Jill Hall (Shortland, Australian Labor Party) Share this | Hansard source

I rise to support the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011 legislation that we have before us in the parliament today and to oppose the amendment. This piece of legislation is good news for Australian families. It is good news for Australian seniors and it is good news for those people who are having children. This legislation gives effect to three election commitments and two non-budget measures. I will come back to discuss these in detail.

The first election commitment in the bill is the expansion of the existing seniors work bonus measure to allow working pensioners to keep more of their pension when they undertake paid work. The second election commitment provides for better access to family payments for families with teenagers aged 16 to 19 in full-time secondary school or vocational education equivalent. The third election commitment provides improvements to the provision of the baby bonus for eligible families. The fourth measure ensures the annuities paid to people affected by thalidomide are not treated as assessable income for income support tests or for income tax purposes. Lastly, the bill makes minor administrative amendments to the income management measures.

I will start with one of the last measures—that which deals with thalidomide. I think this is an important measure. Those of us who are familiar with thalidomide know that it was a morning sickness drug that was given to mothers back in the sixties and seventies. It led to birth defects. A trust has been set up and payments have been made. This legislation exempts those payments from income tests. That is really in the spirit of what was intended. These annuities will be excluded from social security and veterans affairs income tests and from income tax. These annuities are not compensation payments, so they can be treated in that way, whereas a compensation payment does have an impact on income tax and on social security and income tested benefits. These are annuities and not compensation payments and this measure ensures that those payments are treated as was intended.

The other issue that I would like to touch on quickly is the matched savings scheme payment. That is designed to assist those who are on compulsory income management. Currently the qualifying savings period starts when the person commences a course. This will be changed so that the person can begin saving as soon as they register for a course rather than having to wait. That is a very positive change, which will help people to save a lot quicker.

I would like to turn to the three parts of this legislation that were election commitments. The first of those relates to the baby bonus. This legislation allows for the first payment of the baby bonus to be $500 and the remaining 11 payments be reduced slightly. The impact of this is to allow a larger upfront payment at a time when families or mothers need that payment. Particularly if it is your first child you have to buy cots, bassinettes and prams. Even that $500 goes nowhere near the cost that will be incurred. For a subsequent child there are still costs associated with the birth. So this is a very sensible change. It is a change that recognises the fact that families—mothers—incur a greater cost at the time of the birth of their child. I feel that this is really good news for families. This is a change that will benefit all people who need to have that little bit extra up front at the time of the birth of their child.

The next measure in this piece of legislation provides better access to family payments for families with a teenager aged 16 to 19 in full-time secondary school or vocational education. Under the current scheme, payments for family tax benefit A are reduced when the young person reaches the age of 16. From 1 January 2012, when this legislation comes into force, family tax benefit A will increase by around $160 per fortnight for teenagers aged 16 to 19 who are undertaking study. Under the existing scheme, the benefits paid under the family tax benefit decrease from $214 to $53 per fortnight when the child turns 16. It is important for the House to note that the later years of study are the years that attract the greatest cost.

The Henry review argued:

Family payments should be the main form of assistance for children—

or young people—

aged up to 18 years, or until the completion of secondary school …

This change recognises that family tax benefit will be the main form of support for those young people. It continues:

Beyond these points, youth payments focused on encouraging study … should be available.

There should be a seamless transition from family assistance to income support for young people. This should be based on the person’s circumstances and only one payment should be available …

This legislation picks up on that recommendation in the Henry tax review. The Gillard government views education as vitally important and recognises that, if a young person completes their education, their work opportunities are much greater. This change will encourage young people to stay at school longer. It provides greater support to families and, in doing so, gives those young people better opportunities for the future. This is a very important change and one that I am sure all members of this House will embrace.

I would like to turn to the changes to the work bonus. The introduction of the work bonus by this government in 2009 was groundbreaking. Currently we are trying to encourage more people with skills to stay in the workforce. The work bonus was introduced as part of the government’s Secure and Sustainable Pension reform package and worked as an incentive for older Australians to stay in the workforce and thereby stay engaged, utilise their skills and continue to contribute to the welfare of our country—although I might add that people who choose not to work after the age of 65 still make enormous contributions. This is a way of utilising the skills of a very important group in our community. When the work bonus was introduced it was groundbreaking legislation, encouraging senior Australians to engage. This legislation expands the work bonus. The first $250 earned in a fortnight will not be treated as income for social security and veterans affairs purposes. Pensioners will be able to build up any unused amount of their $250 fortnightly bonus in an ‘income bank’, up to a maximum of $6,500. This ‘income bank’ can be used to exempt future earnings from the pension income test.

I—and, I am sure, a number of members of this parliament—have been approached by pensioners and seniors that work in blocks. Two particular groups in my electorate of Shortland come to mind. One is the group of people employed as Santa Clauses. Santa Clauses only work at one particular time of the year, and they earn a significant amount of money—although nowhere near $6,500. It is seasonal, intense employment, in which they earn more than the $250 a fortnight that they are exempt. This legislation will allow all those seniors that really enjoy working as Santa Clause at Christmastime to bank their work bonus. The other significant group—a very significant group—is seniors and pensioners who work supervising university exams. A number of pensioners who have come along to see me have said that the $250 exemption is great but it does not work as effectively for them as it could. The changes in this legislation allow them a maximum of $6,500, which well and truly covers the amount of money they earn. The changes will ensure that pensioners are able to keep more of their pension when they work.

At this time I would like to put on record that I think that one of the truly untapped resources of our society is senior Australians, those people that would still like to contribute through working. I feel that as a nation we need to embrace the fact that they have skills to offer and we need to be more mindful of the fact that mature workers in Australia should be embraced and welcomed into the workforce. This is one way of acknowledging that older Australians that are in receipt of a pension can make an enormous contribution. This is great legislation. It is really good news for all those Australians that are affected by it and I recommend it to the House.

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