Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

It is with great pleasure that I rise to speak in support of the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011. It is a bill that will have a positive effect on many of my constituents in Parramatta and it is a bill which delivers on a number of election commitments that the government made prior to the 2010 election—commitments that I was pleased to see made and which I am even more pleased to see on their way to delivery today.

There were three main election commitments and all are very special for people in my electorate. The first was to provide for baby bonus claimants to have a large proportion of their baby bonus paid to them up-front from 1 July 2011. The second one provided benefits to families with children aged between 16 and 19 who are in full-time secondary or vocational education, and the third extended the pension work bonus to better reflect the realities of many pensioners who work on an ad hoc or part-time irregular basis. It is these last two that I am particularly going to speak about today.

The bill through its improvements to the work bonus expands on a great deal of work we have already done when it comes to pensions. We delivered the Secure and Sustainable Pension Reform package back in September 2009 that already built on a $500 bonus which was paid to pensioners in 2008. But the provisions introduced through that Secure and Sustainable Pension Reform package were the most significant reforms to the pension system in 100 years and they were reforms that were well and truly overdue.

We introduced a one-off increase in the base rate of the pension, a new pension supplement, a pension work bonus and a new indexation system. From 20 September we delivered one-off increases of $32.49 per week for singles who receive the maximum rate of the pension, and $10.14 a week combined for couples on the maximum rate. These increases were made up of a rise in the base rate for single pensioners and a new increased pension supplement for all pensioners.

We also changed indexation arrangements to make them fairer and to respond to pressures on the cost of living, indexing them twice yearly. In fact, from 20 March this year pensioners receive an extra $13.20 per fortnight for singles on the maximum rate, and $19.80 a fortnight for couples on the maximum rate, and increases every six months tend to reflect similar kinds of amounts. This is a significant improvement from the way the pensions were indexed before 2009.

We also increased the utilities allowance from $125 to $500 a year, and that utilities allowance was first paid in March 2008. For the first time the utilities’ allowance was also extended to all recipients of the carer payment, disability support pension, widow B pension, income support supplement, partner service pension, wife pension, and bereavement allowance. The Commonwealth seniors health card holders and certain veterans’ affairs gold card holders also received an increase in seniors concession allowance of $500 a year, which was paid quarterly in line with the utilities allowance. We also increased the telephone allowance to $132 a year for those who have the internet at home. This is available for eligible veterans, income support recipients of age pension and a number of others who have home internet connection—all very important contributions to the quality of life of seniors in my electorate and around the country.

We also provided extra assistance for dental and aged-care costs and worked with state and territory governments to introduce national reciprocal transport concessions for older Australians with a seniors card when they travelled interstate. All these reforms have meant that since September 2009 pensioners on the maximum rate have had their pensions increased by around $115 a fortnight for singles and $97 a fortnight for couples combined. These are changes to the circumstances of pensioners that I am very proud of.

This bill builds on that work by improving the existing work bonus. We have already introduced a work bonus which provides that the first $250 of $500 that a pensioner earns each fortnight would be exempt from tax. But the reality for many pensioners is that they do not work regular weekly jobs; they actually work for a number of weeks of the year. For example, some of them may work in schools, so they may work 40 weeks of the year and they do not get paid for the remaining 12. Others may come back at tax time—they may be a retired accountant who works for a few weeks or a few months around tax time. For them, because their income is averaged over the year, the amount that they earn perhaps impacts on their pension more than it should. This change to the work bonus recognises that. It allows a pensioner to earn $250 a fortnight without it being assessed as income under the income test, and pensioners are able to build up any unused amount of their $250 bonus every fortnight to a maximum of $6,500 a year. Pensioners will effectively be able to annualise their income and carry forward an income bank of up to $6,500 across years.

In Parramatta we have a significant number of pensioners, currently about 21½ thousand of them, with all sorts of work arrangements. It is a very large number of pensioners for one electorate. You can compare that to Warringah or Wentworth, which have about 11,000. I am very pleased to see this legislation introduced to parliament today because it will dramatically impact on many of their lives.

The second thing I want to talk about was, again, a great announcement made during the election campaign, and it is great to see it delivered through legislation today. There was a promise to reform the family payment system to encourage more teenagers to stay at school and to help families meet the higher costs of older children. It is very important that students finish their education because it gives them the best possible chance to fully participate in life, to get a job and the skills they need to flourish in society. The ‘How young people are faring’ report of 2008 found that young people who leave school early without adequate qualifications struggle in the move from school to work. They are at high risk of becoming disadvantaged and they are at high risk of spending long periods of time out of work, especially in times of economic slowdown. We also know that children from low-income families have lower levels of school completion.

We want to stop the cycle of disadvantage and target support for children from low-socioeconomic backgrounds so that they can gain a foothold in society and have what so many of us take for granted. A strong educational system will compensate for an unequal start. As the Prime Minister stated when first making these election promises:

I don’t want to live in a nation where we stand by and kids can get lost. They can get lost out of their school journey: they can fall out of school, fall out of work, end up in aimlessness, drifting through their latter teenage years, meaning that for the rest of their lives, they will probably struggle to get a job and hold down a career.

What we want to do is to make sure we are investing in kids so they can stay in school.

As early as 1999, researchers such as R Cowie were finding that deliberately targeted federal government policy such as the Hawke government’s Participation and Equity Program, a successor to the Disadvantaged Schools Program, could significantly reduce the numbers of young people leaving full-time education. This government is doing all we can to undo the effects of the inertia around educational opportunity that characterised the Howard years.

One of the great failures of the Howard government was its inability to accept the recognised link between investment in education and innovation on one hand and economic growth on the other. Under the Howard government, Australia was the third lowest investor in primary and secondary schooling in the OECD and spent twice as much as other OECD countries on private education. His government cut programs like the Disadvantaged Schools Program, which was started under the Whitlam government, and we are facing the consequences of his lack of vision.

For the last decade of the Howard government retention rates to year 12 in Australia did not improve in any meaningful way. They increased from 40 per cent to 72 per cent under the previous Hawke and Keating governments and essentially stagnated between 72 per cent and 74 per cent for the next 12 years. Those retention rates are low by OECD standards. I point out that 12 years is the length of time it takes a child to go through school from start to finish, so it is clearly more than enough time to impact on the number of children that stay at school. This government is committed to improving year 12 or equivalent vocational completion rates and to reach our target of a 90 per cent year 12 attainment rate by 2015. We have already seen retention rates increase to around 78 per cent in 2010.

This bill is a great example of how tackling this issue in a holistic way through a number of initiatives across portfolio areas contributes to strong outcomes. We are spending $723 million over four years on our National Partnership on Youth Attainment and Transitions program to improve retention rates. This includes $100 million for the states and territories in reward payments for increasing school participation. We are investing heavily in early childhood education because the research shows that this is crucial to retaining students long term. The National Partnership on Low Socio-Economic Status School Communities which will address the complex challenges facing students in disadvantaged communities will also ensure that children from those areas do not fall through the gaps.

This bill goes further, by helping families whose children are between 16 and 19 to keep those children in school. Under the existing system, the maximum tax benefit part A drops from $214 per fortnight to $53 a fortnight when a child turns 16. This is a significant drop in income and encourages teenagers to leave school early if their family is unable to support them in full-time study or training. We all know that the costs of children do not go down as kids grow up. This bill raises the minimum rate for family tax benefit part A. Payment rates for eligible children aged 16 to 19 who are in full-time secondary or vocational educational will be the same as for 13- to 15-year-olds.

As promised, the maximum rate of family tax benefit part A will be increased by around $160 per fortnight, a significant increase for families in the low- to middle-income bracket. Over the next five years, the families of around 590,000 teenagers will benefit from up to $4,000 per year in additional financial assistance. These amendments will also mean that older children will now be eligible to be considered a rent assistance child. Rent assistance was previously only claimable for 13- to 15-year-olds. We are also simplifying the system by helping families with kids under the age of 18, making FTBA the main payment for at-home children in high school or a vocational education equivalent.

This bill targets issues that are very real for many families in Parramatta. Around 23.3 per cent of Parramatteans have a schooling level lower than year 11, and in Merrylands this rises to 32.5 per cent. We have an incredible amount of work to do with our younger generation in areas such as this to improve those statistics. There are more than 16,000 families in Parramatta receiving family tax benefit part A, and many of these families potentially stand to benefit from the bill before us.

On average, nearly 20 per cent of Parramatteans are classified as low-income households. In Dundas Valley this rises to 23.9 per cent and in Telopea to 27.5 per cent. These households receive less than $500 per week before tax, so the kinds of increases that we are talking about in family tax benefit part A are substantial for many, many families in the Parramatta region. These are sobering statistics, and ones that we are determined to do something about. In summary, I commend the bill before the House. As the Prime Minister has stated, no child’s fate should be predetermined before they reach adulthood.

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