Speeches

SPEECH TO ETHNIC COMMUNITIES COUNCIL OF VICTORIA

August 27, 2018

SPEECH TO ETHNIC COMMUNITIES COUNCIL OF VICTORIA

COBURG, VICTORIA

I’d like to begin by acknowledging the traditional owners of the land on which we meet and pay respects to their elders, past and present.

For those of you I haven’t had the pleasure of meeting my name is Peter Khalil, I’m the Federal Labor member for Wills, which makes me your representative in the Australian parliament.

Last week people asked me if I was happy with the Liberal implosion – No. Australians are sick and tired of disunity and division. Labor has learnt from our mistakes. We have had one leader in 5 years, we have been a stable and sensible opposition. If current behaviour is a predictor of future behaviour then we are going to provide a stable and sensible government.

The first thing I should address, and it’s probably something you’re all interested to hear a bit on is how does the change of Prime Minister affect you as pensioners.  Firstly, if you don’t know much about him or who he is let me tell you: he was Tony Abbot’s Minister for Immigration and was Malcolm Turnbull’s Treasurer once Joe Hockey left.

Speaking as the new Treasurer in 2015 he made comments during a speech to the Association of Superannuation Funds of Australia (ASFA) conference that put ordinary Australian workers on notice that they should no longer expect to receive an age pension from the government when they retire. In what was a wide-ranging speech, Mr Morrison outlined the Turnbull government's vision for an overhaul of the country's retirement income system by both reducing expenditure on welfare payments, and limiting the amount of revenue forgone through tax concessions.

In that speech he also made comments stating that the age pension should not be regarded as an entitlement for all, but rather a "welfare payment for those who do not have the ability to save enough to fund their own retirement".

Now I want to say something clearly about this as a matter of  political philosophy, Morrison’s view, and I suspect what will be the view of his government, completely delegitimises the actual social contract that you have made as a citizen with the Federal government. You have paid your taxes all your working life – 40, 50 years. The pension is not there for a welfare payment it is a part of the social contract in which you are then paid your pension by the government because you have paid your taxes all your life.

Earlier this year in May, after he handed down the budget he was asked about raising the Newstart Allowance – which I should say – many people including leading economists argue should be raised his response was, "My priority is to give tax relief to people who are working and paying taxes".

Why am I telling you this? Because Scott Morrison may be the new Prime Minister of Australia but he has a track record of wanting to make cuts to social welfare payments. Don’t be fooled by the new Prime minister, he has the same old Liberal policies from the right wing think-tank the Institute of Public affairs (IPA).

But this is not simply a problem with Scott Morrison. This is a problem from the days of Tony Abbott and Malcolm Turnbull. It does not matter who leads the Liberal Party, Pension cuts are in their DNA. They have tried to cut the pension in every budget:

In the 2014 Budget they tried to cut pension indexation – a cut that would have meant pensioners would be forced to live on $80 a week less within ten years. This unfair cut would have ripped $23 billion from the pockets of every single pensioner in Australia.

In the 2014 Budget they cut $1 billion from pensioner concessions – support designed to help pensioners with the cost of living.

In the 2014 Budget they axed the $900 seniors supplement to self-funded retirees receiving the Commonwealth Seniors Health Card.

In the 2014 Budget the Liberals tried to reset deeming rates thresholds – a cut that would have seen 500,000 part-pensioners made worse off.

In 2015, the Liberals did a deal with the Greens to cut the pension to around 370,000 pensioners by as much as $12,000 a year by changing the pension assets test.

In the 2016 Budget they tried to cut the pension to around 190,000 pensioners as part of a plan to limit overseas travel for pensioners to six weeks.

They still want to make pensioners born overseas wait longer to before qualifying for the Age Pension by increasing the residency requirements from 10 to 15 years.

The Liberals want to completely take away the pension supplement from pensioners who go overseas for more than six weeks, this will see around $120 million ripped from the pockets of pensioners.

They still refuse to adjust deeming rates for pensioners. Deeming is a set of rules used to work out the income created from your financial assets. It assumes these assets earn a set rate of income, no matter what they really earn.

Furthermore, the Liberals still want to increase the pension age to 70. Labor has fought these cuts and unfair changes tooth and nail.

This is on top of the Liberal’s constant dismantling of Centrelink, as a functioning part of the public service, the ruthless slashing of jobs makes it harder, actually next to impossible which only makes it harder to communicate and deal with them. The fact is Aged Pensioners are waiting longer to have their payments approved by Centrelink.

Aged pension payment median processing times by Centrelink have dramatically increased. Between 2016 to 2017 and 2017 to 2018 processing times increased from an average of 36 days to 49 days.

Older Australians, who have worked all their lives, like you here today, are being made to wait, on average, for two months just to have their Aged pensions approved. The median times don’t even take into account instances when Centrelink requests further information, which can further delay the approval process.

Centrelink call wait times have also blown out for older Australians. Average call wait times for Older Australians have drastically increased from 18 minutes and 59 seconds to 23 minutes and 1 second between 2016 to 17 and 2017 to 18

Ask any Australian who has had to contact Centrelink, and they will tell you their own personal nightmare.

These are just the averages. The reality is, we’ve heard stories of people waiting hours just to speak to someone at Centrelink.

I have had constituents come to my office and tell my staff and I many horror stories about older Australians waiting many more months for their payments, living on the edge of their bank accounts.

Labor understands that age pension payments can be complex. That’s why it’s so important that Centrelink has permanent full time staff who are supported, familiar and skilled to manage the often complex issues facing income support recipients.

I would also add the need for staff with language skills such as Greek, Italian, Arabic, Turkish and Vietnamese speakers and cultural training. But we are going backwards.

Last year, the Liberals cut 1,180 jobs from Centrelink, and now we’ve seen Aged Pension processing times completely blow out. At this year’s budget, Malcolm Turnbull and Scott Morrison axed a further 1,280 jobs from Centrelink.

These job cuts have only made it more difficult to access Centrelink. Morale at Centrelink is at an all-time low. Even our own Parliamentary Liaison Officers have struggled to keep up to date with many constituent cases that I have made representations on going months without response.

The Liberals are simply trying to make it so difficult for Australians to claim income support in the hope they just give up. The perfect example is the robo-debt fiasco where the onus was placed on the individual that their debts did not exist. And lo and behold! 40% of the robo-debts were false.

Let’s contrast this with the previous Labor Government’s utmost respect for Australian pensioners. My parents for example on $28 000 a year, their kids have got to help. Your parents, they all worked hard and deserve better. That’s why Labor delivered the single biggest pension increase in Australia’s history – $30 a week in 2009 - lifting one million pensioners out of poverty.

A Shorten Labor Government will invest $196 million in 1200 new permanent and full-time Department of Human Services staff around the country to improve waiting times and services Australians rely on.

A Shorten Labor Government will not raise the Pension Qualifying Age to 70. Labor will retain the current pension age of 67.

Let me also point out the policy on excess dividend imputation. Labor in Government will end the excess dividend imputation credits, a loophole that gives tax refunds to people who have a lot of wealth but don’t pay any income tax.

Bob Hawke and Paul Keating introduced imputation credits in 1987 to avoid tax being paid twice on company profits and dividends.

These credits allowed shareholders to reduce their income tax when companies payed them dividends on their shares. This system did not allow cash refunds to be given to taxpayers once their liabilities had been eliminated.

So that is, once you had used the cash refunds to bring your tax that you pay to zero.

When the budget was in surplus, John Howard and Peter Costello changed the rules so shareholders who didn’t pay any income tax (at all – that is zero) could also still get cash refunds from imputation credits even though their tax bill was zero.

When it was first introduced, it cost just $550 million a year. Within the next few years, this concession which favours, on all evidence, the wealthiest Australians will cost $8 billion a year – more than we spend on public schools, or child care. It’s three times what we spend on the Australian Federal Police.

Recipients of cash refunds are typically wealthier retirees who aren’t paying income tax. These are people who typically own their own home and also have other tax-free superannuation assets, and they don’t pay tax on their superannuation income.

Australia is the only country in the world that has this fully refundable dividend imputation system – no other country pays out cash refunds for excess imputation credits. Labor will remove dividend imputation credits. However, we recognise that some pensioners did diversify their savings into shares so we decided to ensure thosepensioners are exempt from this policy through the Pensioner Guarantee. Labor’s Pensioner Guarantee – means that if you’re on a full or part pension, you’ll still be able to benefit from any cash refunds you might receive from your share dividends.  Even though you don’t pay tax but because you are full or part opensioner you won’t be caught up in the changes and won’t have to change your financial syructures.

Under the Pensioner Guarantee every recipient of an Australian Government pension or allowance with individual shareholdings will still be able to benefit from cash refunds. This includes individuals receiving the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment, Newstart and Sickness Allowance.

Self-managed Superannuation Funds with at least one pensioner or allowance recipient before 28 March 2018 will be exempt from the changes.

Our changes to the tax system – which will help pay for better local services like healthcare and one hopes the pension itself – won’t affect anyone currently receiving the pension.

This change only affects a small number of shareholders who have no tax liability and use imputation credits to receive a cash refund.

Labor is also aware that the ECCV has some recommendations of its own.

Recommendation 1:

That the Australian Government considers maintaining the current residency requirements for eligibility to receive the Age Pension.

We have opposed the government’s changes and have so far been able to keep them from passing the parliament. We will

Keep working with the cross bench to protect pensioners.

Recommendation 2:

That the Australian Government reconsiders the measure to cease the pension supplement after 6 weeks temporary absence overseas as it disproportionately affects culturally diverse people who maintain close ties with family members.

 

We have opposed the government’s changes and have so far been able to keep them from passing the parliament. We will keep working with the cross bench to protect pensioners.

Recommendation 3:

If enacted, that the Australian Government amends the measure to cease the pension supplement to protect seniors who resided outside of Australia at the time of enactment.

 

We have opposed the government’s changes and have so far been able to keep them from passing the parliament. We will

Keep working with the cross bench to protect pensioners.

Recommendation 4:

If the measure to cease the pension supplement is enacted, that the Australian Government ensures safeguards for people who can request for exemptions where circumstances permit.

 

We have opposed the government’s changes and have so far been able to keep them from passing the parliament. We will

Keep working with the cross bench to protect pensioners.

Recommendation 5:

That the Australian Government considers increasing the maximum rate of Rent Assistance to assist renters solely reliant on the Age Pension.

 

We know that the cost of housing is a big issue for pensioners. Particularly in Melbourne, where Costa have been rising faster than elsewhere.

There are two sides to this issue. The other is access to quality public and community housing - with rent capped at a fair proportion of the pension.

We are going to have more to say about housing affordability - but we know that in the long term, we need to see more affordable, quality houses in the areas where people need them.

Recommendation 6:

That the Australian Government considers indexing rent maximum to national rent levels instead of Consumer Price Index (CPI).

See above.

Recommendation 7:

That the Australian Government comprehensively reviews the Commonwealth Rent Assistance supplement and works to ensure that people can access housing assistance who need it the most.

See above.

Recommendation 8:

That the Australian Government considers assigning an independent body to review all pension concessions, in order to ensure that the current concession rates adequately cover expenses of pensioners.

The Liberals have cut over a billion dollars from concessions. Thankfully most states - like the Victorian Government - have pick s up the slack.

What are the main issues people are facing with concessions?  I will take that back to our shadow minister as a recommendation.

In the middle of the circus in Canberra last week some good news came out of Parliament which was forgotten. The Liberal’s planned cut to 1.5 million pensioners energy supplement was abandoned because it stalled in the Senate. From day 1 Labor opposed these cuts and on Wednesday it was announced that the Government would no longer be trying to make this cuts.

For 834 days, Malcolm Turnbull and Scott Morrison tried to cut the pension for over 1.5 million Australians, by scrapping the energy supplement for new pensioners.

Scott Morrison’s 2018 budget locked-in their cut to the energy supplement which would deliver a cruel blow for pensioners who are already doing it tough under the Government.

The legislation to implement this cut was before the Parliament, and would scrap the energy supplement for anyone who has become a new pension or allowance recipient since 20 September 2016.

If the Liberals had gotten this legislation through, in the 2020-21 financial year alone more than 592,000 age pensioners will have less in their pockets every fortnight amounting to a cut of $14.10 per fortnight to single pensioners or around $365 a year, and a cut of $21.20 a fortnight or around $550 a year to couple pensioners.

Labor has been fighting the Liberals’ cuts and will continue to fight their cuts.

Culturally and Linguistically Diverse (CALD) pensioners face many barriers such as language barriers and cultural barriers. Medical research has also shown that people from CALD backgrounds revert back to their first language as they get older.

Accessibility of services because of their ethnicity. medical accessibility.

Ageing first generation migrants. Their kids have done well. Sacrifice for their children. They need to be looked after by the state and by their children. They deserve to retire without difficulty after so many years of sacrifice, it’s not easy to come to a new country and rebuild from the beginning.

[ENDS]