The Pension Loans Scheme is an important one. It allows older people in our community who are asset-rich but income-poor to have a source of income. But, of course, like everything under this government, it’s been botched, and now we are dealing with a bill that attempts to fix a couple of the problems in the dying days of this parliament so that, in another case of spin and marketing, the Morrison government can say it’s done something for pensioners.
The Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Bill 2021 addresses some of the inadequacies of the current Pension Loans Scheme and, on that basis, deserves to be supported. But it doesn’t address all the flaws in the scheme. And as the member for Barton has made clear in her amendment, which I support, it doesn’t make up for this government’s neglect and mistreatment of pensioners over its many years in office. Changing the name of the Pension Loans Scheme is a typical move from this government. They have brought forth a bill to change not much more than the name of the scheme. The name of the scheme has been changed to the Home Equity Access Scheme. The bill also amends the Social Security Act and the Veterans’ Entitlements Act to improve the flexibility of the scheme. Again, that is a change to be welcomed.
The bill adds two new features to the scheme. There is a ‘no negative equity’ guarantee so that participants don’t repay more than the market value of their property regardless of their debt. This is a necessary protective requirement. It is in place for commercial reverse mortgage products and it should provide people some peace of mind around taking up this scheme. The bill also allows for two lump-sum advances in any 12-month period, with each lump-sum being capped at 50 per cent of the maximum annual rate of the age pension.
These are positive changes, but they probably don’t do enough to drive uptake of the scheme, which remains at a really low level. There a number of reasons for that. A lot of them go to how people understand the scheme and how it has been promoted to them. It goes to cultural issues. It goes to the complexity of financial products. It goes to the interest rates that have been set by this government around it. And it also goes to who is able to access the scheme.
One of the unfinished pieces of business that doesn’t seem to be addressed by this bill is that the Pension Loans Scheme still can’t be accessed by residents of retirement villages, where people own their home but don’t own the land the home is on. I see from many advocates for older Australians that that is something they would like to have addressed. Unfortunately, this has not been addressed as part of this change that the Morrison government is bringing forward. Again, it is typical of this government that in drafting a bill, in making changes, they failed to listen adequately and consult adequately with stakeholders about how they can best improve people’s lives, particularly the lives of older Australians and pensioners in our community.
As the member for Barton has outlined in her amendments, this government always gets it wrong when it comes to pensioners. They’re focusing on a marketing effort with this bill by giving the scheme a new name. They’re not doing the hard yards of actually doing the work to improve the scheme across the board and drive the uptake that would make it a success. These changes come in the dying days of this government, at least two years too late. During the past two years, participants in this scheme have been paying a higher interest rate than almost every mortgagee because this government is taking pensioners’ money instead of doing the right thing by senior Australians. So now again we have a moment where I presume they have heard from their electorates, have spoken to pensioners, realise they have done the wrong thing by them and are trying desperately to fix that up before an election.
I want to be really clear that, in contrast to this government’s last-minute efforts, Labor believes that this scheme can do good things for our country. It can do good things for older people and we would make it work for all older Australians. We would allow people to genuinely unlock their housing assets and improve their retirement income. And, of course, it is not just in fixing this scheme that a Labor government would be on the side of pensioners. Across the board, Labor would stand up for pensioners in a way that this government has just failed to do.
Let’s go through a quick review of the government’s inaction on pensioners in their history in office. In the infamous ‘slash and burn budget’ of 2014 the government tried to cut pension indexation, which would have left pensioners living on some $80 a week less within 10 years—$23 billion would have been ripped from the pockets of the pensioners of Australia. This was what an earlier incarnation of this government was proposing to do to older Australians. In the same budget, the government cut $1 billion from pensioner concessions, axed the $900 senior supplement and tried to reset deeming rate thresholds. What a record! It goes on: in 2015 the government did a deal with the Greens to cut the pension for approximately 370,000 pensioners by as much as $12,000 a year by changing the pension assets test. In the 2016 budget there were two things: an attempt to cut the pension to around 190,000 pensioners as part of a plan to restrict overseas travel for pensioners to six weeks, and trying to cut the pension for more than 1.5 million Australians by scrapping the energy supplement for new pensioners.
The government’s record of policy misery for pensioners continues. They spent five years trying to increase the pension age to 70, waited four years before adjusting the deeming rates for aged pensioners even though the Reserve Bank continually reduced its rates over the same period. I can say with confidence that I hear about every time this government fails to adjust the deeming rates. I hear about what that means for older people in my electorate—the fact that they have been left consistently in a very unfair position by this government’s failure to get deeming rates right over its time in office. This is the government that wants to axe the pension supplement from pensioners who go overseas for more than six weeks, which would see around $120 million ripped from the pockets of pensioners. These are people who might be looking for a family reunion trip to the old country. You can’t do that and keep your pension. They want to make pensioners born overseas wait longer before qualifying for the aged pension by increasing residency requirements from 10 to 15 years. Everything this government does seems to be designed to make the lives of pensioners harder.
A Labor government would be different. I want to be really clear about how important pensioners and older Australians are in my community. It is a privilege to represent them in this place and to stand up for them. These are the people who built this country. We say it a lot in this place, but it doesn’t seem to translate into action. They built this country and they deserve our respect. They deserve a pension system that they can rely on and that they can trust into the future. The track record of this government demonstrates that that is not what they have delivered. At every opportunity, the Morrison government and the Liberal-National governments that preceded it have taken the chance to try and slash and burn the pension. It’s not good enough.
Pensioners deserve so much better than this government. They deserve so much better than a record of trying to squeeze or trying to take away a pension. Now a name change is meant to fix things in the dying days of this parliament. Pensioners deserve a government that understands they should be supported now and into the future; a government that is not obsessed with trying to find savings by squeezing the aged pension wherever it can; a government that actually understands what it means to be responsible, to be living on a pension, to be budgeting on a pension, to rely on a pension for your day-to-day life and your participation in the community. This is something I hear very often from constituents in my electorate, particularly during the pandemic. Pensioners feel like this government just hasn’t understood how their participation in the community has been impacted, and how the support for pensioners through this pandemic hasn’t really recognised the fact that, like all of us, they were separated from loved ones and from community, and they don’t feel supported by this government through this time.
While this bill goes some way to fixing this scheme, it doesn’t far enough. I wholeheartedly endorse the amendments moved by the member for Barton. I urge this government to do better by the pensioners of Australia.