Second reading - Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018
Mr PITT: I very much enjoy following a contribution from the member for Chifley. It's always full of euphemisms, and it certainly gives me the opportunity to compare and contrast our policies with those of the opposition. I must say to the member for Chifley: welcome aboard the decentralisation bus. I think you should take a bit of time to speak to your colleagues about it, because I'm fairly confident that they haven't supported it for some years, in fact decades. I'm pleased to see that, finally, someone over there supports the decentralisation of the Public Service into the regions, and I'm very supportive of what the member for Chifley had to say in regard to decentralisation.
But, of course, I rise to speak on the Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018. This bill implements measures announced as part of the 2018 budget to give retirees greater choice and flexibility when it comes to managing their finances in retirement. Why should that happen? Well, because they deserve it. Over a lifetime they garner experience that matters, that is invaluable, that can be passed on, that can be utilised, that can be transferred to those in need. So I think this is a great opportunity not only for them, not only for those others who are in the workplace, but also for us, because it is incredibly important that we can transfer the skills of those older Australians to others in need. I thank them all for their contribution. Certainly without that age bracket working as volunteers right around our country we would not be able to support as many things as we do. The time that they give freely is, I think, invaluable.
There are three main changes in the bill to support Australians in retirement. There's an expansion of the Pension Loans Scheme, an increase and expansion of the pension work bonus and a new means test rule to encourage the development and take-up of lifetime retirement income products. The member for Chifley said that we have found a sudden devotion to those on the pension, those who are older and more senior Australians, and those who are more experienced. That is absolutely not the case, especially in my electorate. At the 2016 census, the median age of people in the electorate of Hinkler was 46 years, which is about 10 years above the state average, and 25.4 per cent of them were aged 65 years and over—36,346 people. Approximately 20,500 of them, about 14 per cent, were aged between 55 and 64. As at June 2018, a total of 27,860 people were receiving the age pension in Hinkler. So for me, as a local member, they are an incredibly important sector of our community. We must stand up for what they need, and this bill makes changes that are good for them. They are good opportunities.
Let's compare and contrast what we are doing in the bill before us with the proposals from the opposition. I'll quote from the front page of NewsMail, my local newspaper: 'Hip-pocket hit for 5500 retirees'. There will be a hip-pocket hit for 5½ thousand retirees. That is an enormous number of people. But this is the proposal from those opposite. They want to go to them and take away some of their meagre returns at tax time. In fact, on average, it's just $2,200 a year. Those opposite put forward that they haven't paid tax. I'm not sure how they worked that out. People own a share in a company. It's their part of the company. It has paid tax. It's on their behalf. If they are a low-income earner, they're entitled to a tax refund like every other Australian. Every other Australian is entitled to that tax refund, but not according to those opposite. In fact, the local candidate for the Labor Party dug a pretty big hole for himself when he said:
Make no mistake, this is an unfair loophole that over-whelming benefits the wealthy.
Most people in Bundaberg have never heard of franking credits or know how to access them …
It's just outrageous. How can you suggest to these people who make their claim every year that they don't understand it, that it doesn't apply to them and that they are rich? They absolutely are not rich. The refund on average is $2,200. That might not make a lot of difference to a Labor Party organiser who is the candidate in Hinkler—I'm sure the union has plenty of money to pay his wages—but $2,000 for people on low incomes helps them with their rates bills and electricity bills. It helps them pay bills that they would otherwise not be able to pay.
Mr Christensen: Medical costs.
Mr PITT: As the member for Dawson says, it helps them with their medical costs. It helps them with their day-to-day living. This is a source of income for them. They are entitled—they are entitled—to get that refund like every other Australian. What are they suggesting? That people should give up all the things they've worked hard for and invest in something else, which they're then entitled to get a tax return on because those opposite want to take a massive $200 billion tax grab from the Australian economy and take a hammer to the Australian economy. I think this is just outrageous.
The candidate for the Labor Party in Hinkler has doubled down. He has gone out on social media and said that Labor will end this tax loophole. It isn't a tax loophole; these people are entitled to a rebate. It is the same for every single Australian. The comebacks on Facebook have been pretty solid. I looked at what's been put forward by Mr Jesse Zielke. I know Jesse. Jesse is a local builder and he's told me outright that he supports a different side of politics. And he's entitled to: this is a democratic system and you can vote for whoever you like. But I think what he says is important as a response to what the Labor candidate has put forward. He says:
To put it even more simple, it's the same as an employer paying an employees tax on their behalf. I'm no where near retired and think this is just plain wrong, the shareholder is paying tax and the same shareholder is a retiree who's managed to make some good decisions in life and reduce the burden on claiming a pension which actually saves a lot of money. Happy to support good policy, but this is just wrong.
And it goes on. There are endless letters to the editor, including one from Brian Reynolds. He's pretty straight up and down. He says:
Labor's tax on the vulnerable is ridiculous, unfair, infantile, stupid and unsustainable.
In fact, he suggests:
… Labor shows a complete lack of understanding of financial matters.
He goes on:
If Labor will steal from the elderly and most vulnerable Australians, they will have no problem keeping tax returns from others in the future.
I've got to say that I continue to be surprised that Labor haven't changed their minds and backed off, because this is taking money from the people who desperately need it, who are entitled to it, who get the return and have set up the structures for their retirement many years in advance, and Labor simply want to rob it from people's pockets. That's it—$2,200. What does the Labor candidate think? He thinks they're rich and they've come from capital cities—and I say shame on him. That is very, very ordinary.
Getting back to the bill, the Pension Loans Scheme provides fortnightly income payments at a reasonable rate of interest to people who have receive a reduced rate of income support pension or do not receive any income support pension because of the income or assets test. Payments are made for a short period of time while the person's income and assets are being rearranged or may be made for an indefinite period. A loan under the Pension Loans Scheme can be repaid in full or in part at any time. The full amount of the loan plus interest owed at the time of the death of the person will be recovered from the person's estate. There is quite a lot of detail in the bill, of course. I don't intend to stand here and regurgitate all of that.
The legislation increases the work bonus threshold from $250 to $300 per fortnight for those individuals who choose to do some more work. I look at my own family. My father is 74. They still run an extensive harvesting contract business. They've reduced their farming operations, but he goes to work because he enjoys it. I think that the opportunity for those individuals to put a little bit more in the tin is very helpful for them, and I think it's in the best interests of all. This also means that the first $250 of fortnightly employment income is not counted under the pension income test. The legislation amends the current rules for lifetime income stream to create fairer, more equitable means test outcomes. Once again, this is well supported across the parliament and makes a very, very reasonable contribution to those older Australians who have certainly done a lot for us. They have been stoic. They have dealt with incredibly difficult times throughout their lifetime, whether those are world wars, local wars or difficult times through floods and droughts. They have contributed to Australia. They have made Australia a better place, and we should look after them and provide them with opportunities.
I note that the member for Dawson is in the House and is very keen to make a contribution. I say again to the Labor candidate for Hinkler: 'You should change your mind on this. You have a dug a hole for yourself. You have not only called those people in my electorate rich but said they are trying to dodge taxes through a tax loophole without getting a small and meagre return that helps them to pay their bills.' I think it is an outrage and he should be called out for it. I thank you, Deputy Speaker Hastie, for the opportunity to make a contribution. I support the legislation.