James Stevens (Sturt, Liberal Party) Share this | Hansard source

EVENS () (): I rise to support the amendment moved by the member for Deakin. As he outlined in his contribution, this amendment doesn't stand in the way of passing the bill. We of course support these three measures, although in schedule 3, we would really love to see more support than has been announced by the government in the recent budget. This comes at a time, of course, where inflation is at a frightening level: 7.3 per cent in the September quarter. It's pensioners and other people on fixed incomes who feel inflation the deepest and the toughest. The previous speaker was talking about the biggest increase in the pension in whatever period of time she quoted. As we know, the pension goes up linked to inflation, and so that the pension increasing because inflation is increasing is a zero-sum outcome; it is just keeping people's heads above water. That's why something happened under the coalition: it's a legislated outcome that happens automatically. Regrettably, under this government it is at the highest level ever because inflation is at such a significant level. That's something which is creating a lot of angst for pensioners and other people who are on fixed incomes, or for those who are on lower incomes. It's because inflation is the most terrible thing for people in those circumstances to have to battle.

Unfortunately, the Reserve Bank and, certainly, the budget papers indicate that inflation is only going to go higher than 7.3 per cent. It was 7.3 per cent in September and the pension was recently increased on inflation figures that might prove to be much lower than the sort of inflation that pensioners and seniors generally are going to have to battle with in the months and possibly even years ahead. Regrettably, every time all these forecasts get updated they are going higher and higher, and not just in this country but around the world.

So 7.3 per cent is tough; that is really tough. And, of course, it's higher than that for some of the staple items in the household budget—like groceries and energy. Energy is 56 per cent over two years. Unless the pension is going up by 56 per cent then the amount of money a pensioner spends in real terms on electricity is going to have to increase dramatically. When you're on a fixed income, that means your discretionary expenditure will have to drop commensurately. It means that there are a lot of things that pensioners in this country aren't going to look forward to doing like they could in the past if prices keep going up in such an out-of-control way, like electricity prices have been confirmed to in the budget by 56 per cent. If that forecast is anything like some of this government's other forecasts then no doubt the next time they update it it will be even higher.

So this is an important time to be doing all we can to help senior Australians—and pensioners, in particular—which this bill does in its three schedules. The first two, as the member for Deakin pointed out, have been lifted from the previous government. At the beginning of the year we put them into the parliament and the new government is adopting them, like many other pieces of legislation which we put through the parliament in recent times. They were introduced and lapsed in the last parliament. Schedule 1 is in regard to the consequences of breaching the income limit on the pension—not being thrown off the pension and having to go through the difficult process to reapply, which is up to two years, and get the pension again. Instead, a person will simply be able to update their circumstances with Services Australia when they are eligible for the pension again; they will be able to start receiving the pension again without that rigmarole. And schedule 2 keeps access to the concession card. People who were receiving the pension and who trigger the income limit because of higher income that they've earned then go off the pension for whatever period of time that might be, but they won't have the concession card taken away from them. That's a very important thing as well.

Schedule 3 is the new and significant element of this legislation. It increases the amount of income people can earn before triggering a loss of the pension or a step down from the full rate of the pension, depending on the circumstances. At the moment, you can earn $300 a fortnight and not have your pension affected. You can also accumulate that in a financial year up to $7,800. You can accumulate that and earn that amount of money before it affects your eligibility for the pension. What the government are doing here, with the intention of this coming into effect from 1 December, is saying that just for the period from 1 December through to 30 June 2023 we will allow you to earn an extra $4,000, which will be accumulated into that income bank. So instead of $7,800 you could potentially go up to $11,800. Between 1 December, when that would be applied, and 30 June you can earn, in this financial year, up to $11,800.

Of course, this is effectively putting in place a policy that was announced earlier in the year by Peter Dutton, at a time when unemployment is at historically low levels. I think the last time unemployment was at 3.5 per cent was the early 1970s. It is a time of extreme labour shortages in our economy; a time, as I have canvassed, that inflation is growing at such a rapid pace that it's putting an enormous amount of pressure on the household budget of everyone, pensioners in particular; and, equally, a time when unemployment is so low. The cost to the budget of unemployment benefit payments is reducing commensurate with that reduction in unemployment. So it is extremely common sense to help our pensioners who want to work and earn some extra money on top of their pension, to support them as best we can to do so and to help the businesses out there who equally have skill shortages. In many ways it's a win-win outcome.

I particularly acknowledge my constituent Mr Ian Henschke, who has been an excellent advocate for Australian seniors on this policy initiative going back way before the last few months. It has been something they have been calling for for a long, long time. I was very pleased when the opposition leader made the announcement of our first coalition policy being to support pensioners who want to earn more before it impacts their pension and obviously provide the equal outcomes for businesses, as far as getting more units of labour into the economy to address skills shortages. Ian has been working on this for a very long time. Through his hard work—and I would think also the fact that we made the announcement—the government subsequently decided that they would put in place a measure that sort of goes down this path.

As the member for Deakin made clear in his contribution, it's the view of the opposition—and I would've thought it was a pretty obvious point to make in the economic circumstances that we have right now—that this should not simply commence on 1 December and end on 30 June 2023, so run for seven months. We've said that we think the $300 a fortnight income limit should increase to $600 a fortnight, and that this needs to apply beyond 30 June 2023, into the future, with sensible periods of review every 12 months or so. I certainly don't think the principle and the point of this policy can be properly achieved by putting it in place in such a contracted period of time and bringing it to an end seven months after it starts. If we are trying to help pensioners who are having their cost of living skyrocket on them, who would like to re-enter the workforce and earn some extra money to help with those cost pressures and save for things that they want to help better enjoy their retirement—as we should absolutely support them to do—then ending this on 30 June is a very short-sighted policy position. It's also not really going to help as many people as it could to properly plan into the future for how they might structure the way in which they earn this extra money. A lot of people would probably avail themselves of seasonal labour opportunities.

If you cannot earn $11,800 a year, it might be that, particularly in regional communities, there are some seasonal opportunities that won't come about between 1 December and 30 June. They might be in a different part of the annual cycle, particularly in the agricultural industries et cetera, and bringing it to an end on 30 June means a lot of people that could be in a position to take advantage of it might not end up doing so because, by the time they put in place the plans and some changes around what they have going on in their lives to take up this opportunity, the opportunity will have been removed from them.

We clearly are going to have ongoing skills challenges in our economy, and we definitely will be having dramatic cost-of-living increases for a long time into the future. That was very regrettably confirmed both by the Reserve Bank, after their meeting last week, and in the budget papers two weeks ago. Both the Commonwealth Treasury and the Reserve Bank of Australia are projecting that inflation is only going to increase from its current levels, and, as I pointed out earlier, unfortunately every time we see these inflation projections and some of the other sub-projections about things like energy costs et cetera, they seem to ratchet up and up and up. For some time now we have not had any economic forecasts that are going anywhere but up when it comes to cost-of-living pressures.

This is a measure that of course puts pensioners in a position to earn more money to help them deal with that cost-of-living burden. We want to do all we can in this place to support them with those challenges, and if inflation is only ever increasing then more and more pensioners understandably are getting nervous about how they're meeting their costs. They're having to make sacrifices and take things out of their household budget, and that's something they shouldn't have to do. Retirement should be something that is enjoyed and that is not a time of financial stress. This measure, if it were extended beyond 30 June, would put people in a position to be able to earn some more money, which would take that pressure off. They may be able to more than take pressure off, which would put them in a position to do more things that they wouldn't be able to do within their existing budget just from the pension and then they'd contribute more to our economy

Employers, particularly those that require seasonal workforces et cetera, would see the opportunity of providing a pathway for people who are on the pension not to take on some permanent full-time role that would breach the income cap but instead to do some seasonal work perhaps or some duties on a weekly basis. Whatever the structure of it might be, increasing the cap from $7,800 to $11,800 just for a five-month period—so $4,000 in a five-month period—is a lost opportunity to provide a lot more benefit to our economy from this policy and to give pensioners the ability to plan with much more certainty into the future about how they manage their finances.

The second reading amendment makes the point about going from $300 to $600 a fortnight and not bringing these measures to a close at 30 June 2023 but instead extending the ability for pensioners to keep earning that higher rate, which is being ever eroded anyway by inflation. By increasing the cap from $300 to $600 when inflation is at 7.3 per cent and possibly going to eight per cent or higher, we see , frankly, that pensioners need this support. They need this option and they need the certainty of it extending well beyond 30 June. I commend this second reading amendment to the chamber. As I say, we support the three schedules to this bill, but we wish that schedule 3 would go further.

(Quorum formed)

See this speech in context