Lucy Wicks (Robertson, Liberal Party) Share this | Hansard source

I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. I am pleased to be supporting the Turnbull government's legislation today, which is part of the family payments reform package and backs up our Jobs for Families initiative, which has been so well received in my electorate on the Central Coast. It is a strong demonstration of the government's commitment to families, providing additional help to families where they need it the most—with day-to-day expenses.

Many of the measures in this revised package of bills bring forward items related to the family tax benefit, which is the family assistance payment that helps with the many and varied costs associated with raising dependent children. Specifically, this bill will see fortnightly rates for family tax benefit part A, which is paid to the parent or guardian, increase by about $10 for each child in the family aged up to 19. I am advised that this amount adds up to an extra $6,000 over the lifetime of a child in eligible families. Around 1.2 million families, including those on income support, will receive these fortnightly increases, which will assist them with the day-to-day living expenses all families incur. There will also be around $10 more per fortnight for youth allowance recipients under the age of 18 who are living at home. This is part of the fairness of these measures, and helps to simplify the processes, for families to be able to understand more easily.

The bill will also amend the rules and introduce a new rate structure for family tax benefit part B, which is paid to sole parents or couples who have one main income, and where one parent stays at home or balances paid work with caring for children. Under this legislation, family tax benefit part B payment structures will also be reformed to provide more support to families when their children are born, and encourage more workforce participation when their youngest child is older, thereby enhancing their ability to work. From 1 July, the standard rate of the family tax benefit part B will be increased by $1,000 per year for families with a youngest child aged under one, which is forecast to help around 142,000 families, including families in my electorate. I am advised that the current standard rates will be maintained for families with a youngest child aged between one and 13. Standard rates will also be maintained for single parents who are at least 60 years of age, and grandparent and great-grandparent carers with a youngest child aged between 13 and 18. A reduced standard rate of $1,000 will apply to single parent families, in situations where the parent is under 60 and the youngest child is aged between 13 and 16.

One of the great strengths of this country's social services program is how it provides such a diverse range of programs and payments to support parents, the primary caregivers to children and their families. But, unlike those on the other side of this chamber, we need to acknowledge that we have to secure the long-term sustainability of this family payments system. The government spends a significant amount of money in three main areas of family support each year. Figures I have received from the department suggest that the investment is around $20 billion spent in family tax benefit, around $6 billion in child care benefit and child care rebate, and around $2 billion in paid parental leave. So, even from this snapshot, it is obvious that the government's commitment to supporting parents in caring for their children must be balanced with the responsibility to make sure that family assistance and social security payments are well targeted and sustainable into the future.

One way this legislation acts on this need is to phase out family tax benefit end of year supplements, which are gradually being reduced over the next two financial years before being abolished in 2018-19. The supplements were introduced to mitigate the risk of debt after reconciliation, but the introduction of single touch payroll means that by the time this supplement is abolished most employers will be participating and the need for this payment will be reduced. This measure will save more than $4 billion over the forward estimates, and it is clearly a sensible reform. The supplements were introduced under the Howard government when there was an anticipated surplus of $13.6 billion in 2004-05.

We have heard in this debate many complaints from Labor about these changes, but Labor had a chance to do something about this during its chaotic six years in government—including six long years on the Central Coast, where its local Labor representatives failed to deliver for our region and its future. The reality is our social services bill represents about a third of the Commonwealth budget and it is growing faster than any other area of government. The minister has advised that this year we will spend around $20 billion on family tax benefit parts A and B, which represents the second biggest item of expenditure in the social services portfolio and the fourth largest in the entire budget. Without further restraint, our welfare bill is expected to grow from $149 billion in 2014-15 to $277 billion in 2025-26. As the House can see, in this legislation this government has a plan that is fiscally responsible and is targeted at families who need it the most. The changes are also consistent with the critical reform recommendations of the McClure review, which urged the government to make it easier to navigate the system to get the right assistance; for example, a system that has 20 main payment types with in excess of 50 supplement categories is just about unworkable.

But Labor has no such plan and never had. In fact, I have been advised that Labor's record in this policy area is a far cry from what it has claimed during this debate. In 2008, Labor means tested family tax benefits part B and introduced a means test on the baby bonus. In 2009, Labor froze indexation for the full payment of family tax benefits part A and B, the baby bonus and the dependant spouse rebate, and announced an income test for the Commonwealth seniors health card. In 2010 Labor capped the childcare rebate and paused the indexation of the childcare rebate for four years. In 2011 Labor froze indexation for family tax benefits A and B supplement payments. In 2012 Labor cut the baby bonus. Then, of course, Labor introduced the carbon tax, which did nothing but drive up the cost of electricity bills for residents and businesses in my electorate. I would also emphasise the point that, while Labor are busily opposing our legislation, they are not proposing how they are going to fund the ever-increasing social services budget. What is more, Labor refuse to acknowledge that the size of their budget black hole is $48.4 billion. And not only that; they continue to block the government's budget repair measures, which will only drive the deficit higher. In contrast, this bill is a great example of how we are responsibly getting the budget back into shape.

This package is designed to support the government's $3.5 billion Jobs for Families childcare package, which will provide greater choice for more than 1.2 million families by delivering a simpler, more affordable, more flexible and more accessible childcare system. This is critical for my electorate. The Central Coast is a region where this need is particularly pressing because of the large number of commuters—around 30,000 to 40,000—which impacts around one in three families in my electorate of Robertson. Many parents have to leave early in the morning for work and return home late at night to their families because their job opportunities in Sydney or Newcastle take them elsewhere. In the case of my husband, this is a 4½ hour round trip every single day—representing the experience of tens of thousands of 'coasties' every day. As a mother of two young children growing up on the Central Coast, this need for flexibility is therefore essential, and it resonates very strongly with other mums and dads that I talk and meet at the school gate or, last year, when I met them at my local preschool day care centre. They often contact me, asking what the government is doing for families. This Turnbull government wants to encourage these families with more opportunity, because workforce participation is fundamental for creating prosperity into the future. In fact, the minister cited a figure in his earlier speech that 165,000 Australians described child care to be of critical importance for them to be able to return to work, increase their work hours and grow their household wealth.

So, part of our Jobs for Families childcare package is to establish a new and simpler childcare subsidy from 1 July 2017. Families using child care in 2017, with family incomes of between $65,000 and $170,000,will be around $30 a week better off. Those on higher incomes will, on average, continue to receive the same level of support. We want our local families to be able to choose to work. We do not want that choice denied because of complex, inflexible and unaffordable childcare arrangements. Contrast this with Labor, who, when in government, allowed childcare costs to balloon by around 50 per cent.

In summary, without any change, the cost of our social security system will continue to rise while the number of working-age taxpayers will continue to decline. That, coupled with the debt and deficits which were left by the previous government, means we have to take the necessary steps to address this issue. I commend the bill to the House.

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