try and get fairness and justice. Unfortunately, they were not able to succeed. But I think it is incumbent on this parliament and incumbent on this government, as well as on other governments in the future, to continue to push this issue until fairness and equality is afforded to British pensioners around this country.

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