Rachel Siewert (WA, Australian Greens) Share this | Hansard source

The Greens, as I have said in my speech in the second reading debate on this legislation, reluctantly supported the move from $100,000 to $75,000. We supported the $75,000 because we thought that that was a justifiable figure—trying to meet, as I understood it, the concerns of Senator Xenophon in terms of where that threshold would move to. The $75,000 mark for the Greens represented the level below which we would not go in terms of reducing the threshold. The figure of $75,000 was at the top end of where the threshold would have been had indexation been applied to this measure in the first place. If you used CPI you got to the figure that Senator Xenophon now has in his amendment. That was the CPI figure. If you used MTAWE—male total average weekly earnings—I think you got to around $76,000. So, in other words, a range of figures were arrived at, depending on the different level of indexation used. We thought $75,000 was at the top of that range and so we could support that because it was at the top of that indexation range.

When you look at the use of indexation, CPI is not used for setting the base rate of the pension. In fact, for setting the base rate of the pension you look at CPI and MTAWE, you find whichever one is the best one, the higher one, and you apply that, because over the years it has been found that CPI does not really reflect the true increase in the cost of living. So a range of threshold mechanisms have since been used. Of course, there is a great deal of concern. In fact the report of the Senate Community Affairs Committee inquiry into the cost of living for older Australians very notably remarked on the fact that the current level of indexation—the current way that indexation is applied to the base rate of the pension—is inadequate, and it made some recommendations to look at how that is indexed. Of course, that is now being looked at in the overall review.

So, for a start, we have some very deep concerns around the fact that it is CPI that has been relied on in this particular amendment to set that figure of $69,000 because CPI is recognised as not being an effective mechanism for indexation of this type. So we have some concerns there. As I have said, the Greens reluctantly came down to supporting the $75,000 threshold, and we find ourselves absolutely unable to support any further reduction of that threshold. The Greens are very publicly and extensively on record as not supporting the private health insurance rebate—in fact, we want to see it abolished. As part of that, we do not support the surcharge. We supported the government’s original $100,000 threshold. We were extremely disappointed when they dropped it. As I said, we reluctantly agreed to that, being as it was at the top end of the suite of indexation mechanisms that could be used and that are used for indexation.

So unfortunately we are not going to be able to support Senator Xenophon’s amendment, which I know that he knows. We urge him to look at the impact that the surcharge is having on low income families and urge him to reconsider what we thought was the very generous compromise that the government made to come down from $100,000 to $75,000 and I think the very generous compromise that the Greens made in supporting the government’s compromise reduction. We are very pleased that the government has in fact picked up the issue of indexation, which the Greens first put on the table, because that helps address this ongoing issue around failure of the surcharge to keep up with incomes.

We believe that the overall measure is a good measure, bearing in mind that we would like the government to support our review mechanism, on which I will introduce an amendment later, but also bearing in mind the comments that the government has made about no negative impact on the public hospital system.