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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-10-16 Daily Xml
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AGE PENSIONS

Mrs REDMOND (Heysen) (11:32): I move:

That this house recognises the inadequacy of the age pension and calls on the government to make urgent representations to the Prime Minister to increase payments to age pensioners forthwith.

I am delighted with developments since I gave notice of this motion, because it is obvious that the federal government got wind of my motion and was so concerned about it that it realised it needed to take action forthwith—and I do acknowledge that the government has, indeed, taken some action. However, although I would like to claim the credit, I suggest to the house that perhaps this was not motivated by Kevin Rudd trembling at the thought of my asking for more money for pensions but that maybe it was actually about Kevin Rudd's fear that the whole economy would go into meltdown.

Mr Hanna: Why not claim credit? I am.

Mrs REDMOND: The member for Mitchell says that I should claim credit, and perhaps he is right. I thank the government, on behalf of all the pensioners here and elsewhere, for the one-off payment. As I said, I think it is probably motivated by something other than care about our pensioners, because until a week or two ago the government was clearly not interested in resolving their issues, even though, thanks to a media onslaught, virtually every member of the federal government had to concede that they could not live on the age pension.

The payment of, I think, $1,400 as a one-off payment for a single pensioner and $2,100 as a one-off payment for a married age-pension couple is certainly welcome. Of course, I have long thought that it is a bit odd that we have this distinction between single and married pensioners. It seems to me that the government is, in a way, encouraging immorality. When I first noticed this, as a youngster, it used to be that if you were living in sin you could potentially get more money than if you were living as a married couple, or if you simply chose to stay together some nights of the week you could get more money if you were single and just occasionally sharing a bed.

I notice, Madam Acting Speaker, that you are shaking your head in denial that this can occur, but I can assure you that there are elderly people who choose to live as singles and receive single pensions but have occasional times together. In fact, in August I met a delightful couple on the train. They were relatively recently married; she was 79 and he was 82, and they had each been married to other people for 55 years. They had known each other from university years and, with the passing of their respective spouses, they got back together. They did not need pensions, but they had the delightful arrangement where they spent three nights a week at his place, two nights a week at her place, and the other two nights they spent recovering from each other and stayed apart. I thought that sounded eminently sensible and should probably be adopted by all married couples.

Mr Pederick: I do now.

Mrs REDMOND: The member for Hammond remarks that that is how it is for members of parliament. As I said, I congratulate the federal government on taking notice of this motion before I even got to speak to it and making arrangements to make this one-off payment. Of course, that does not solve the long-term problem, and I look forward to seeing an adjustment in the pension in due course because there needs to be a long-term solution.

If you look at the history of age pensions in this country, it is quite interesting. We, as a country, introduced age pensions in about 1907 or 1908, only six or seven years after we became a country and we were one of the very first places in the world to introduce the age pension. Of course, when we introduced the age pension, it was the case that most people began their working life at 14 or 15, they worked until they were 65, and they were very lucky if they survived beyond the age of 70. Once you had paid tax for all these years, it was not unreasonable to think that you might get the age pension. By way of comparison, by the way, the US did not introduce the age pension until after World War II, so we were well ahead of the rest of the Western world in introducing an age pension.

As I said, it worked well in those days because you lived such a short time, comparatively, after the end of your working life and your working life started at such a young age. I do not know about other members but in my household it appears that my young adults are only likely to start full-time proper work—they have worked while they have been university but I am referring to full-time, permanent employment—at about the age of 25, and that seems to be about when it starts now.

The average retirement age has bottomed out at about 58, so we have reduced the average age of retirement, although the official age remained at 60 for women and 65 for men for a long time. The reality was that, as we became more affluent, more people chose to move into retirement at a younger age and so our retirement age had reduced to 58. People have now recognised the need to work a bit longer and I think in due course we will need to think about that whole issue of retirement because it makes no sense for people to be retiring even at 60 or 65 if we are going to live to 85 or 90.

So, with this extended time as young people where they are not in the full-time paid workforce and paying their taxes, they have to be supported by our taxes, and then we have this extended time after we retire with the average age in Australia for people born today now being into the 80-plus age bracket. We have that extended time, so it became obvious to governments some time ago that we would need to move to the system we now have in place of superannuation where people are putting away towards their retirement for the whole time that they are at work. I remember seeing some years ago that, of 12 OECD countries, Australia was the best placed of the developed countries in terms of planning for our ageing population.

My favourite statistic in relation to the ageing of our population is that people are always surprised when I tell them that already in this country we have some 2,340 people over the age of 100. Everyone thinks that sounds a lot, and the Queen must be getting writer's cramp just signing the cards at the moment, but if we think that 2,340 people—and we cannot always be exact because of problems with birth certificates of people who have migrated here and so on—sounds a lot, as we baby boomers go into that cohort, the fact is that it is anticipated that by the year 2055—and I hope the member for Colton is ready for this because we will be there together—it is anticipated that in this country we will have 78,000 people over the age of 100.

That is an extraordinary cohort, particularly when we baby boomers have over indulged our own children, so they are going to be the first generation that does not outlive their parents as a cohort and, therefore, it is their children who will be left looking after those of us who are still around, and I intend to be among that group. It is going to become an increasing problem. As I said, we have at least thought about this and we do have superannuation in place, but the people who are on the age pension now are that group that we need to take care of because they have not been in that range of people who have been (for a long time; their whole careers) involved in putting away superannuation.

On the issue of superannuation I would just remark that I went on an overseas trip in 2003, and I was primarily looking at ageing issues. As part of that, I did some lecturing at the medical school at the University of Hawaii. I lectured both an undergraduate class and a graduate class at the university.

It was interesting that the graduate class—and we did that lecture more as a seminar with me involved in the tutorial—were studying the same book that I had been studying at the Catholic University of America in Washington DC. I had studied the entire book in one-on-one tuition over a period of nine days, which meant I had to read four and five chapters a night and have this one-on-one tuition where there is nowhere to hide. I did two sections of a certificate on ageing, for which I got distinctions, and on the way home I travelled via Hawaii and stopped to do these lectures.

What was interesting was that they were studying the same text book that I had been studying—but I did it in nine days and they were spending an entire semester doing it—but also, when I started talking about superannuation these Americans—and these people were specialising in aged issues and were graduate students at the university medical school there—said to me, 'What is this superannuation that you Australians keep talking about?'

Mr Hanna: And, 'Where is Australia?'

Mrs REDMOND: The member for Mitchell says, 'Where is Australia?' No; they definitely knew where Australia was and, of course, from Hawaii a number of them had actually gone there. So, they were interested but they were also extremely envious, not only of our age pension system and our superannuation scheme, but our Medicare system and our pharmaceutical benefits system. When I explained the basis of how we do have the fundamentals in place, they all thought that Australia sounded like paradise and they wished that they could either move here or implement the same sorts of systems in their community.

Another interesting thing I came across over there was Meals on Wheels. They have something called Meals on Wheels but it is only providing one meal a week. When I explained to them what our Meals on Wheels does, and does through volunteers, they were blown away by the amazing statistics that we are able to come up with in terms of the enterprise here.

The point I wanted to make is that Australia has been at the forefront of preparing for this huge cohort of the ageing population going through by putting in place superannuation. I think there is generally a recognition that we are, in fact, going to have to change our views about retirement and maybe do more stepping down. I think companies are beginning to recognise that there is a value in keeping people around who have that corporate knowledge and who have the capacity to mentor the younger group.

Whilst we need to allow people to step down and not have to work the 80 hours a week or whatever, at the high level, it is a nonsense to say that you get to a certain age and suddenly you are no longer capable and interested in working. Indeed, I have met people in a number of professions, doctors, lawyers and so on, who in their mid-sixties have said, 'I feel as though I have hit my straps. I feel as though I am now at the peak of my powers, having practised in this area for 40 years.' It is a nonsense, to me, that we then say, 'Well, these people have to go.'

So, we will be in due course, I think, through superannuation, prepared for the aged cohort but it is necessary, in my view, for the government to take account of the fact that the cohort of age pensioners now are not the people for whom superannuation is going to provide the answer. That will come in a wave that will start to increase over the next few years, but at the moment our ageing population are still heavily reliant on the age pension.

Unlike a generation ago, when people generally expected to pay off their house by about their mid-fifties and therefore could live on an age pension, we have a much higher percentage now who either do not have a home of their own in the sense of owning it with a mortgage, or who are renting. So, once you take that huge component for rent out of a pension, or a huge component for a mortgage out of a pension, there is very little left, and that is what has made it harder over a period of time for people to actually survive with any degree of being able to lead a decent and normal life on an age pension.

My call remains in place. As I said, I thank the federal government for recognising the call I made when I gave notice of motion from this humble chamber a few weeks ago. I thank it for taking notice, and I congratulate it on making the payment it is about to make. However, I say that it does not solve the problem in the long term and that we need to have some fundamental structural reform in the area of age pensions. I believe that they will decrease and that, over the next 20 to 25 years, we will see the need for them go down.

Without wanting to lock in any governments anywhere, looking at the demographics of the situation, I anticipate that gradually we will not abolish age pensions but they will simply become less and less relevant because, more and more, people will be expected to have superannuation as the major component of how they manage their lifestyle in their post retirement years. With those few words, I commend my motion to the house and, once again, thank the government for acknowledging its importance and doing something about it so promptly.

The Hon. J.M. RANKINE (Wright—Minister for Families and Communities, Minister for Northern Suburbs, Minister for Housing, Minister for Ageing, Minister for Disability) (11:46): I move an amendment to the motion:

That this house recognises and supports the efforts of the federal Labor government on its actions to financially assist age pensioners.

I think that it is really poor form to hear the opposition move the motion in its original form. In fact, it is appropriate that this house now praise the decisive action taken by the Rudd government, which has started a comprehensive review into the pension system which is due no later than February next year.

We should also note and condemn the previous Liberal government on its actions, or lack of action, in relation to age pensions. I note that the opposition has not been in here over the last six years banging on about what the federal Liberal government should do in relation to supporting age pensioners. The former federal Liberal government had 12 years to fix the pension system.

It is not just about age pensioners or single age pensioners: it is about married age pensioners, people on disability pensions and single mothers. A whole range of people are affected by the pension system. The Howard government just sat on its hands and did nothing to reform the pension system. In fact, last year it voted against raising the base rate for our pensions, so it is just a bit rich to sit in here now and listen to the opposition jumping up and down about the level of age pensions and what the Rudd government should do.

When the Rudd government came to power, it stated that it would be looking for a long-term solutions to pension payments and address the matter as a priority—and that is what it has done. This week's announcement by the Prime Minister is obviously very good news for all pensioners. It comes on top of the $500 bonus that was part of the last federal budget, together with a rise in the utility payments concessions the Rudd government provided, taking it from $107 a year to $500 a year and, effectively, giving a single age pensioner a $900 boost on top of their fortnightly pension.

When we talk about concessions, I think that it is also worth noting that every concession for pensioners in this state has been introduced by state Labor governments. Every rise in concessions has been introduced by state Labor governments, except for two. A $5 rise in water concessions was introduced in an election year by a Liberal government, if my memory serves me correctly. The Liberal government was so gracious as to introduce a concession on a tax it introduced when it was forced into it in this chamber. So, that is basically the Liberal Party's history of looking after our older residents here in South Australia.

The Rudd government has also provided an enormous boost to our home and community care services. Here in South Australia, for example, we have had an increase of $35 million, providing assistance to an additional 14,000 age pensioners here in South Australia so that they can remain in their own homes and remain independent. So, we will have something like 106,000 older South Australians receiving services and support courtesy of the joint funding between a state Labor government and a federal Labor government. I think our record stands, as far as our support for pensioners.

We should be applauding the Rudd Labor government for taking that comprehensive review of pensions to ensure we get it right. We have a leader who is taking the financial crisis seriously, understanding the impact it is having on all people from lower incomes, whether it is age pensioners, single parent pensioners or young families wanting to get into first own home. The government is taking decisive action to ensure that we can all maintain our financial viability here in South Australia and across the nation. So, it is a bit rich for the member for Heysen to come in here and try to claim credit for initiatives introduced by a federal government that clearly has the best interests of older Australians well and truly on its political agenda.

Mr HANNA (Mitchell) (11:52): There was an interesting concatenation of circumstances six to 12 months ago: not only did Prime Minister Rudd succeed Prime Minister Howard about a year ago but, at about the same time, there was a sharp rise in petrol prices and, within a very short time, there was a flow-on effect to grocery prices of all kinds. Towards the end of last year, as I went around the electorate, it became very evident that there was a sharp downturn in the welfare of people on the pension, and I refer to the age pension, the benefits received by sole parents, the disability pension, and people receiving carer payments as well. Right across the board for those people on Centrelink benefits, there was a sharp downturn in their welfare because of these circumstances.

At the same time, with the accession to power of the Labor Party in the national parliament, an expectation arose that this problem would be fixed. There was a perception that the Labor Party was there for the battlers, particularly those at the bottom of the pile, in the financial sense, that is, those receiving Centrelink benefits. So, expectations were high that the Rudd government would act quickly on this important issue of income maintenance for those without employment, at least without full-time employment.

So, as if in a dream, I was inspired to do something about this issue, and I wrote to the federal minister, Jenny Macklin, describing the need for an increase in the pension payment on an ongoing basis—and now we see it. Post hoc ergo propter hoc. Kevin Rudd has announced a bonus payment for pensioners, with a promise to complete a review into pension payments throughout the next few months. I am very pleased that my call has been heeded, and I join with the member for Heysen in highlighting the inadequacy of the age pension in particular.

The Hon. R.B. SUCH (Fisher) (11:55): I want to make a brief contribution. I am not interested in the party politics of this. I applaud the decision by the Rudd government to make some payments to pensioners and carers, and also some of the other measures. Interestingly, I recently wrote to The Advertiser—which I am wont to do—suggesting that, given that the review into pensions (which is a sensible initiative by the Rudd government) would take a while to complete, why not make a bonus payment or two.

I do not claim that the Prime Minister reads The Advertiser every night—probably every second night—but he should read it. I am delighted that he has made that bonus payment available to pensioners and carers. We all know how much prices have gone up—and I am a dedicated shopper—in supermarkets and elsewhere in recent times, some of it with justification and some without, but the point is that pensioners still have to survive.

In a sense, the reason we have this dilemma—and I have made this point before—is that we do not have an adequate national retirement income scheme. We have never had one, but we should have such a scheme so that, from day one, when a person starts work, they contribute to a proper retirement income related to what they earn during their working life so that they can retire in dignity. That is what happens in many European countries. We should have had it, but what we have is a dog's breakfast of some people on pensions, some people on private super schemes and some people in government protected schemes.

The sooner the federal government looks at a comprehensive retirement scheme, the better. Paul Keating had contributions originally set at about 9 per cent. It should have been increased. The previous government should have increased the contribution to superannuation for workers. Until and unless we get a decent, sensible and comprehensive retirement scheme contributed to by everyone from their first working day, we will always have issues like this, with pensioners trying to survive on a pittance.

Even in regard to pensioners there is considerable variation. Someone told me yesterday that their relative does not need a bonus payment because they will just put it in the bank. That would not apply to most pensioners, but there are variations: some people are on veterans pensions and some are on other sorts of pensions. That is why the Rudd government review of pensions is a good thing. It should have been done before, but at least it is happening now.

I commend the government. I thought that the announcement this week in response to the global situation and the day-to-day impact on people like pensioners and carers was a great announcement. I think it will take a lot of pressure off pensioners in the short term. They will not be living in luxury, but at least they might be able to eat decent, quality meals.

The DEPUTY SPEAKER: If the member for Heysen speaks, she closes the debate.

Mrs REDMOND (Heysen) (11:59): Thank you, Madam Deputy Speaker. I take it that it is simply closing the debate on the motion to amend.

The DEPUTY SPEAKER: No, it closes the debate on the whole motion.

Mrs REDMOND: Madam Deputy Speaker, at what point then do we get to consider the motion to amend? It seems to me that, as a matter of procedure—

The DEPUTY SPEAKER: Debate is allowed on either the original motion or the amendment. When all debate has concluded, you will be invited to have your right of reply, at which time you can address issues arising out of the amendment. The amendment is put and then the original motion is put if the amendment is lost. If the amendment is carried, that becomes the motion.

Mrs REDMOND: Thank you for your assistance, Madam Deputy Speaker. In fact, the motion to amend should have been declared to be out of order because I think it is so contrary to the original motion that it should not be accepted as a motion to amend. However, I will let that one go through to the keeper and simply oppose the motion to amend.

The minister tries to make excuses for the government. I thought I was being quite generous in acknowledging that the government has, indeed, made this arrangement for the one-off payment to pensioners. I am sure that the pensioners are most appreciative of it. The point of the motion, however, is that what we need is long-term structural reform. When I say ' long term' I do not mean for ever and ever. As I said in my comments earlier, in my view the age pension will probably, over the next 25 years, cease to become the major part of most people's income in their retirement. It will gradually fade into a less significant role than it has at the moment. However, it is clear to me that, at the moment, the pension is the most significant component for the retirement income of a large proportion of our elderly citizens. As pointed out by the member for Mitchell, there have been quite significant increases in day-to-day living expenses, be they transport, food, rental or any of the other normal aspects of maintaining oneself independently.

Independence is the key to most people's happiness in their retirement. There are certain elements like the security of where one lives—be it in one's own home, a rented apartment or flat, in a retirement village or hostel, or wherever—and having security of abode is a most significant indicator. Largely, many other things that are good indicators of a successful and happy retirement are not financial but are to do with relationships, support groups and all that kind of thing. However, finances clearly have to underpin the security of people's place of abode and their ability to support themselves and, thus, remain independent.

I am sure that each of us expects to remain independent as we head into retirement. People expect to remain independent for as long as is humanly possible. Whilst I commend the government for the one-off payment, I make the comment that, whilst it was not made for the right reasons, at least it was probably made to the right people. It was made to prevent the country going into economic meltdown. At least, in targeting the pensioners (because they have been so underpaid for so long), it is likely that most of them—maybe not all, according to the member for Fisher—will clearly need to spend the money to catch up in some of the areas where they have been falling behind and, therefore, it will be spent in the economy and will hopefully stop us from going into a worse economic downturn than we have already seen in the last few weeks.

The government needs to proceed with its longer-term review. Hopefully, that review will show that currently pensions in this country are inadequate, particularly because of a rapid increase in a range of areas over the last 12 months. That needs to be addressed, it needs to be addressed quickly and it needs to be addressed for the longer term, over the next 20 years or so.

The house divided on the amendment:

AYES (27)
Atkinson, M.J. Bedford, F.E. Bignell, L.W.
Breuer, L.R. Caica, P. Ciccarello, V.
Foley, K.O. Fox, C.C. Geraghty, R.K.
Hill, J.D. Kenyon, T.R. Key, S.W.
Koutsantonis, T. Lomax-Smith, J.D. Maywald, K.A.
McEwen, R.J. O'Brien, M.F. Piccolo, T.
Portolesi, G. Rankine, J.M. (teller) Rann, M.D.
Rau, J.R. Simmons, L.A. Stevens, L.
Thompson, M.G. Weatherill, J.W. Wright, M.J.
NOES (14)
Evans, I.F. Goldsworthy, M.R. Griffiths, S.P.
Gunn, G.M. Hanna, K. Kerin, R.G.
McFetridge, D. Pederick, A.S. Penfold, E.M.
Pengilly, M. Pisoni, D.G. Redmond, I.M. (teller)
Venning, I.H. Williams, M.R.

Majority of 13 for the ayes.

Amendment thus carried; motion as amended passed.

Mr HANNA: I rise on a point of order, Mr Speaker. When she moved her amendment, I distinctly recall that the minister read out words as an amendment but there was no part of what she said which deleted the existing words. I want to ensure that Hansard records both the wording of the original motion and those which were added by the minister.

The SPEAKER: That would apparently be the case.

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