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Whitlam Government Increases Pensions, Unemployment And Sickness Benefits

One of the first legislative acts of the Whitlam government in 1973 was to increase social security benefits.

On February 28, 1973, the Minister for Social Security, Bill Hayden, introduced the Social Services Bill 1973 into the House of Representatives.

The bill sought to increase all pensions and unemployment and sickness benefits by amounts ranging from $1.50 to $14.00 a week. Hayden said the cost of the measures would be $126 million in a full year.

This is Social Security Minister Bill Hayden’s Second Reading Speech on the Social Services Bill 1973.

Mr HAYDEN (Oxley) (Minister for Social Security) – I move:

That the Bill be now read a second time.

HaydenThe Bill provides for generous increases in all pensions and in unemployment and sickness benefits by amounts ranging from $1.50 a week to $14 a week. Furthermore it provides for payment of the pension increases to be made retrospectively from and including the first pay day for each category of pension occurring after the election of this Government. The cost of these proposals, and others benefiting dependants which I shall outline a little later, will be $126m in a full year and $66.2m for this financial year.

This Bill provides a common benefit rate for all pensions and for unemployment and sickness benefits of $21.50 a week standard rate and $37.50 a week married rate. In doing this it removes several seriously unjust, penalising anomalies. This Bill has promptly honoured the undertaking of the Prime Minister made when he delivered the policy speech of the Australian Labor Party. He said then:

“The basic pension rate will no longer be tied to the financial and political considerations of annual Budgets. All pensions will be immediately raised by $1.50 and thereafter, every Spring and every Autumn, the basic pension rate will be raised by $1.50 until it reaches 25 per cent of average weekly male earnings. It will never be allowed to fall below that level.”

The Bill does more than give effect to the undertaking to increase immediately the basic rate of all pensions by $1.50 a week. In setting common benefit rates for all pensions and for unemployment and sickness benefits we have largely established the principle that common needs deserve common rates of benefit.

We still have some way to go before we fully realise this objective. In the near future I hope to be making further statements on behalf of the Government outlining additional steps which will be undertaken to realise fully this objective. In the meantime the goal already achieved is an extremely important one; it represents a great advance in social values and the appreciation of human worth. Moreover it locks into an ongoing programme whereby benefit rates will be automatically adjusted twice a year until they reach 25 per cent of average weekly earnings. Thereafter there will be regular automatic increases to retain this relationship to average weekly earnings. But more on this later.

It is worth noting some of the more objectionable forms of discrimination which will be eliminated by this Bill. For instance we have removed the long-standing, irritating penalty against the class B and C widows who were deemed eligible for widows pension but paid $2.75 a week less than a class A widows pension. We have ended the punishing meanness with which unemployment and sickness benefits have been paid. A man supporting a wife and 2 children, drawing unemployment benefit and even after allowing for child endowment, has been paid a benefit rate some $17 a week below the updated Melbourne University poverty line. There will be no more of this poor-house, alms-giving mentality which sees merit in official meanness and virtue in suffering, as long as it is in others.

The bulk of the unemployed today are the innocent social casualties of the disastrous economic policies of the last Government and its 1971 Budget. These people and their unhappy families neither sought to be, nor wish to remain, among the ranks of the unemployed. The need they suffer as a result of the meanness of unemployment benefit rates and the humiliation they suffer from unwanted unemployment are the penalty visited on them by the blundering economic policies of the last Government. One of the most objectionable aspects of the practices of the previous Government was the complete denial of any benefit at all for dependent full time student children over 16 years of an unemployment or sickness beneficiary. We have ended this injustice practiced by mean men for too long. Henceforth these student children will attract full benefit rights irrespective of age.

In view of the insignificant cost of this proposal – $600,000 in a full year and $200,000 for the remainder of this year – the dogged persistence with which previous governments have clung to this practice of denying and depriving the dependent student children of the needy unemployed is beyond any reasonable comprehension. Unfortunately some people in the community worry that a modest rate of unemployment benefits, as we propose, will destroy the industry and moral fibre of the nation. Given the fact that the weekly rate of benefit of $21.50 for a full week is much less than a great many business representatives pay for a single meal with a client – largely at taxpayers’ expense, of course – I doubt that anyone drawing benefits will be corrupted by any new found lavishness in his life style. Unemployment benefits do not pander to lazy layabouts. The work test administered by the Department of Labour through its employment offices effectively controls the work-shy.

For those most tragic social casualties – the homeless drifting males (and sometimes females) undermined by an unstable personality and reinforced in their sense of failure and worthlessness by their peer group and the insulation an aspiring middle class society tends to set between itself and these people – we are doing something positive right now. For too long attitudes to these people have been negative and repressive. Society has been prepared to outlay large amounts of money for its police, courts and prisons to repress these people. Considerably less money spent on rehabilitation and social aid programmes will provide greater benefit for society. It is this positive role which we now stress. A working party of top social welfare administrators and other experts has been appointed by this Government to investigate and report on a suitable programme.

We are genuinely committed to a belief in the supreme importance of human worth, the individual’s entitlement to treatment with dignity and his right to self respect.

I will now outline the main provisions of the Bill before the House. The standard rate of pension for aged persons, invalids and widows with children is to be. increased by $1.50 a week to $21.50 a week. As I have just mentioned, the standard rate will also apply to widow pensioners without children in future, which means that these women will receive increases of $4.25 a week. The married rate of pension is to be increased by $3 a week to $37.50 a week, that is, increased by $1.50 a week to $18.75 a week, for each partner. The age limit of 21 years for the payment of additional age, invalid or widow’s pension for full-time student children as well as the additional guardian’s or mother’s allowance, as appropriate where the standard rate applies, will be removed. Payment of additional pension for full-time students together with mother’s or guardian’s allowance, if applicable, will continue without regard to the child’s age until either eligibility for pension ceases or the child’s studies cease. Unemployment or sickness benefit received by a spouse will be exempt for the purpose of calculating age or invalid pension. Unemployment benefit rates and also sickness benefit rates where payment has not been made for a continuous period of more than 6 weeks are to be increased by $14 a week to $21.50 a week for unmarried persons 16 to 17 years of age, by $10.50 a week to $21.50 a week for unmarried persons 18 to 20 years of age, by $4.50 a week to $21.50 a week for unmarried adults and unmarried minors with no parent living in Australia and by $12.50 a week to $37.50 a week for married beneficiaries whose wives are dependent upon them.

Sickness benefit rates where payment has been made for a continuous period of more than 6 weeks will be increased by $8.50 a week to $21.50 a week for unmarried persons 16 to 20 years of age, by $1.50 a week to $21.50 a week for unmarried adults and unmarried minors with no parent living in Australia and by $9.50 a week to $37.50 a week for married beneficiaries whose wives are dependent upon them. The age limit of 16 years for the payment of additional unemployment or sickness benefit in respect of a child will be removed where the child is engaged in full-time studies. Payment will therefore be continued without regard to the child’s age until either eligibility for benefit ceases or the child’s studies cease. Any age or invalid pension received by a spouse will be exempt for the purpose of calculating the amount of unemployment or sickness benefit payable. I emphasise that these measures represent a first step towards ensuring that social security beneficiaries receive a rightful share of the community’s increasing prosperity.

When defending pension levels in the past, honourable members will recall that the former Government consistently compared increases in the rates of pensions with upward movements in the consumer price index. However, as I have stressed on so many occasions, the relevant comparison to make is to relate pension increases to increases in average weekly earnings; average weekly earnings themselves give a fairly good indication of the average standard of prosperity in the community. I have no wish to draw comparisons between the position as it was over 20 years ago with what it is now but I feel that I should say that, although the Liberal Country Party Government did follow a policy of increasing pensions faster than rises in prices generally and there were some significant increases during their term in office, from about the beginning of the 1950s the pension as a percentage of average weekly earnings dropped quite dramatically and it never fully recovered from that position. This situation will be corrected by this Government. The increase proposed in this Bill lifts the standard rate of pension as a proportion of average weekly earnings to the highest level of any time in the last 6 years. This position will continue to be improved. The following table which I seek leave to incorporate in Hansard gives a comparison of a selection of existing benefit rates and of the rates we are proposing.

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