AGAINST Di 7
SPEECH BY THE PRIME MINISTER
AUSTRALIAN COUNCIL OF SOCIAL SERVICE CONGRESS
CANBERRA 8 SEPTEMBER 1983
This Congress could hardly be more timely or i~ iore
opportune, coming as it does so soon after the presentat ion
of a Labor Government's first national Budget for eight
years. The timeliness springs not only from the
opportunity the Congress provides for all of us concerned
with advancing the cause of social security and community
welfare in this nation to review the work of the Government
in this vital field during its first six months and it may
seem longer to many, but it is only six months on Saturday
since we were sworn in.
But, the added timeliness of this Congress comes
from the fact that, because of the work of the pa st six
months, and not least the new directions foreshadowed in the
Budget, the social welfare debate in this nation has taken
on a relevance, a topicality and I hope, a maturity, that it
has not had for at least seven years.
The whole philosophy of the Australian Labor Party,
and certainly the aim of this Labor Government, require that
the approach to social welfare questions should be
absolutely central to the entire debate about the course and
shape of the future of this nation.
For these issues go to the very heart of this
nation's vision of itself and go to the very heart of our
aspirations for a more just, a more equal and a more humane
society. For if Australia is t'o have something special to
say to the world if we are/ to stand among the nations of
the world as having something relevant : and identifiably
Australian to say and if we are to give worthwhile meaning
to the Australian experiment and the Australian experience,
then that special Australian contribution must turn on this
central question of whether oi not we have Succeeded in
securing, for all our people, fairer shares of the nation's
wealth and a larger measure of genuine equality.
At this stage it has to be acknowledged that no
nation es basically rich as ours, which nonetheless has to
confess the existence of at least one and a half million of
its fellow citizens living in actual poverty, can claim
success in achieving its-great goals of a more equal and
humane society. It is t.-oth ese goals that the Government
has tried in its first six months to address itself', even in
the midst of economic difficulties and complexities not
experienced in this country for more than 50 years.
We have not taken the view that reform of the
social security system i3 something that must await national
economic recovery. We have not tried to put these questions
on the backburner Indeed, at a t-ime of deep ec -onomic difficulties
such as vie inherited, the pursuit of greater equality takes
on added dimensions. The whole task of economic recovery
from the circumstances which we inherited cannot be achieved
unless there is sharing of restraints and a sharing of
inevitable burdens by those comparatively better able to
bear them. And that is the approach we have asked the
community to accept.
It was the approach behind the National Economic
Summit Conference. It was the approach of the nineteenth of
May Statement. It was the approach of the Budget itself.
We have not sought to use the economic crisis as an
alibi against reform.
On the contrary, we believe that the very
seriousness of the general economic problems lends an added
urgency to the need to tackle the reform of the social
welfare system. Indeed, the inadequacies of the system are
themselves part and parcel of the wider economic problem.
The clearest specific example of this is of course
the question of unemployment itself the most notorious
ceuse of the new poverty in our midst. But even if one
coulid ignore the human tragedy involved and no-one in this
room ignores it the sheer economic cost of unemployment,
and specifically the tremendous fiscal burden the provision
of unemployment benefits pla~ es on the Budget is something
which cannot be overlooked.
So beyond our deep philosophical commitment there
are pressing and profound reasons why reform of the social
welfare system occupies a central position in our total
approach to government and such a high priority in the
application of that approach.
I should take this opportunity to thank the Council
for its participation and contribution to the work of the
National Economic Summit in April.
The views put by the President, Mr Bruce McKenzie,
were significantly reflected in key sections of the Summit
Communique.
In calling for all-round restraint, the Communique
specifically stated:
While the Summit recognises the difficulties for
Australian society in meeting the increasing costs of
social security, deprived groups must not be subject
to the restraints mentioned above. It remains the
overwhelming desire of th" nation to ensure that those
in genuine need are adequately supported, whether they
be the sick, the aged, the disabled, the unemployed or
the impoverished. To this end, the Summit believes
that a real improvement of their entitlements should
be a major priority."
I believe that my Government has honoured both the
spirit and the letter of this important section of the
Communique, as well as of the Communique as a whole.
The Summit recognised that the reduction of
unemployment remained the over-riding problem we face.
When we took office there were more than 700,000
people looking for work. That figure is more than double
the number of people looking for work when the Fraser
Government took office. An increase of 400,000 unemployed
people was the legacy of seven years of fighting inflation
first. It is only through a return to steady economic
growth that long term jobs can be created, and that the
living standards of all Australians can be raised. Our
Budget has provided the framework for this economic growth.
It has provided an adequate, but not excessive stimulus to
economic activity. We have established policies designed to achieve
growth, while reducing inflati'on. As the private sector
recovers we are determined tb ensure that the public sector
does not contribute to excessive pressure on interest rates.
Higher inflation or interest rates would threaten the
sustained economic recovery that is necessary if
unemployment is to be reduced.
In May we announced the introduction of the
Community Employment Program, which will be used to create
jobs that will benefit the community. This program wil~ l
give priority to those CES registrants who have been
unemployed for at least nine months, those who have never
worked, and those most grossly disadvantaged in the labour
market, such as Aborigines. Furthermore we will guarantee
that women will be given-equal access to jobs created under
the program. The Government has initially allocated $ 300
million, which will be used to create 40,000 new jobs in
1983/ 84. In a full year the program will create 70,000
4.
jobs. This is in addition to the $ 100 million allocated
* under the Wage Pause Program, which is expected to create
10,000 jobs. Altogether we will be spending $ 958 million on
employment and training programs in 1983/ 84 an increase of
per cent on 1982/ 83 expenditure. In total we expect
employment to grow by about 90,000 over the course of
1983/ 84. But as well as improving job prospects for the
unemployed we have also taken the first steps towards
significantly increasing the assistance available while
people are unemployed. In particular:
We have taken a major stop towards fulfilling our
election commitment of bringing the single adult
benefit rate into line with the pension. By May
1984 the benefit rate will have increased by some
22,1 in a little over a year. From now on it will
be indexed. This is in stark contrast to the
action of the previous Government, which removed
indexation for this benefit, and reduced its real
value. In addition we have doubled the amount of income
the unemployed may receive withcut any loss of
benefit. We will significantly assist those beneficiaries
who have children, by our decision to increase
additional benefits For children by 20.1, and we
shall extend Mothers/ Guardians Allowances to single
unemployment beneficiaries with children.
Young unemployed people will get an additional
$ 5.00 per week from November. Apart from the $ 4.00
which the Fraser Golvernment. managed to find in
its 1982 pre-election budget, this is the only
increase that has occurred since 1975.
Finally, in recognition of the difficulties facing
those people living in remote areas, we will
introduce a remote area allowance from May 1984
which will benefit all, pensioners and beneficiaries
in those areas whose incomes are too low to benefit
from similar assistance provided through the tax
system. This package of job creation and income security
initiatives reflects the very high priority the Government
has assigned to assisting the unemployed, despite the
difficult budgetary circumstances we faced on coming to
office.
I
The second major priority in framing the welfare
budget has been assistance for children of low income
families. Because additional pension for children is not
indexed, and was not regularly adjusted by the previous
Government, it had fallen by some 35 per cent in real terins
since 1975. Assistance for the children of pensioners will be
increased by 20% 1 from November, which will go part of the
way to meeting this shortfall.
Assistance is also being increased for children of
non-pensioners, by increasing the level of Family Income
Supplement and relaxing its income test. This means, for
example, that from March next year a family with 2 children
on $ 11,000 per year will receive a supplement of almost $ 93
per week, which is more than double the current rate.
Thus our main priorities in the welfare area have
been the unemployed and low income families with children,
who have not benefited from indexed payments. Both these
groups suffered in recent years through very significant
decreases in the real level of assistance.
The general pension rate, by contrast, is indexed
in line with the CPI, which has meant that over the last 6
months pensioners have received an income increase of nearly
7A', while average weekly earnings have increased by only
But the inequities and inadequacies of the system
will not be removed simply by increases in the general
pension rate. If no account is to be taken of need, then
the inherent inequities will become entrenched and it will
be impossible to increase the rate for those most in needthat
is, for the vast majority of pensioners. In this
regard it is important that the pensioners themselves
understand the arithmetic of changes to retirement
allowances that have been in~ tiated by the Government.
Priorities demand that we begin our income security
reforms by focussing on increased expenditure for the
neediest. And that is what we have done.
In the May Economic Statement we began to tackle
inequities in the pension system with the revised income
test arrangements for pensioners over 70. This was
explicitly done to enable welfare expenditure to be directed
to those individuals most in need. Its introduction only
affects those with substantial private income married
pensioners with private incomes below $ 500 per week are
still eligible for a part pension.
In the Budget we have followed up this first
initiative with a further reform to the pension system. I
am talking about the intrcduction of the Assets Test. It is
simply unfair that people with substantial assets are able
to receive a full pension, while others miss out because
they have a small income, even if they aen sest
fall back on. Clearly this situation is completely out of
line with the Government's objective of a just distribution
of social welfare payments. It has allowed an increasing
number of people to circumvent the income test through
artificial avoidance schemes.
The details of the assets test on pensions are
being worked out, and we are consulting with ACOSS and other
interested groups before taking final decisions on this
matter. Nonetheless I should remove any misunderstanding
about the impact of the new arrangements on pensioners with
little means. The great majority of pnierwllnot be
disadvantaged by the assets test. After taking account of
the " free-area" for the pensicn, a single pensioner will be
able to own non-exempt assets valued at up to $ 17,000 and
still be entitled to a full pension, while a married
pensioner couple will be able to receive the full pension
with non-exempt assets up to $ 28,500. It should be
emphasised that these figures do not include a pensioners
home, car or personal effects.
The Government has also acted to rectify the
inequitable tax treatment of superannuation lump sums. Less
than half the workforce is covered by superannuation
schemes, and the considerable tax advantages enjoyed under
the previous arrangements meant that burden of revenue
collection was not being shared fairly. Recipients of lump
sums-have also been advantaged vis-a-vis people who receiv~ e
their superannuation in the form of a pension.
Together with the asdets test, this will
substantially reduce the double-dipping that has been
occurring, whereby people largely escape tax on their lump
sums and then qualify for Social Security pensions.
Having said this, I would add that double-dipping
is nut the only reason for the assets test and the new tax
arrangements for lump sums. These measures are designed to
remove fundamental inequities in both the tax and pension
systems. And, of course, each of these specific decisions
must be placed in their wider context of a complete and
continuing program for reform.
Removing the inequities of the social welfare
system and removing the inequities in the tax system go hand
in hand. They are both part of our total approach to making
Australia a more just society.
And all Australians have to realise that unless our
taxation reforms succeed, our efforts to reform the social
welfare system and to enhance the benefits available to
those most in need could eventually fail.
If those whose need is least-., if those already in a
highly privileged position, refuse to forego even the most
marginal part of their privileges, then there can be no
relief, no real improvement, for the overwhelming majority
of those whose sole or main source of income is their social
security entitlement. If we are to raise significantly the general level
of benefits to all who need them, then we have to reduce the
special and unnecessary privileges of some.
That is a fact of life in these times of great
economic difficulty. But it will remain a fact indeeJ,
its force will increase as the number of Australians
dependent on the pension grows as a proportion of those in
the work-force. Let me be more specific about the demographic
facts. Over the next ten years the number of working age
Australians for each person over 65 will drop to about
Looking further into the future, fifty years from now this
number is expected to drop to about 3.
So in the nineteenth May Statement and in the
Budget itself we have set in train decisions whose real
results will come not this financial year or even next, but
will begin to bear fruit in the years ahead.
It would be tragic if short-sighted consideraton of
short-term political or personal advantage were allowed to
retard the reform of the social welfare and taxation systems
upon which we have embarked.
This Government stands ready to consult with the
community and representative groups to improve measures upon
which a decision in principle has been taken, or to remove
unforeseen anomalies that may be involved in those
decisions. We have given abundant proof of that.
But I make it quite clear that we cannot, as a
responsible Government, submit to the piece-meal demolition
of fundamental Budget proposals or to threats such as have
been made by the Opposition in the Senate. If these threats
are carried out, the whole strategy of the Budget would be
undermined and the principles of justice and equity for
which we stand would be liegated.
We have taken difficult decisions, to re-order
priorities and redistribute resources towards the
disadvantaged.
Some of the things we wanted to do and to which we
have a continuing commitment, have had to be delayed. There
. are real constraints on the pace of change. Deficits, for
example, have to be limited. But we shall continue the
process of re-ordering priorities and improving equity, and
in the future there will be further opportunities to
redistribute more in favour of the disadvantaged.
But that can happen only if the reform measures we
have undertaken already are accepted, most immediately by
the Senate, but ultimately by the people of Australia
themselves as being necessary for the creation of a more
just, more equal, more humane society.
The current Labor Government believes that only a
more just Australia, an Australia that is seen by most of
its citizens as a fair society, will be able to sustain the
changes that are necessary for a return to sustained growth
and high levels of employment.
I trust you can see that the Government has
achieved a great deal in only six months in office. We are
committed to further increases in assistance to the needy
members of the community, and further reforms of the
taxation system. Your theme for this conference justice
and equity well express the goals for a revitalised and
renewed Australia which my Government has set for itself.
-Y 4
,,, AU6TK'ALA , L
I
PR E STE i
r B 1 g!
THE FOLLOWING ARE CHANGES MADE TO THE PRIME MINISTER'S
SPEECH TO THE AUSTRALIAN . COUNCIL OF SOCIAL SERVICE CONGRESS,
8 SEPTEMBER 1983.
Page paragraph But the inequities and inadequacies of the system
will not be removed simply by increases in the general
pension rate. If no account is to be taken of need, then
the inherent inequities will become entrenched and it will
be impossible to increase the rate for those most in need
that is, for the vast majority of pensioners. In this
regard it is important that the pensioners themselves
understand the arithmetic their own constituency. The
country's capacity to provide decent levels of assistance to
the majority, who in fact need such assistance from the
community, requires that we do not dissipate those limited
resources on those who do not requiile such assistance.