Sharman Stone (Murray, 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. This bill introduces reforms to the family tax benefit part A and the family tax benefit part B. It also looks at the at-home under-18-year-old fortnightly rate. Under the current rules, there are different rates for family tax benefit eligible children. From 1 July 2016 this bill will make changes to the rate structure and rules for family tax benefit part B and reduce some of the confusion regarding rates for various ages.

From 1 July 2018 youth allowance and disability support pension recipients aged under 18 and living at home will receive the same fortnightly rate as family tax benefit part A paid for eligible children aged up to the age of 19 years. This will mean that from 1 July 2018 the maximum basic rate of youth allowance will be paid for a person who is: not independent, lives home and is not yet 18; an accommodated independent person not yet 18 years of age; independent and in supported state care and is not yet 18 years of age. The aim is to ensure that there is no financial incentive for a child to leave full-time secondary study to claim youth allowance. That would be a very sorry outcome. Too often in the past it has led to long-term unemployment and intergenerational poverty when a child under financial stress, perhaps under pressure from some of their relations, understands that if they leave school they will have some welfare support. In general this bill makes changes that increase some rates of payment and maintain others.

We have just seen the results of the 2015 Progress in Australian Regions report. This is an ABS-ABARES document. It indicates why it is important for Australia to have a strong safety net for those who, for whatever reason, need additional support to live decently in Australia. The outcomes of this report for the electorate of Murray show that we have many low-income and unemployment challenges to overcome to improve the incomes and independence of people living in northern Victoria.

In the 2015 report, Shepparton had the lowest median weekly household income increases for the whole of Australia between 2001 and 2011. Incomes only increased by $11 over that 10-year period. The average increase across Australia for the same period was $190. You might wonder why we have such low income or low median weekly household income increases in what has often been called the food bowl of Australia. We are a rural electorate dependent on our hard-working farmers, whether they are in dairy, beef, fruit growing or cropping, or have piggeries. We are an area which has long been dependent on water security provided through the Murray-Darling system and, in particular, the Goulburn Murray Irrigation District. Communities, however, had to survive the millennium drought—a 10-year drought at the turn of the century when, for the first time in history, the irrigation system failed. This left many farmers with high levels of debt—many, in fact, doubled their debt. This caused enormous stress to families as well as to small and larger communities.

There are over 60 towns with less than 5,000 people in my electorate of Murray. Some of my towns only have 100 to 400 people in them. The town where I was born, Pyramid Hill, had only 400 people when I was born, and it continues to have a population of 400 people. The majority of our farm families—as well as many of our small businesses—were only able to put food on the table and pay their household bills through having the drought Exceptional Circumstances Relief Payment coming in to their households. This was the equivalent of Newstart allowance. That Exceptional Circumstances drought support has been replaced by a different welfare support payment, the Farm Family Support benefit. But it was, in the case of my electorate, an essential safety net which meant we were able to have farm families stay—many of them recovered—because they at least had enough income on a weekly basis to pay for the basics of keeping their families together.

In 2008, when the Labor government was in power, the Minister for Climate Change and Water at the time, Penny Wong, was in the early stages of gathering together water out of the Murray-Darling Basin production systems, to be moved into the Commonwealth Environmental Water Holder's bucket. Unfortunately, she offered what turned out to be over $2,500 a megalitre to farmers if they sold their water to the Commonwealth. The sellers, of course, were not willing; too often the pressure was coming from their financial advisers and from the banks, to whom they owed double the debt they owed in the time before the drought. They were told that if they did not retire their debt their properties would be sold—their land as well as the water. They were also informed that the temporary water market, which at that time was selling a megalitre of water for some $30 to $40, would be a more-than-adequate alternative to owning a permanent water entitlement holding into the future. Tragically, there has now been a huge increase in the price of temporary water. It is today, as we speak, up around $300 a megalitre, putting it beyond the reach of dairy farmers, fruit growers and certainly rice growers. Only a very small proportion of primary producers can pay that price, but it makes it a wonderful playground for speculators, who joyously talk about the 20 to 30 per cent profits that they make in trading their water. Those traders include Melbourne Water, who has 75 gigalitres of the Goulburn Murray Irrigation District entitlement, which it can no longer obtain via a closed down pipeline. They speculate with that water each year, at the same time making cash for the state of Victoria but putting the price of that water above farmers' capacity to pay to grow food and fibre.

This is a very difficult circumstance leading to many more families in my area—once dependent upon Exceptional Circumstances relief through the drought—to now reach for farm household support. I have some 70 farmers who are able to access food parcels supplied by the Victorian Foodbank weekly. Think of the irony of that situation: these are food producers depending on the Foodbank of Victoria in order to put food on their own tables. This is a very tragic circumstance.

I was particularly concerned when consultant Mr Rob Rendell—unfortunately, the architect of the now discredited and failed Goulburn-Murray Water Connections Project Stage 2—gave evidence at the Senate inquiry into the Murray-Darling Basin Plan just last Friday. He said quite happily that:

… dairy farmers actually can turn it off—

That is, their water—

as they did in the drought for an odd year but it costs.

In fact, dairy farmers cannot turn their water off, even for one year, because they have to keep their herds supplied with stock water, their dairies have to be washed, and they have to grow pastures or they have to have sufficient means to buy in feed. To be viable, dairy farmers mostly rely on the capacity to grow their own fodder. We have a serious need in our area to have well-thought-through welfare support arrangements when through no fault of their own my agricultural producers find themselves in a condition or a state where—while doing their hardest work and having the strongest of intentions, great expertise and generations of knowledge—they still cannot make a living. That is because of failed policy, in this case the Murray Darling Basin Plan, and because of the Victorian government when it chose to pipe water across the divide to Melbourne in the middle of the worst drought on record. At the end of the day, that is a legacy of taking 225 gigalitres out of the system, and that was achieved by shutting down half of the irrigation infrastructure. That is why we have a very strong welfare connection now when it comes to keeping a lot of my farm families alive. It is a very sad state.

The regional report data I referred to a few moments ago, which looked at data for Shepparton and the north-west region, reflected on the critical state of the communities that have now lost so many of their rural enterprises or have again been forced into spiralling debt because state and federal government policies have forcibly removed their access to the irrigation supply systems that once conveyed their water. We have very high youth unemployment—around 26 to 27 per cent. The regional report stated that there has been a decline in young people aged from 15 to 24 who are earning or learning; however, some 70 per cent of young people in my electorate of Murray are earning or learning.

We have also seen our skill levels increasing with people attaining certificate III or above or being employed in skilled occupations. This rose to 52 per cent, but the national average for people in such categories is 59.8 per cent—nearly 60 per cent. At the same time, vocational or higher education qualifications for people in my area increased to 53.5 per cent, but the national average is 63.9 per cent. So you can see that in my region there has been a most significant slowing of the capacity of people to gain skill levels—at least a certificate III or above—or to have vocational or higher educational qualifications. We are at least 10 percentage points below the national average.

Ever since the drought, we have had a decline in the number of young people taking up higher educational opportunities away from home to go to university. They are often forced to consider only the local TAFE or the local campus at La Trobe University. Unfortunately, these campuses do not offer the range of courses that you would expect in a metropolitan area. Too often courses, particularly those offered by universities, are only offered online. This situation has arisen because the cost of a student living away from home is some $20,000. If a family has more than one student who needs to live away from home to be educated, you can imagine that in the circumstances which I have just described it would be an impossible ask for these farm and small business families. So we are losing the next generation of educated, upskilled individuals, who are the backbone of any community and, in particular, of a small rural community. We should not have young people being disadvantaged because of their geographic location in our great country, but that is becoming even more the case than it was generations ago.

The loss of water from my area through deliberate government policy both state and federal—federally, of course, under Labor policy instigation—has resulted in losses of agricultural enterprise. If we consider the dairy industry, dairy enterprises have been reduced by some 50 per cent since the middle of the worst drought on record. The multiplier effect of this enterprise loss means, as I mentioned before, some 27 per cent youth unemployment. The report showed that there has been a two per cent decrease in participation rates in the workforce in this region, down to 57.5 per cent. This is way below the average across Australia, which in terms of the decrease in participation rates is 61.4 per cent. I have to say that this circumstance in my electorate makes me look very carefully at any welfare legislation—in this case, the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. I want to make sure that our welfare, our safety net programs, in Australia offer genuine support, without perverse incentives, and also that it is very much geared to the circumstances in different parts of the country.

I am most concerned that our welfare takes on board that a lot of the children in my electorate are being raised by grandparents, usually the grandmother, and that when it comes to my youth, my young people, the 27 per cent unemployed, it often means that the girls have teenage pregnancies. They become single mothers. They live a life of poverty, rarely able to be skilled beyond their early school leaving age and often unemployed for all of their adult life. I commend this bill to the House. I see it as a most important piece of the legislation.

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