darren.chester.mp@aph.gov.au 1300 131 785
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October 25, 2010

Debate resumed, on motion by Mr Adams:

That this House:

(1) notes that pensions must keep pace with the cost of living;

(2) recognises the significance and importance of the Labor Government’s $14 billion reform of the pension system after over 11 years of Coalition inaction;

(3) understands that when there is a Commonwealth pension rise, some of it is likely to be absorbed into pensioners’ rising living costs, often as a result of States and Territories lifting housing rents and power costs;

(4) notes the danger that pensioners are at risk of becoming impoverished if State and Territory governments do not allow the benefits of pension increases to flow through to pensioners; and

(5) demands that all State and Territory Governments commit to permanently quarantining last September’s pension rise, in the calculation of pensioners’ public housing rent levels and other State and Territory government controlled costs.

Mr CHESTER (Gippsland) (12.10 pm) — I am pleased to join the debate on pensions and to speak on the motion by the member for Lyons. I will begin by acknowledging Mr Adams’s long-running interest in the issue of pension reform and his passion for making sure that older Australians, particularly older Tasmanians, are well supported in their retirement. I would also like to congratulate him on his re-election. He is one of the great characters of the parliament and a 5.4 per cent swing towards him gives credit to the work he has been doing. At the risk of driving your primary vote down, though, member for Lyons, let me say that I always appreciate your contributions; they are very thoughtful. I have a lot of respect for the issues you raise, because they are issues that are very consistent with my community in regional Victoria.

Mr Adams — They’re not that far apart.

Mr CHESTER — There is only a small swim between us. While I do not necessarily agree with every part of the motion before the House, we do have some common ground when it comes to our shared passion for ensuring that the men and women who have worked very hard to build the nation we have today have the opportunity to retire with dignity and to receive the support they need when required from our government. The cost of living increases that the member rightly referred to and the impact that is having on our pensioners is something that is very apparent in the electorate of Gippsland. In fact, it was one of the critical issues in the Gippsland by-election in 2008. In that by-election the topic of the need to increase the rate, particularly for the single age pension, was heavily debated, and I guaranteed older Gippslanders during that campaign that, if I were elected, I would come to Canberra and fight for a better deal on their behalf. I am very pleased that the Rudd government did take some steps to increase the pension. It followed some strong lobbying by members, I believe, on both sides. In particular, the member for Bradfield, who was the Leader of the Opposition at the time, pushed very strongly for an increase in the age pension. I think there is a level of understanding—

Ms Hall — Mr Deputy Speaker, I seek to intervene.

The DEPUTY SPEAKER (Mr S Sidebottom) — Is the member for Gippsland willing to give way?


Ms Hall — Could the member please detail, in his contribution, the issues that he has brought to Canberra in relation to pensions and how they have been taken up by his party?

Mr CHESTER — I thank the member. I will take on board the new paradigm referred to in my presentation today. As I said, it was one of the biggest issues in the Gippsland by-election. I made representations to the minister at that time and spoke with the member for Bradfield, who was the opposition leader at the time, and he strongly advocated on behalf of the opposition and in fact proposed a private member’s bill to increase the rate of the single pension, which was, I believe, voted down by the government, and I think that was a mistake. But I do acknowledge that, since that time has passed, the former Rudd government, in one of its better decisions, decided to increase the rate of pension, so I do take the member’s question in the spirit in which it was intended.

One of the key issues for pensioners to understand this situation is that many older Australians have not had the benefit of compulsory superannuation, so their retirement incomes are very limited. They do not have access to large amounts of retirement income, and there is going to be an increased need for government support for those people who have not necessarily had the capacity to plan for their own retirement for a whole range of reasons. I acknowledge the importance of the package referred to by the member for Lyons and stress again that it is something I argued for in my by-election campaign and since that time.

In all this, we must not forget the self-funded retirees, who have been hit very badly by the global economic circumstances and are now facing a situation where their retirement income has been restricted as well. They are often left out of this debate when it comes to discussions of housing affordability. It would be a mistake to think that, just because they happen to own their own homes and have a modest amount of retirement income, they are doing it comfortably in these very difficult times.

Also, reflecting on the cost-of-living pressures which the previous member spoke about, there are some policy positions being adopted by the current government which I believe will add further pressure to retirement incomes— in particular, the government’s proposed new carbon tax and the impact that is going to have on electricity prices. I believe that pensioners in particular will feel the pain the most. I am already hearing anecdotes in my electorate of older members of my community who are staying in bed longer in the mornings because they cannot afford to heat their own homes. If those stories are true, it is a real worry for us as a society when we have older people becoming more isolated in their communities, particularly in regional communities, because of cost-of living pressures. Increases in water bills and other obviously essential services which have been a direct product of poor state government decisions are also having a severe impact on our pensioners and their cost-of-living pressures, not to mention the food prices which the previous speaker referred to.

I do, however, take exception to the member for Lyons’s assertion that there were 11 years of coalition inaction in relation to pensioners. I think the words he used were that the previous government failed to do anything. That simply lacks credibility on several fronts. Most notably, it lacks credibility on the electoral maths. Why did older Australians embrace Prime Minister John Howard and continue to re-elect the government he led if he treated pensioners as poorly as the member claims?

Government members interjecting

Mr CHESTER — I notice the interjections from other members. The simple fact of the matter is that no government goes out of its way to do nothing in relation to any issue. It is a juvenile debate, and I think that when we as members wander off into this hyperbole and ignore the facts of the matter we do a great disservice to the Australian people. I do not think that even the failed Rudd government did nothing at all. It tried to do a few things, and unfortunately it was incompetent in its delivery. But the simple fact of the matter is that the previous Howard coalition government increased the real income of pensioners by 20 per cent during the term of that government— that is two per cent per year over the life of the Howard government. In addition to the increase in real income, the coalition delivered one-off bonuses paid to most pensioner categories, as well as a utilities allowance paid to pensioners for the first time. I believe that it was the good economic management of the Howard government that made the increase to real income and the provision of one-off benefits possible. Because of the growth of wages, which was far in advance of the cost of living, in September 1997 the Howard government legislated to index pensions using the male total average weekly earnings if that index was higher than the consumer price index, and this enabled pensioners to keep ahead of cost-of-living increases. I could go on, but I just want to make it clear to the House for the record that the previous Howard government, with the support of the Nationals in coalition, did some excellent work in relation to pensioners. But I accept that there is always more to be done. It is one of those areas of public policy where there is always going to be more work to be done.

As I said, during the Gippsland by-election the former member for Bradfield, in his role as opposition leader, was a strong advocate on behalf of older Australians and certainly made the case very strongly to the people of Gippsland that there was a need for more reform.

Mr Adams — He did that to get you elected.

Mr CHESTER — I missed that interjection from the member for Lyons. If he would like to make it more clearly, I might be able to take it up with him.

Mr Adams — He did that to get you elected.

The DEPUTY SPEAKER (Ms K Livermore) — Order! The member will be heard in silence.

Mr CHESTER — The interjection was not worth repeating after all, so I will just ignore it. But I would like to refer specifically to the final part of the motion, which the member spoke quite eloquently about. It demands that all state and territory governments commit to permanently quarantining last September’s pension rise in the calculation of pensioners’ public housing rent levels and other state and territory government controlled costs. That is one area where the member for Lyons and I will be in furious agreement. Pensioners are telling me in calls, emails and correspondence to my office that they simply are not that much better off once the state government gets their hands on the money. That is a critical issue for us in this place: how do we protect future pension increases, arising from what I believe are good policy decisions, from the grubby hands of state treasurers?

It is a shameful situation when one level of government is giving with one hand and the other level of government is taking with the other. The member quite rightly referred to the situation of public housing rents, and it has been a very significant issue in my electorate, where I have been contacted by pensioners. These people are not mugs; they know when they are being ripped off. They know that, on the one hand, they have a federal government making some big announcements and getting credit—and deservedly so for increasing the rate of the pension but, on the other hand, they are getting an increase in their public housing rents by their state governments. So I call on colleagues within the state administrations to have a real look into their own hearts when it comes to this issue. It is a very important issue. They are not fooling anyone. The state administrations have fleeced pensioners of at least some of the benefits that are included in the increased pension rates, and they have eroded the benefit of those increased pensions. As I said, I myself have had several letters on the issue, as the member for Lyons has, and I am happy to work with the member for Lyons and all other members of goodwill to achieve a better deal for pensioners in the future. We really need to keep the state treasurers away from any future increases.

More generally, this entire issue of retirement income reform is, I believe, one that the parliament is going to have to spend a lot more time considering in the months and years ahead. We are going to need to be more innovative in making policy reforms that do not penalise pensioners when they happen to get a bit of part-time work. They are not going to be turned into millionaires on the basis of the pension and some part-time work they get on the side. We are going to have to find ways to give them more dignity in their retirement and more control of their own financial futures. I think that is a critical issue of reform for this parliament and beyond. As I said previously, it is important that, when we talk about this issue of older Australians, we do not forget the self-funded retirees. It would be a mistake to think that they are not feeling the pain of the global economic situation at the moment. So I thank the member for raising this issue, and I believe it is a good debate to have.

(Time expired)

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