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

It is always a pleasure to follow the member for Canberra, who, despite being on the other side of the chamber, is a good friend. Some of the comments made by the member for Canberra require a little illumination, because the interesting thing about this debate on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015 is that nowhere have those on the other side mentioned the purpose for which the supplement was introduced in the first place.

The supplement was originally introduced for the purpose of minimising the amount of debt people got into as a result of fluctuations in, or overestimations or underestimations of, their earnings during the course of the financial year. The supplement was utilised to ensure that they did not finish up with a debt at the end of the financial year if they did not properly calculate the income they were going to earn. So the supplement was there for a very specific purpose. It was not there to become part of or a fixture of the family tax benefit part A or part B system. The necessity for these changes has been well articulated by my colleagues on this side of the House in terms of their seeking to repair the damage to the budget and the finances of this country left by those opposite after their six years in government—the Rudd-Gillard-Rudd government.

This bill contains three measures that are, importantly, aimed at creating long-term sustainability for our family payment system while continuing to deliver help to families who need it most. It was mentioned by a colleague earlier that our family support system totals some $28 billion a year—$20 billion in family tax benefits, another $6 billion in child care and some $2 billion in paid parental leave. I think it is safe to say that we live in a country where we are lucky to be able to support those people in our community who need it most. I think it would be fair to say that our family support system of family tax benefits, childcare benefits and paid parental leave is one of the most generous and broad ranging in the world. I recognise that there are many families in my electorate who rely on family tax benefit payments to assist with the day-to-day costs of raising their children. We as a government well recognise the importance of families being able to raise happy, healthy children, because they are the next generation of this country. As the next generation that is going to take this country forward, one of the things I do not want to see happen is it being left with an enormous burden of debt. That is part of the reason for trying to get the budget back into order now. It is so that we can continue that process of budget repair and not leave future generations a legacy of debt and deficit. Not only that; the savings generated through this bill are not being squandered, as they probably would have been by those opposite, but rather they are going into another package of measures to support families.

Just to cover off on some of the changes in the package: the first measure is to increase the family tax benefit part A fortnightly rate by around $10 for each family tax benefit child in the family aged up to 19 years of age. The second measure amends the rules and introduces a new rate restructure for the family tax benefit part B. The third measure will phase out the family tax benefit part A and part B supplements. This family payment reform package will, as I have said previously, greatly assist in the important task of repairing the budget, and it will also help pay for the government's $3 billion Jobs for Families child care package. With the many things that the government are doing, you have to look at the totality of the packages that we are putting together to improve the budget and the services and support that we provide to families—it is not just one or the other.

This bill seeks to continue the budget repair process. The government has already passed a number of changes which limit family tax benefit part B for couples, other than grandparents, when the youngest child turns 13. I acknowledge that those opposite have contributed somewhat to the task of budget repair; but, as we all know, there is far more to be done in terms of the savings that we have legislated through this House and that have been held up in the Senate

If they saw fit to pass those bills, it would continue to make the process of budget repair so much quicker and more efficient for everyone concerned.

As I touched on, this bill proposes to increase the Family Tax Benefit Part A by around $10 a fortnight from 1 July 2018, as well as increase the fortnightly rates of Youth Allowance and the Disability Support Pension to align with the new Family Tax Benefit Part A fortnightly rates. Around 1.2 million families across Australia, including those on income support, will receive the fortnightly increase to assist them with day-to-day living expenses. Under the second measure of this bill, the Family Tax Benefit Part B payment structures will be reformed to provide more support to families when their children are born and better encourage workforce participation when the youngest child is older and their ability to participate in the workforce is enhanced. From 1 July 2016 the standard rate for Family Tax Benefit Part B will be increased by $1000 a year for families with a youngest child under one, helping some 142,000 families. The current standard rates will be maintained for families with the youngest child aged between one and 13. The standard rates will also be maintained for single parents who are at least 60 years of age and grandparents and grandparent carers with the youngest child aged between 13 and 18. A reduced standard rate of $1000 will apply to single parent families where the parent is under 60 and the youngest child is aged between 13 and 16 to encourage better workforce participation.

The government acknowledges the important role of parents as the primary carers of their children, and, as I have touched on earlier, it maintains a range of programs and payments to support them—all up, at a cost of some $28 billion per annum. We continue to focus on ensuring that we provide these support systems to families in our community, as it is incredibly important that they have that there.

The third measure the bill proposes is to phase out the Family Tax Benefit Part A and Part B end-of-year supplements. These supplements will be reduced in 2016-17 and again in 2017-18 before being abolished in 2018-19. For the benefit of those opposite, the supplements were introduced to mitigate the risk of debt after reconciliation of people's financial affairs at the end of each financial year, but with the introduction of the single tax payroll in 2019-20 most employers will be participating and the need for the end-of-year family tax benefit reconciliation will be greatly reduced. The single tax payroll will be rolled out through 2017-18 and 2018-19, and this will result in the reporting of families' real-time income. We believe this will minimise the risk of underreporting income and subsequent debts. Therefore, we see the supplements, which were there to mitigate the risk of debt, as no longer required.

The government believes these are sensible changes aimed at ensuring sustainability of the family payment system and continued support to families who need it most now and into the future. It is by continuing to focus on ensuring that we maintain a sensible, long-term system not just for those who are receiving benefits today or tomorrow but for those who will or may require those benefits in the years to come. In addition, these savings are being reinvested in a childcare package to support families and encourage work force participation. I commend this build the House.

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