Ms Catherine King (Ballarat, Australian Labor Party, Shadow Parliamentary Secretary for Treasury) Share this | Hansard source

It is a delight to be able to second the MPI, moved by the member for Gellibrand, which seeks to shine a spotlight on what is happening for Australian families across this country—a spotlight which the Minister for Health and Ageing seems desperately keen to avoid. Families are under more financial pressure than ever before. Australian families are struggling to make ends meet under the growing weight of record household debt, rising interest rates, pressure at work, rising health costs and reduced family time. For the last six months, as part of Labor’s Family Watch Task Force, Labor MPs and senators have met with families in shopping centres and markets around the country. We have surveyed households in every state and territory. Far from being relaxed and comfortable after a decade of the Howard government, Australian families are increasingly anxious about their household finances. They are also worried about the Howard government’s attack on working conditions and the neglect of skills and training and what that means for their children. Australia’s prosperity depends on the hard work and commitment of Middle Australia, and Middle Australia deserves a government which actually focuses on its needs.

The rising costs of health and child care and the adverse impacts of the government’s industrial relations agenda are placing extreme pressure on families. Family budgets are not just blowing out in one area. The cost of living is rising across the board, whether it be housing repayments or rent, weekly grocery bills, petrol, utility bills, health care, childcare fees and education expenses. All of these cost pressures are having a severe impact on family budgets and family life. It is clear that growing financial pressure on household budgets is influencing critical decisions which families are taking. Parents told Labor’s Family Watch Task Force that financial constraints are denying them the opportunity to make real decisions about the size of their families and about time out of the workforce after childbirth. Middle Australia is working harder than ever before, with longer hours and longer commutes, and second and third jobs are eroding family life.

Parents are worried about the impact of health costs on their ability to ensure that their children get the health and dental care they need. They are also concerned about what the rising cost of education means for their children’s future. Families are being hampered by the complex interaction between the government’s tax and welfare systems, and they are being actively hurt by the government’s industrial relations legislation. Family income is not keeping pace with the increased costs of living, leaving middle- and low-income earners struggling to make ends meet. Many low- and middle-income families have simply been overwhelmed by the growing financial burden. That fact was demonstrated in the report by Catholic Social Services Australia entitled Dropping off the edge, released this week.

The shadow minister for health has outlined how the rising costs of health care and the health system are affecting families. Lack of funding for areas of prevention, combined with increased costs of seeing a GP and accessing medicines, is contributing to preventable hospital admissions in this country. Such admissions place even greater strains on both the hospital systems and families.

Medical and healthcare expenses are the fastest growing cost category for Australian families. The Australian Institute of Health and Welfare says that personal health bills are rising at a rate of 6.9 per cent per year, which is double the rate of inflation. At the same time, the ability of the Pharmaceutical Benefits Scheme to deliver affordable medicines is being undermined as the Howard government takes every opportunity to strip funds out of its budget.

We have seen yet again a rise in private health insurance premiums. These rises, coupled with an increase in gap payments, have occurred despite the public rebate and the Howard government’s promise to keep rises under control. The health of children is a major source of anxiety for parents. The last thing parents need when their child is ill is the worry about whether they can afford to pay for treatment.

The level of household debt has skyrocketed in Australia, with average household debt now 125 per cent of disposable income. People are having to spend more money than they are earning; 83½ per cent of all household income is spent on housing. That figure is just in respect of housing which people occupy. The stark reality for working families is that there is no such thing as a small interest rate rise and no such thing as a small mortgage. People have more debts and larger amounts owing. The average home loan is now $300,000. The sheer size of debt, coupled with the government’s inability to keep a lid on inflation, has pushed up interest rates. This means that people are now paying 50 per cent more for their mortgages than they were when Labor was in government.

Despite the rhetoric about lower interest rates, the Howard government is taking 50 per cent more out of the pockets of working Australians just so that they can stay in their own homes. Add to this the vast amounts of consumer debt that each working family is carrying and it will become clear why Australian families are struggling. Total Australian household debt has now reached $1 trillion. That is equivalent to $125,000 for every household. Labor’s Family Watch Task Force was appalled to hear that some families are having to rely on credit drawn at 48 per cent interest in order to make ends meet.

Such massive personal debts create huge tensions within working families and, as shown in Dropping off the edge, often lead to family breakdowns and other social problems. These debt levels are simply too much for many working families. Mortgage repossessions have been skyrocketing since 2003 as working families are pulled under by debt. In Victoria alone there has been a 210 per cent increase in the number of repossessions. This is higher than in the recession period of the early nineties.

Access to secure, appropriate and affordable housing is an essential ingredient of a quality family life. Unfortunately, many families are denied that access. Many families are trapped in a vicious cycle of rising rents for low-standard accommodation as an ever growing number of families are denied access to the benefits of home ownership. Out-of-reach house prices and increasing interest rates, combined with rises in other costs of living, mean home ownership is no longer an achievable goal for many families.

Housing affordability is tied to other costs of living. As working families are having to spend more to meet the climbing costs of child care, health care and education, less money can be put aside for a housing deposit. Tightening rental markets have seen big increases in rent across the country, which has put decent accommodation beyond the reach of many working families. We also have 100,000 homeless Australians on any given night. With $3.2 billion being ripped out of the Commonwealth-State Housing Agreement over the last 10 years, thousands of Australian families have been denied access to rent assistance and have had their eligibility restricted.

In the area of child care, wherever you go in Australia families want to talk about child care—about the lack of availability, rising costs and the difficulty of finding care for young teenagers. Since 1996 childcare affordability has declined for almost all Australians. Childcare costs have grown three to five times faster than the CPI over each of the past three years and low- and middle-income families are being left behind in the wake of these fee rises. Working Australian families often have little choice but to access child care in order for both parents to work to pay for housing, health costs and the ordinary costs of living. These working Australian families are slapped with childcare bills that eat up their earnings. Many working women across Australia are being punished by the government’s system that makes it unaffordable to work but impossible to stay at home to look after their kids. The government’s own members have referred to the childcare system as ‘a shambles’ and the government’s policy in this area has been an absolute failure in keeping child care affordable for Australian families.

In the area of industrial relations, contrary to the Howard government’s promise that life would be better for women under Australian workplace agreements, the ABS data that we saw yesterday shows that it certainly is not. The Australian Bureau of Statistics released the employee hours and earnings for May 2006. The data indicates that women on Australian workplace agreements are earning less than Australian women on collective agreements. These statistics clearly show that there is a big earnings gap between those women who entered into an AWA before Work Choices, when the no disadvantage test applied, and those on collective agreements. You can hardly imagine what the gap will be now that the no disadvantage test does not apply.

These are just four areas where families are under pressure. The reality for many Australian families is that they are sinking under the growing burden of debt as they simply try to keep up with the basic costs of living. Families are asking why their pay packets are not stretching as far as they used to; why their pay is spent before they actually seem to get it; why they cannot seem to save; and why their debts never seem to go down but the cost of living seems to keep going up. The reality for many families is that child care and health costs, household debt and housing costs are becoming increasingly unaffordable. Australia’s prosperity depends on the hard work and commitment of middle Australia. Middle Australia deserves a government that is going to work for them. (Time expired)

See this speech in context