Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Hansard source

As the minister has just indicated, this bill relates to specific social security treatment of defined benefits and will cap the deductible amount from the pension income test at 10 per cent. The information provided indicates that there are 48,000 pensioners on defined benefit schemes. As I understand it, most people claim less than 10 per cent. Only 17,000 people will be affected by this change.

As the explanatory memorandum of the bill explains, this bill ensures that a proportion of a superannuant's actual defined benefit income is taken into account when applying the social security income test. As the minister indicated, from 1 January the deductible amount, which is the amount that can be excluded from the income test for a defined income benefit stream, excluding military defined benefit schemes, will be capped at a maximum of 10 per cent. As I indicated, the vast majority of people with defined benefit income streams actually already claim less than 10 per cent, so it is only a minority of people in these circumstances who will be affected by this change.

It is the case that these defined benefit income streams usually come from employer superannuation funds or government employee superannuation schemes. The change that is being effected emerges from amendments that were put in place in 2007 that did result in an increase to the tax-free component for some individuals. This has the effect of increasing the deductible amount for the purpose of the Social Security Act, resulting in individuals becoming entitled to income support payments or higher rates of income support.

These are difficult decisions, certainly for those of us who are very concerned about this government's attack on pensioners, but we do understand that these are very difficult economic times. The minister tries to make out that the economic situation under this government is rosy. In fact, as the government's own budget papers show, the government, in less than two years, has doubled the deficit, and unemployment is up and confidence is down. So we actually find that the economic circumstances that this government is imposing on Australia are becoming more difficult, just as they are becoming more difficult for the millions of Australian pensioners who have been subjected to the most horrific attack by this government over the last 18 months. This change to the social security treatment of defined benefit schemes is just the latest change.

We all recall that, before the last election, the then Leader of the Opposition, Mr Abbott, said to every single pensioner in Australia that there would be no changes to pensions, no changes whatsoever. Of course, in last year's budget that was found to be a complete untruth, when the Liberal-National Party government introduced the most substantial attack on the pension that Australia has ever seen. This government wanted to cut the indexation rate for the pension. It anticipated cutting over $23 billion from the pension over the next 10 years. This would have taken around $80 a week from pensioners—so a huge cut to pensions and a huge amount that would have been taken out of the pockets of pensioners. We saw the Prime Minister in here every single day in question time defending that cut to the pension that he was determined to try to implement through this parliament. Fortunately, pensioners around the country joined together with Labor and fought this change, and we were able to defeat it in the Senate. I remind every single member of the House of Representatives from the Liberal and National parties that they actually voted for this cut to pension indexation. We will make sure that pensioners remember this as we go to the next election. When Mr Abbott tells pensioners that he is not going to change anything, that he is not going to hurt pensioners, not one of them will believe him, because of the broken promises that pensioners have seen over the last two budgets.

It was not just the change to indexation. The government did not stop there. It realised it could not get that measure through the parliament, so it came into this budget with more changes to the pension. The minister has just indicated that last night in the Senate we saw the Greens party team up with the National Party and the Liberal Party to cut the pension for 330,00 pensioners. These are middle-income Australians, people who have worked hard and saved hard all their lives. As a result of this government's broken promises, these middle-income people—they are by no means millionaires, as the minister likes to suggest; in fact, some of these people have incomes as low as $15,000 a year from their superannuation investments—will be facing cuts, if they are single pensioners, of anything up to $8,000 a year, each and every year. If they are couple pensioners, they will face cuts of up to $14,000 a year. These are very substantial changes, changes that the government promised that it would not make. It said, 'No changes to pensions,' and yet here we have the government rushing through the parliament a very substantial cut to middle-income pensioners who have saved hard all their lives and who now find that this government wants to completely move the goalposts and make them worse off in their retirement.

It is not only people who are currently retired who will be affected by that change. It is also those hundreds of thousands of people in their 50s and 60s planning their retirement who now know that they too will be affected by this toughening-up of the pension assets test. The independent analysis that has been done of the impact on people who are planning their retirement over the next 10 years estimates that around half of all new retirees in the next 10 years will be affected by this measure. These will be people who in fact have less than average wages, so they certainly are not millionaires. They certainly never were going to be millionaires. And yet they will find that their retirement is going to be that much harder because of this government's attack on the pension. It is an attack on middle Australia, on those people who are still working hard, saving hard for their retirement, and yet we see the government deciding to really take the sledgehammer to people who are working and saving very hard.

The government also has legislation that it wants to pursue through this parliament to increase the pension age to 70. Go and tell a hardworking nurse, bricklayer, carpenter or builder that they are going to have to keep working till they are 70. I have not found one of them who is happy about that. They know how hard that will be on their bodies. If it were the case that this government got this increased pension age through the parliament, we would see Australia have the oldest retirement age in the developed world. I can assure you that Labor will not support that increase to the age pension age. We think it is too harsh, particularly too harsh on the many thousands of Australians who do very tough jobs, particularly jobs that are tough on their bodies every single day. We understand that some older people do want to keep working. We want to support and encourage them. But we are not going to make it a requirement for access to the pension that you have to be at least 70 years of age.

One of the other cuts in last year's budget, which is just starting to be felt by pensioners—but I can tell you they are very worried about it—is the unilateral decision by this government to cut $1.3 billion from the amount of money that goes from the Commonwealth to the states for concessions to pensioners and seniors. This is money that helps pensioners with the costs of their rates, their utilities, their water bills, their transport—all of those concessions. These are concessions that are delivered by the state and territory governments. The Commonwealth previously provided $1.3 billion to help with the costs of those concessions. It is just another cut imposed by the Abbott government on pensioners through the states and territories. Some states have done the right thing by pensioners and made up the difference. But there is a limit to what the states can do. The states are already having to also confront the huge cuts in health and education that will also, particularly in the case of hospitals, have a disproportionate effect on our older Australians.

I assure the government that each and every marginal seat member on that side of the House will get used to seeing me in their electorates telling pensioners that this government does not tell the truth to them and this government is intent on attacking pensioners. Labor will not stop our campaign. There are millions of Australian pensioners who know that Mr Abbott did not tell them the truth before the last election. Labor will do everything in our power to stand up for Australian pensioners.

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