Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Hansard source

there are a few young Labor people here too, don't worry—walking into a period where suddenly you reflect on what it is you should have been up to over the last few years. If Senator Smith had picked up the phone and given one of us a call we could have told him last week, on Friday, what it was that the Prime Minister had announced, amongst 36 other measures. The Prime Minister announced the work bonus measure as recently as last Friday, and there was more discussion about it over the weekend. I want to spell out some of the key provisions of that announcement. The income bank will assist working social security pensioners over age pension age, including those receiving the aged pension, the disability support pension and the carer payment. It will also assist some of those receiving veterans entitlements, such as the service pension and income support supplement.

From 1 December 2022, pensioners over the age pension age will have their work bonus income bank credited with $4,000. This will take the maximum work bonus income bank from $7,800 to $11,800 until 30 June 2023. The increase will be added to each age pensioner's work bonus income bank upfront. That means that every age pensioner could have an extra $4,000 of employment income disregarded from the income test from the start, rather than accumulating it over time. Age pensioners who currently work and have already accrued the maximum income balance of $7,800 will now be able to have up to $11,800 disregarded for the purposes of the age pension income test. This provides a very strong incentive for those who do not currently work to start earning additional income if they wish to do so.

It's a significant reform. Age pensioners who are currently working and have already benefited from the full value of the concession will have their income bank topped up by $4,000. A pensioner who is working and has used some of their income bank will also receive the $4,000 top-up. The maximum income bank limit will return to $7,800 at the end of this financial year. By providing an immediate top up of $4,000, rather than allowing it to accrue over time as currently happens, this measure will provide an immediate benefit to any pensioner who starts work or works additional hours and is going to help address pressing labour shortages in a practical and immediate way. The work bonus operates in addition to the income test free area. Under the work bonus, the first $300 of work income a fortnight is not counted in the pension income test and as such does not reduce the amount of pension received. Pensioners are able to build up any unused amount of the $300 fortnightly exemption in a work bonus income bank up to a total of $7,800.

I acknowledge that in all of these areas—for veterans; pensioners; disability pensioners; participants in the NDIS; long-term unemployed Australians, particularly First Nations Australians; and women, whose participation rate is not as high in the labour market and are participating in areas of the labour market where incomes are lower and employment is more contingent—there is more work to do. What I say to the chamber is that we have as a government moved to deal with this question carefully and in a way that includes all of the Australian community. We have done it in a careful, methodical way. It is a significant improvement, but there is of course more to do on all of these questions. The way to get the best out of Australians and Australian institutions is of course to play a leadership role from government and encourage people to work together, not to encourage Australians to think that there might be some sectional advantage in playing with the politics of division—a politics that some on the other side are all too comfortable playing. And we'll continue to work through these issues with the trade union movement and with business, large and small, to develop practical solutions and to do the kinds of things Senator Smith has only recently become so worried about. The cost of living and labour shortages are issues that the Morrison government talked about but didn't lift a finger to resolve.

On the cost-of-living questions, there have been some announcements today about indexation and general support for age-pensioner and service payments. Regarding the three pillars of the retirement system—compulsory superannuation, voluntary savings and the age pension—the age pension is now the largest component of social security expenditure. Expenditure in 2022-23 is around $54 billion. A significant announcement is being made today about indexation, which will see the JobSeeker payment for singles without children increasing by $25.70 a fortnight and significant increases to other government social security payments. These payments will increase from 20 September. That reflects a serious contribution—the largest indexation for quite some time—that will make a real contribution on cost-of-living issues. (Time expired)