Terri Butler (Griffith, Australian Labor Party) Share this | Hansard source

I rise to speak on the Social Services Legislation Amendment (Defined Benefit Income Streams) Bill 2015 before the House today, which covers the social security treatment of defined benefit streams. Today's bill relates to that specific issue. It will cap the deductible amount from the pension income test at 10 per cent.

Labor does not like this bill but we understand that in tough economic times we must make tough economic decisions. And these are tough economic times, because this government in less than two years has absolutely smashed the Australian economy. They have doubled the deficit in the federal budget. They have overseen an economy in which unemployment went above six per cent—it is still has a number with a six in front of it, which is a disgrace. Unemployment is higher than at the height of the global financial crisis. This is the highest unemployment that we have had in a decade—in fact, the last time unemployment was as high as it has been under this government was when Tony Abbott was the employment minister.

So unemployment is up, and confidence is down. And why is confidence is down? Last year's federal budget was an absolute disgrace. It was a federal budget that smashed confidence, smashed household and consumer confidence, and smashed business confidence. And we know that wages are at their slowest growth in the period since the wages price index started being kept in the late 1990s. It is clear that the economy is in a very poor state at the moment as a consequence of the decisions of this government and the cuts that they sought to make in last year's federal budget and this year's federal budget. So we accept that these are tough economic times as a consequence of the disgraceful mismanagement of this appalling government.

But we will not oppose the passage of this measure today. We will do this very reluctantly, but let me make one thing very clear, as the shadow minister has, Labor will keep standing up for pensioners. Labor will keep standing up for pensioners, as we have done for the entire period of this terrible federal government, this Abbott Liberal-National government, and as we did when we were in government. When we were in government, Labor did not take an axe to the pension—in fact, Labor looked at the age pension and said, 'We can do better as a nation to support the retirement incomes of people who have worked in this nation their whole lives and who deserve dignity in retirement.'

Under Labor in 2009 there was a review of retirement incomes, and we looked at the way the pension was indexed and we said, 'You know what? The pension needs to do a couple of things. It needs to keep up with the cost-of-living changes for pensioners, and it also needs to keep up with community standards and community increases in living standards.' So, in addition to the traditional CPI indexation for the pension, we looked at indexation and we changed the law so that the pension would be indexed by the greater of the CPI or an index that was specific to pensioners, called the pensioner and beneficiary living cost index.

We also looked at the benchmarking against male total average weekly earnings and we increased the benchmarking to 27½ per cent. That was a double indexation arrangement, where you took the higher of the two indices and then, to make sure that the pension was also keeping up with living standards, it was benchmarked against male total average weekly earnings.

Of course, what was one of the first things that the Abbott government did when they got into office? In their first budget they decided to try and slash the indexation of pensions. It would have been an $80 per week cut to the pension over a decade. It would have seen cuts to the pension that would have seen the pension decline from 28 per cent of average weekly earnings down to just 16 per cent. Of course we opposed these cuts; we will always stand up for the age pension and for age pensioners. We opposed them for the entire period, since they were announced in last year's federal budget.

We worked with seniors groups and other civil society groups around this nation to mount a case against these cuts to the pensions, because these cuts not only flew in the face of fairness but flew in the face of a commitment that Tony Abbott, the now Prime Minister, made prior to the last federal election, in which he promised that there would be no cuts to pensions. That promise was not met. That promise has been broken. That is a terrible thing. And what is more terrible is the fact that Mr Abbott, the Prime Minister, sees the pensioners of Australia as some sort of piggy bank that he can go to—to get money, to take away pensioners' chance at dignity in retirement, and to use those pensioners as a way to seek savings in the federal budget.

As I said, we opposed those cuts to the pensions. We—and the civil society groups and seniors groups who opposed those changes—were successful in our campaign. We were successful in stopping the Abbott government from making those cuts to the pension because they were fundamentally unfair, and we will continue to oppose any of those changes to indexation that the Abbott government sought to make last year.

This year we have seen a new attack on pensioners, a new attempt to make cuts to the pension, when the Liberal Party, the National Party and the Greens teamed up to cut the pension. What a disgrace. Australians now know—if further proof was needed—that the only party committed to protecting pensioners is Labor; the only party committed to protecting pensioners and pensioner living standards is the Australian Labor Party. As I said, the day before the federal election the now Prime Minister promised that there would be no changes to pensions. He also promised that there would be no deals with any Independents or Greens. Both of those promises have since been broken.

What will this new cut to the pension do? Well, within 10 years, more than half of new retirees will be affected by this. Around 330,000 pensioners are set to lose, including 90,000 pensioners who will be kicked off the pension altogether, with single pensioners to lose as much as $8,000 and couples to lose as much as $14,000. As the member for Jagajaga, the shadow minister, said, while the government might claim that all these pensioners are rich, that is just not true. Pensioners with as little less $289,000 in assets will lose out because of this cut. Labor has stood beside Australia's 3 ½ million pensioners to fight Tony Abbott's cuts to pension indexation. We continue to stand up for pensioners.

The seniors group, National Seniors Australia, recognised the importance of what we were doing to stand up for pensioners and to oppose these cuts in their press release of 16 June headed: Seniors welcome Labor's pension stance to protect mid to low income retirees. They welcomed our stance. Just today, National Seniors Australia put out a statement about this new Green's-National-Liberal deal to cut the pension. It is headed: Coalition cuts pensions and turns its back on middle Australia. The press release went on to say:

The Coalition, supported by the Greens, has turned its back on middle Australia with the passage of its $1 billion-a-year pension cuts through the Senate last night.

Michael O'Neill, who is the chief executive of National Seniors, is quoted as saying:

The Coalition’s victory will ring hollow for the several hundred thousand older Australians who have saved and gone without for decades only to see the rules change at retirement,”...

He said:

It is disappointing that these cuts have been sold to the public on the pretext of ending welfare to millionaire retirees in Sydney Harbour homes.

He said:

It is this single old woman living in a little house with moderate savings who will be hit hardest.

He said:

All the experts confirm this. On current deeming rates, her yearly income will be well under $20,000 or several thousand dollars less than that of a full age pensioner.

He went on to give some examples of how people would be affected. He also made the point that in its submission to the Senate Community Affairs Committee, the ANU's Tax and Transfer Policy Institute, an institute of which you would be well aware of, Deputy Speaker Whiteley, confirmed that asset test changes would penalise savers outside of superannuation and create perverse incentives to spend and leave the wealthiest retirees untouched.

He spoke of a single person with a small home and an income of $17,875 per annum, which is 3.25 per cent of the current upper level DSS deeming rate, and with $550,000 in savings would no longer qualify for a part pension. Yet a single person with a small home and no savings would receive the full age pension of around $22,365 a year plus state concessions on rates, utilities and registration. Does that example not demonstrate why National Seniors is taking this strong position that they are against the changes to the pension, the cuts to the pension and the deal between the Greens, the Liberal Party and the Nationals?

The Australian Council of Trade Unions has also spoken out. In a release headed: 'Women and low to middle income earners workers will lose out thanks to Greens pension deal,' the union said:

The Australian Greens have sold out women and low to middle income workers by agreeing to the Abbott Government's cuts to the age pension this week.

Analysis by respected research firm Rice Warner and superannuation experts Industry Super Australia shows those hit the hardest by the Greens - Abbott deal are ordinary workers on low to middle incomes earning $75 000 or below.

In fact, the research reveals that around 80 per cent of single women retiring in 2055 will be disadvantaged.

Even with current superannuation, pension payments and other savings combined, nearly 63 per cent of single women will not be able to retire comfortably through to 2055. These cuts will make this situation even worse.

Single men will also be adversely affected by the cuts, including those currently aged: 55 to 59 years who are earning between $52,000 to $160,000; 45 to 49 years who are earning between $56,000 to $183,000; and 25 to 29 years who are earning around $27,500 to $143,000.

The ACTU quite rightly said:

Combined with the Abbott Government's decision to freeze the 0.5 per cent increase to the superannuation guarantee at last year's Budget, these new measures will deepen social inequity.

And haven't we seen so many new measures that will deepen social inequity under this government? This is a government that—we saw in a leaked green paper the night before last—is considering things like further cuts to schools and hospital funding and has in its leaked green paper some suggestion of means testing of access to public school. You cannot imagine a more reckless government, a more outrageous government than a government that would actually consider the further attacks on public education and public health that this government now seems to be considering—if you go by the leaked green paper. Those are, of course, on top of the $80-billion of cuts in health and education that were in the government's own budget papers in the federal budget announced last year.

This is a government that will stop at nothing to break apart the social contract of this nation. This is a government that will stop at nothing to not take steps to slow the growing inequality that we face in this nation but will actively take steps to increase the inequality in this nation, that will increase the inequality that we have.

As most people across this nation and this globe know, extreme inequality actually slows economic growth. It is not just my view; it is the view of the IMF as well. We all know in this place that we are in a low growth phase globally at the moment. But even taking into account global conditions, the things that this government has done to actively damage Australia's prospects of improving our economic growth are nothing short of economic vandalism. It is a phrase they like to use on us, 'economic vandalism'. But people who are in the coalition who like to say those words about Labor ought to take a good hard look at themselves in the mirror. If you wanted to try to slow growth, if you wanted to make our economic conditions worse then well done on last's federal budget—if you were trying to arrange situations where people were not spending, where people found that their confidence was being smashed, where business confidence was smashed.

If you want a great example of the damage that this government has done to the economy, look at the number of business insolvencies in the past year. Look at the way that small business has been hit by this government. It is running around town talking about the measures that it had in this federal budget about small business. Well, congratulations on finally reversing the axe that you took to the instant asset write-off—Labor's measure. You took an axe to it. What else did we have? We had loss carry-back provisions. We had accelerated depreciation of motor vehicles because Labor, unlike the coalition, which likes to talk a big game in this space, actually understand small businesses. We understand the benefits that unincorporated small businesses need. Let us hope that the greatly belated acknowledgement that this government has now given to small business actually starts to repair some of the damage that its fiscal vandalism caused last year in smashing confidence, stopping people from going out and spending money, and driving unemployment up to above six per cent—as I said, an absolute disgrace—not to mention the immense attacks that we saw on the social fabric of this nation with the cuts to education and the cuts to health.

Deputy Speaker, if you want to find a government that epitomises why Australians lack trust in politicians, just look at the government that we have on the benches at the moment, a government that broke every single promise that it made before the federal election, including the promise not to make any changes to pensions and not to make any changes, for that matter, to superannuation. After the freezing of the SGC, the taking away of the lower income superannuation contribution and now this new attack on pensions, these new cuts to pensions, it is quite clear that the only party that cares about retirement is Labor. (Time expired)

See this speech in context