Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak on the Social Services Legislation Amendment (Child Support Measures) Bill 2023. The modern child support scheme is a proud Labor legacy, first introduced by the Hawke government way back when Brisbane was hosting Expo 88. Thirty-five years later, the Albanese government is happy to continue to support this legacy of reform.

We know it's always tough on children when their parents separate. My father left home when my mother was pregnant with her 10th child, so they were very tough times for my family. Good, responsible governments know how important a robust child support system is. Such social support ensures adequate and fair financial support for all the children of separated parents. To do so it's essential that Australia's child support system be effective in accurately assessing and then collecting child support.

So many single parents rely on child support for economic security and stability; for dignity; and for the roof over their head. We know that the median annual income for parents who receive child support is around $33,000. This is less than half of the annual average weekly total earnings of all employees. In 2021-22 the child support scheme contributed to the economic security of 1.1 million children. This entailed $3.71 billion in child support payments transferred between 1.3 million parents—those are big numbers. And, obviously, most parents do the right thing by their children, irrespective of the circumstances of their relationship breakdown.

I have to be clear here and say that most parents are doing the right thing. Good parents provide assistance on time, they help to cover the cost of things such as food, medicine, education, clothing et cetera—like 'normal' parents under the one roof. However, sadly, when parents don't pay their child support on time there are real and immediate impacts on single parents and the children they care for. Concerningly, there is about $1.69 billion in child support debt that has been accrued over the last 35 years. That's $1.69 billion that hasn't gone to the needs of children. It's parents neglecting their own flesh and blood—parents neglecting their own children, an absence of money and support that hurts and harms. Try to imagine how much $1.69 billion could have helped with expenses: with bills, with that new pair of school shoes, that trip to the movies or all those little pleasures that are so often denied a single parent.

The intent of this bill is to make it easier for Services Australia to collect child support debts, and I'm proud to be part of the government that is helping it to do so because I believe the needs of children should be paramount: it's a great investment. Moreover, our proposed changes will help prevent future debts being accrued by low-income parents. Nobody wins from those sorts of debt traps. The Albanese government will do this from 1 July via three changes that strengthen Services Australia's powers. The first applies to expanding employer withholding. This is where Services Australia can directly debit child support debts from a parent's wage. Unfortunately, this is the default and probably most well-known method for paying child support for those who can't sort it out themselves. At present, Services Australia can only initiate an employer withholding arrangement in active child support cases. For example: right now when a child turns 18 the active child support case ends and therefore Services Australia cannot initiate employer withholdings. This bill will mean that from 1 July this year Services Australia will be able to initiate employer withholdings where there is still an outstanding debt. A parenting debt should not be wiped just because the child has turned 18. As anyone with an 18-year-old knows—and I recently acquired one of them—parenting doesn't magically stop when they become old enough to vote. Therefore, incurred expenses regarding one's offspring when they were officially a child, under 18, still have to be paid. This change will end rogue parents deliberately delaying and not paying what they owe, knowing that when the child turns 18 the debt would disappear. Trickery and delay and bad parenting should not be financially rewarded. This change alone is expected to recover up to $164 million in unpaid child support from around 18,000 parents. This laggardly cohort has an average debt of nearly $11,000 owing to the receiving parent.

A second change will stop parents who owe child support and have been issued a departure prohibition order from being able to bypass their order by offering financial security. At present, Services Australia can issue a departure prohibition order—something to stop you at the gate, basically—to prevent a parent from travelling overseas if they have a child support debt. However, there are exemptions issued if the owing parent can provide a financial security such as a bond for their return to Australia by a specific date. Upon their return this is then returned to them. This bill will give Services Australia more powers to deny an exemption when there is a history of not paying child support debt. Sadly, many parents are using this as a loophole not to pay off their debt. They can find money for an overseas trip but can't seem to find money to pay for their children's school shoes. They can flee overseas but can't feed their own children. This is not acceptable. The number of people this affects will be low, somewhere between only 100 and 200, but this group generally are those with large debts. On average, this cohort has debts of $43,000. This is money that is meant to assist with the costs associated with raising their children—money that should be paid before they swan off on an overseas trip. That's sensible government.

Another change will see improvements made to income accuracy for low-income parents. This bill will improve income accuracy for low-income parents who are not required to lodge a tax return. Child support customers who earn less than the self-support amount, which is currently $27,507, are not required to lodge a tax return annually. At the moment, if low-income parents do not provide income information, Services Australia applies a default provisional income, which is two-thirds of the annual male total average weekly earnings, which is currently $55,016. However, this is double the self-support amount, so it can significantly actually overestimate a parent's income, an inaccurate estimate that can put low-income parents into financial hardship in two ways. It can result in a parent receiving less child support than they should or it can result in a parent being liable to pay more child support than they actually are capable of doing. The bill fixes this problem by deeming a parent's income to be equal to the self-support amount, and this will ensure that the child support assessment takes into account a more accurate estimate of the parent's income. As any MP would know, often why we have our constituents in front of us complaining is because of the inaccurate assessment. This change is expected to benefit up to 150,000 low-income child support parents each year, with receiving parents making up about 70 per cent of this group.

The changes contained in this bill will make a real difference to the lives of single parents and their children. It will remove some irritants from what can already be an incredibly traumatic or fraught situation. However, the Albanese government also knows that there is more work to do to improve the child support scheme to ensure that it is fit for purpose. This bill is the first step in making the scheme better for parents and children. In the government's response to the Joint Select Committee on Australia's Family Law System, tabled in January 2023, we've committed to implementing a range of recommendations to improve the scheme over the longer term so Australians can be assured that the best interests of children will always be paramount in any changes we make to this nation's child support scheme. I commend the legislation to the House.

See this speech in context