Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

I rise with pleasure to speak in support of the Social Services Legislation (Family Measures) Bill 2015. This bill seeks to amend the New Tax System (Family Assistance) Act 1999. There are a number of measures in this bill, but I think it is first worthwhile to reflect on the quality, the breadth, of our social security system, which is regarded as one of the best social support systems in the world. This bill seeks to make a number of changes to the act. It seeks to reduce to six weeks the period during which family tax benefit part A and additional payments that rely on family tax benefit eligibility will be paid to recipients who are outside Australia from 1 January, 2016. This bill will also cease the Large Family Supplement from 1 January, 2016.

The government acknowledges the important role of parents in the primary care of their children and maintains a wide range of programs and payments to support them. Currently, the government spends a substantial amount of money in three main areas of family support each year, including around $20 billion in family tax benefits, around $6 billion in childcare benefit and around $2 billion in paid parental leave. As I said earlier, the depth and breadth of our social security system provides enormous support to people in our community who require it. I think all of us in this House recognise the importance of maintaining the integrity and longevity of that system.

This government is committed to supporting parents in caring for their children. However, it must be balanced to ensure family assistance and social security payments are well targeted and sustainable into the future. In my electorate of Forde, there are thousands of hard-working families who rely on government programs and payments to support them as they raise their children. I want to assure families that I will work with the government to ensure we provide a sustainable family tax benefit system that will continue to support them well into the future.

The Social Services Legislation Amendment (Family Measures) Bill 2015 contains two measures that are designed to assist with the necessary task of budget repair to get us back on a steady path to surplus as well as ensure government support for families can be maintained for the long term. As part of these measures, the government will reduce from 56 to six the number of weeks FTB part A can generally be paid when a family is overseas. This measure is expected to save Australian taxpayers more than $40 million over the forward estimates. More importantly, it ensures that our family tax benefit payment system meets its objective of helping families to raise their children in Australia.

Currently, family tax benefit part A recipients who are overseas can receive their usual rate of payment for six weeks and then the base rate for a further 50 weeks. Strengthening the family tax benefit residence requirements will better ensure family assistance payments are targeted to those families who have a strong residence connection to Australia. Importantly, this change will not affect members of the Australian Defence Force or the Australian Federal Police who are deployed overseas; individuals assisted by the Medical Treatment Overseas Program; and those unable to return to Australia for a specified reason such as a serious accident or natural disaster.

Family tax benefit recipients who stay overseas for more than six weeks will have their payment stopped. If an individual stops being eligible for family tax benefit under the amended portability rules and returns to Australia within 13 weeks of the end of their portability period, FTB will be restarted where appropriate without a new claim. This measure will align the portability rules for family tax benefit part A with those of family tax benefit part B and most other income support payments.

The second measure in this bill will cease payment of the large family supplement from 1 July 2016. The supplement is a component of the family tax benefit part A and is currently paid at the rate of $342.85 per year for the fourth and each subsequent child in the family. Modelling by NATSEM in 2002, 2007 and 2013 consistently found that each additional child in a family costs less than the first child. In 2010 the Henry tax review recommended that the large family supplement be abolished, as the policy rationale behind the payment was not strong. The National Commission of Audit reiterated this position in 2014 by stating that the basic rates of family tax benefit part A were sufficient for the cost of raising children. More recent research has found that on average a second child costs families 83 per cent of the cost of the first child, while a third child costs families 69 per cent of the cost of the first child. The reason for this being that families experience economies of scale in which fixed costs are spread among more children. This research highlights the appropriateness of the modest change to the family tax benefit part A payment structure, which was recommended by the Henry tax review and the National Commission of Audit.

Cessation of the large family supplement in 2015-16 will affect approximately 383,000 families. Nearly all families who lose eligibility to the large family supplement will continue to receive family tax benefit part A, which provides assistance to families in meeting the day-to-day costs of raising their children. Cessation of the large family supplement is expected to save Australian taxpayers more than $175 million over the forward estimates. The measures in this bill will provide ongoing savings to the budget. It is imperative that these measures are undertaken as we continue to focus on the process of repairing the budget after six years of profligate spending by those opposite.

Importantly, this is about ensuring that we have a social security system that is sustainable in the long-term to supports our families and those in need—those who need that assistance, not just the current generation or those currently receiving those payments but those who in the future require this support and assistance. It is so we on this side of the House—or those opposite, if they are ever in government again in the next little while—have the financial capacity to support those in our community who need that support and to achieve the outcomes that our social security system was ultimately set up for—to support those most in need. I commend this bill to the House.

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