Jason Falinski (Mackellar, Liberal Party) Share this | Hansard source

Can I firstly start by say that there is no-one in parliament who does not believe that it should be a core contract with every member of our community that in the twilight of your life you can live it in relative comfort, security and certainty of income. That is one of the key things that we have believed in, as a democracy and as a Liberal Party, for a very long time. It was the first Liberal Parties of the UK that introduced age pensions to ensure that people, throughout their lifetime, could end their years with dignity, because that was critically important to what we had to do.

To that extent, Australia and both sides of the House can take credit for this. Either through good management or dumb luck, we have created the most successful retirement income system in the world. I notice this motion speaks about the fact that we spend only four per cent of GDP on retirement incomes for Australians, whereas the OECD average is eight per cent, moving to nine per cent. This is, in fact, a good thing. The reason that it's a good thing is that we have created—through our superannuation system and targeted benefits to those people who are living the last few years of their lives, whether it be the PBS, rental assistance or age-care subsidies—a sustainable system. Australia is in the position where our unfunded liabilities are less than five per cent of GDP. Those of the UK are 900 per cent. Those in the United States are 550 per cent of their GDP. Most European countries will not have the capacity in the future to pay down some of the unfunded liabilities that they have accumulated in the post World War II years. They are reaching a critical situation where they will be unable to provide to the generation that comes after us the sort of security and certainty that we take for granted in this country. That's what we have managed to achieve in Australia, and that's why what we've managed to do is so critical. There is no other country in the OECD that is able to provide the sort of sustainability that we've been able to provide to our elderly. The fact that it is sustainable is something to be celebrated, not bemoaned.

The largest civil engineering project in Australia at the moment is the WestConnex project in Western Sydney. It's about $23½ billion over nine years. In the same time that the New South Wales and federal government will have spent $23½ billion on a road that provides relief to millions of people living in New South Wales and improves their lifestyles in a manner and form that cannot be described unless you have actually had to sit in Sydney traffic day in, day out for years on end, we, as a federal government, will have spent close to $2 trillion on welfare and transfer payments in Australia. For people sitting in the bottom 20 per cent of the income quintile, which includes a lot of people on full pensions, for every dollar they pay in tax they receive 900 times the benefit of someone in the top 20 per cent quintile.

Our income tax transfer system is 29 times more redistributive than that of the United States. People say, 'Oh well, that's the United States.' It's 19 times more redistributive than France's, 18 times more redistributive than Canada's and 17 times more redistributive than the average of the Scandinavian countries. We have one of the largest tax transfer systems in the world and it is also one of the best targeted, which is why, compared to other nations in the world, the fastest-growing income group in Australia has been the bottom 20 per cent of income earners; whereas, in the United States, they haven't received a real income increase since the 1970s.

Removing the capacity for any government, whether it be our government or future governments, to set the deeming rate, which is not just about cash but across all assets, and give it to an independent body threatens the sustainability of this system. This is why this government was against removing franking credits for people in retirement. It's why we have always stood up for people in retirement, protecting their incomes so they can enjoy the last remaining years of their lives.

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