David Hawker (Speaker) Share this | Link to this | Hansard source

The original question was that the bill be now read a second time. To this the honourable member for Sydney has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Parliamentary Secretary for Treasury) Share this | Link to this | Hansard source

In resuming my comments on the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006 that we have before us, I want to reiterate my concern that, despite the good measures that are in this bill and the support for families in fairly difficult circumstances that it provides, we just do not know what impact this bill and the changes to the Child Support Scheme are going to have on low-income families. We have heard, obviously, from some of the modelling that was done at the time of the Parkinson report, that they will have an adverse effect on low-income families. But it does appear that the government has not taken that into consideration in the development of this child support formula, nor has it taken that into consideration in any compensation measures in this particular bill. I am concerned that there appears to have been little thought given by the government to that.

Whilst I am concerned about the failure of the government to make any attempt to quantify the impact of the bill and make any provision to protect low-income families, I do note that work is under way to establish monitoring and evaluation systems once the new formula is introduced. An ongoing monitoring and evaluation is clearly critical to the successful implementation of the new scheme.

I support moves by Labor to establish a Senate inquiry in 2007 to properly examine the impact of the bill on existing child support recipients and, in particular, whether any of these families will be worse off or are worse off as a result of these changes. When we are making changes of such a significant nature, we know that there is evidence out there in the modelling that was done for the Parkinson review and there is an expectation that low-income families will be affected by this legislation, I think it is absolutely critical that we go back and look at it in 12 months time to see what those effects have been and whether any further changes need to be made or any compensation measures put in place.

Despite this, I am concerned about what is going to happen to those families who are going to be worse off with the changes to the child support formula over the past 12 months. I encourage the government to make sure that they actively look at this for low-income earners. It is a shame that the government did not take the time or the effort to fully model this bill before it was introduced into this place so that those negative impacts could be taken into account and minimised.

The other component of this legislation is the strengthening of the compliance regime for the Child Support Scheme. Introducing an independent review mechanism and enhancing the Child Support Agency’s compliance capabilities is long overdue. For too long the Child Support Agency has been a bundle of red tape that, despite sending copious letters, did little to actually enforce the payment schedules it created. The fact that only half of all parents meet their child support obligations in full and on time is a problem that has needed to be addressed for a long time. It is the children of separated families who ultimately have paid the price of the existing toothless Child Support Scheme. And, as the summary report and recommendations are titled, we should all, regardless of which side of the House we sit on, be working in the best interests of children.

The new arrangements will improve the consistency and transparency of child support decisions and will provide a review mechanism that is inexpensive, fair, informal and quick. As I have already said, the emotional and mental strains of separation are challenging enough without the additional expense, stress and fear that the current system thrusts upon ordinary Australians. The new arrangements will finally take into account that not all Australians have a law degree and are capable of arguing their case succinctly in an environment that is both intimidating and confusing.

I am supporting this bill today, subject to the concerns I have raised about its impact on low-income, sole parent families. The government must commit to monitoring its impact and assisting low-income families that are adversely affected. The child support formula should more closely reflect the actual costs of raising children. The legislation should assist in providing a more transparent and realistic assessment of child support payments.

In conclusion, I will go back to where I started: the core principle of this debate is that it is the responsibility of parents, whether living together or apart, to provide the best possible environment for their children to grow into healthy adults. The law cannot force parents to act responsibly but it can attempt to provide them with every opportunity to do so.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

I have listened very carefully to some of the debate about the Child Support Agency and, as an individual who has for the last three years undertaken considerable research into the issue of the Child Support Agency, I am absolutely disgusted that people come into this chamber with a sudden interest in it. I have raised specific issues over the years on this issue, and they have not expressed their concerns at all in the past.

Let me get back to the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006. I rise because the bill is introducing some changes to the child support legislation as a result of recommendations which flowed on from a number of reports on the Child Support Agency and, more importantly, from the ministerial task force on child support chaired by Professor Patrick Parkinson. I happen to have a personal view based on the 6,000 submissions I have in my case files from all over Australia that (a) we have not gone far enough in reforming the legislation and the way in which it operates, and (b) we have not done anywhere near enough to make child support legislation fair and equitable across the board for parents, particularly those who have had a marriage break-up.

The role of the Social Security Appeals Tribunal through this legislation is being expanded to include independent reviews of child support decisions, providing a review mechanism that is inexpensive, fair, informal and quick. This is a very positive move by the government in introducing this legislation, because there have been extreme anomalies in the system to the point where, in 99.9 per cent of cases, the payer—that is, the non-residential parent—has been subjected to costs because of the unfair system.

The relationship between the courts and the new Child Support Scheme are going to be simplified. Parents will have better access to court enforcement of child support debts, and courts will have increased power to seek information and evidence in those cases and to make interim arrangements for their child support cases generally. I think most decent and sensible thinking people will applaud that particular change because it has been long overdue.

In terms of the courts, this measure only goes part of the way. On the basis of the evidence I have at my disposal, the courts have taken absolutely no action at all against individuals who have gone into the Family Court on these issues, had orders placed against them and have not complied with those orders relating to the access of children. The courts have done absolutely nothing through the family law court to pursue those individuals breaking judicial instructions. This indicates to me that there is one set of rules for the male component of a marriage and another for the female component. In all cases, the people who have broken the court orders have been female custodial parents, and no action has been taken against them. I make that comment without any apology whatsoever because it is based on, as I said, the considerable evidence in the files I have at my disposal.

Whilst many of these changes are going to make the system somewhat fairer than it is today, unfortunately they will not come into effect in many instances until 2008, although the second stage of the reforms which I just alluded to start on 1 January 2007. In July 2008, stage 3 of the reforms comes into effect. They are centred on a new child support formula being provided based on recent Australian research on the cost of caring for children that take into account the incomes of both parents after equal self-support amounts are deducted, recognise care of the child for more than 14 per cent of the time and treat first and second families more equally. That is a very good initiative. One of the weaknesses of the draconian monolith which is the Child Support Agency, which I have called a national disgrace, is that it has created massive problems for second families in particular. I am very pleased to see that the government has introduced that change to the Child Support Agency legislation through this bill.

There are a number of anomalies that do not seem to resonate with members of this parliament or with the ministers who are responsible for this legislation. I am talking about the problems associated with an agreement between the parents of a child that is made outside of the Child Support Agency. An example of what I am talking about is the situation—and I have documented cases on this as well—where the Child Support Agency has threatened to remove single parent benefits from the person who has custody of the child if that custodial parent did not pursue child support payments, despite the fact that the custodial parent did not want to put any imposition on the father and in fact wanted to get on with her and the child’s life at arms length from the father. I think that is reprehensible. This issue concerns a set of double standards, and an example of this is a case centred on paternity issues. DNA samples may have been taken because of either a comment or a suspicion that a child or a number of children—and some cases have involved three out of four children—were not the children of the person who was the subject of child support payment orders.

In regard to those paternity issues, I refer to the lack of will of the Child Support Agency to chase the real father, recompense the person who was accused of being the father and was not the father or return the money through the system to the parent that that person paid. In some instances, people have paid money for up to eight years—and at the moment there is a classic case of that in a court case in Victoria.

I also note that, under stage 3 of the reforms, the family tax benefit part A maintenance income is going to be changed so that payments are reduced only for those children in the family for whom child support is paid. I think that is a reasonable move. There are also more flexible arrangements with better legal protection that are going to be made for parents who want to make agreements between themselves about the payment of child support and for how lump sum payments are treated—and, in relation to the example I just gave, I think that is a very good move in the right direction. But I will be monitoring that to see how effective it is, because we do one thing and practise another as far as the Child Support Agency itself is concerned.

The income definitions for certain tax free amounts, foreign income and fringe benefits that are used to calculate child support on the one hand and family tax benefit and childcare benefit on the other will be aligned in another change. I think that is a reasonable move by the government and the appropriate minister in the right direction. Resident parents will keep all of their family tax benefit where a non-resident parent is carer of their child for less than 35 per cent of the nights in a year. Non-resident parents who have care of their child for at least 14 per cent of the time will continue to be eligible for the rent assistance component of family tax benefits part A and will continue to be eligible for a healthcare card. I think that is another good move in the right direction. It is probably going to assist in ensuring a better balance between the responsibilities of both parents for the care and upkeep of their child.

The minimum child support payment of about $6.15 per week for non-resident parents who pay child support to two or more families will now have to be paid to each of those families rather than being divided between them. I think that is a very reasonable and sensible approach because it pulls into line those payers, in particular male payers, who make up about 92 per cent of the payers involved in the Child Support Agency, and requires them to meet some responsibility to children that they may have had in two or more families.

Parents who deliberately minimise their income to avoid paying child support will generally have a $20 per child per week minimum payment. Some people would say that that is not enough, but it is certainly more than it is now. I commend the Minister for Families, Community Services and IndigenousAffairs and the government for introducing that. The thing that I and most decent thinking Australians want to see is those people who deliberately ignore and try to avoid their responsibilities to their children being made to pay for their children.

Parents who are using income from second jobs and overtime to re-establish themselves during the first three years after separation may have that income excluded from child support calculations. My advice to the government on that is that the word ‘may’ should be removed and replaced with the word ‘should’, as an amendment to that particular proposal in this bill. The reality is that I have seen more and more people who are paying their child support going into abject poverty because, every time they try to get on with a second family or make a new life for themselves, their additional income is taken into account in the calculation of their child support payments—not even on the net value of the additional income but on its gross value. That in itself is a classic illustration of how this child support legislation, which was originally introduced in the 1980s, has allowed this monolithic bureaucratic empire to get out of control. It has been aided and abetted in that by the lack of interest of previous ministers of the Crown of both political persuasions.

I would like to speak a little bit more about certain parts of this bill. One of the things that I need to speak to, which is part of the proposals in this bill under stage 3 of the reforms, is the section where it says that a parent who has financial responsibility for a stepchild in a second family will now be able to apply to have the stepchild treated as a dependant under the formula used to calculate child support for the parent’s first family. There is a good reason for that change: to date, a stepchild or the children of a second marriage have been treated vastly differently, in terms of their rights as children, from the children of the first marriage. I hope that we do monitor that, and very closely, because it is something that has created an enormous number of problems within the community.

The next thing I want to talk about is, I know, an issue that many in the community have raised. I know the minister has had it raised with him. I have certainly raised it with him, I have certainly raised it with the government and I intend to talk about it here today because it gives me an opportunity to highlight how some legislation can create enormous problems for some sections of the community—and, in this case, no other section of the community is subjected to this particular draconian inconvenience. I am talking about what is commonly referred to as the capacity to earn process of the Child Support Agency which not even the Taxation Office is able to impose on Australians who are out there earning wages. Not even the Taxation Office can do it.

I can give you an example of the impact of the capacity to earn process, for those who do not know what it is. A member of the public who is employed in a job that pays $70,000 a year, has a marriage break-up and is then subjected, quite rightly, to child support payments for the children of that marriage based on his wage. He then finds that, due to various circumstances and perhaps some pressure from the former partner or wife, he cannot cope mentally with the pressure. For example, the former partner of the individual became so vindictive, putting complaints to the person’s employer, that he had all of his career path opportunities removed from him; he was getting nowhere. He could not cope with the pressure. He resigned from his job and took up another job, which paid in the vicinity of $57,000 a year, from memory, which was significantly less than the wage that he got in his previous occupation. And what happened? I will tell you what happened. The Child Support Agency assessed his child support payments on the basis of his previous wage, as his capacity to earn. His child support payments are still being assessed according to that previous wage level, despite the fact that he earns only $57,000 a year. He has gone into a new relationship. He cannot keep up with the payments. He falls behind in the payments and the interest rate increases because there is a penalty imposed on him through the system. He then gets to a stage where, as in many such instances, the debt is between $30,000 and $70,000. He will never be able to pay it back. In some instances—and there are cases of this in my own constituency—that person may take his own life to get away from the system.

The point I am making here is that capacity to earn is a supersensitive issue to the Child Support Agency and the system, but it creates enormous social, psychological and economic pressures for individuals and the community itself. More importantly, it can lead to heartbreak for the families of such an individual. But it does not stop there. If a person, for whatever reason—perhaps through pressure from the Child Support Agency—takes his life, and there is a debt, the Child Support Agency has the habit of then targeting the mother and father of that person because he may not have any money in his estate. That is the sort of nonsense going on in the Child Support Agency that is creating massive problems out there that we really do have to think very seriously about addressing in the not-too-distant future.

In closing on that point, the capacity to earn issue—because of the way it is applied and the anguish that it is causing through the mental, social and economic pressures it places unfairly on individuals—is, I believe, because it is the only government agency in the country that practises it, unconstitutional. I am getting some constitutional lawyers to give me some advice on that. I put the minister on notice that at some stage I am going to challenge it in the parliament unless the government thinks very seriously about looking at it and changing it in the interests of fairness for the whole of the community in every area of taxation.

Some of the recommendations of the Parkinson task force accepted by the government have already been adjusted and refined. I compliment the minister on that. I know it is a very difficult issue. I know I am a bit of a pain in the butt from time to time when I raise these issues with the minister and the government and talk about them publicly, but I happen to believe that it is time for changes and there are more to be made—(Time expired)

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Thanks to the member for Hume for his comments. He amongst many members of this place over the last 10 years, some who have departed, has an enormous commitment to trying to ensure that separated families are dealt with in a fairer, more equitable way which works for them and their children in these three-way relationships—and sometimes four-way and even five-way relationships. They are difficult. They are challenging. They raise issues which it takes a lot of courage to take on. I know of the member for Hume’s personal commitment to this, and I also pay tribute to the former member for Richmond, Larry Anthony, who was also very passionate about this and put an enormous amount of time and effort into it as well. And so have many people from both sides of the House. The current Opposition Whip has been a strong advocate for change.

If we look back to the late eighties, when the then Labor government introduced the current child support system, we see that it was done with the best intentions. There is no doubt about that. It was trying to ensure that more custodial parents, as they used to be referred to in those days, received reasonable support for the children that they were caring for once they had separated. And it certainly did help. But as time has moved on, as circumstances have changed, we recognise that the system has not worked in the way it ought to for children in particular and for separated parents.

Unfortunately, it is a fact of Australian life that there are numerous—and a growing number, unfortunately—of separated parenting situations. They are part of normal Australian life. What we should be doing in government is attempting to assist people to be able to bring their families up in the best possible way they can, understanding that not in all circumstances do relationships remain solid. We should not be casting any aspersions on anybody in particular with regard to whether it is right for a child to be in a particular relationship. We should accept the fact that relationships do break down, that that is an enormous strain on children and parents and that, when separated parenting is required, legislation should support them in the best way possible.

I think all of the speakers on both sides of the House have today supported the legislation and I am very grateful for that. It is very important that we have a bipartisan approach so that, moving forward, these hundreds of thousands of families have some certainty about what is going to occur in the years to come, understanding that many people remain with the child support payment system for 15, 16 and 18 years, depending on the age and number of their children. It is a very long association. We intend to improve people’s relationships with the Child Support Agency in a very fundamental way so that it is interacting with parents, so that it is not adversarial, so that it respects people’s positions, rights and the circumstances they are in, and so that it does its absolute best to help them in a difficult time.

I make no excuses on behalf of the government for ensuring that the one group fundamentally uppermost in our minds at all times in dealing with the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006 was in fact, and will continue to be, the children—not only children of first marriages but children full stop. The fact is that the existing system that we are about to replace certainly valued children from first marriages more highly or greatly than those from second marriages or relationships. That was unfortunate and inappropriate. That is one of the many measures that is addressed.

Many other positive measures in this bill have been outlined by speakers on both sides of the House, reflecting the circumstances that have been portrayed to them by constituents who have come to them over the years with very heartfelt circumstances. There are things that have left an indelible mark upon them in their understanding of how important it is for these changes to occur.

These changes are occurring over a three-stage period. The first have already been introduced. Obviously, that legislation has been through the House and the Senate and is now law. The next range of changes commence from 1 January 2007, and then the main formula changes commence from 1 July 2008. We have covered this territory before but, in summing up, it is worth reminding the House that the reason behind that time frame is that there has to be an enormous amount of correspondence between all parties that are involved with the Child Support Agency. There are major IT systems changes. It is critical that we train staff in the child support agencies to deal with these complex issues, and for them be able to explain the issues to the separated parents in a clear, concise and family-friendly manner so that we can assist them all.

One of the things that has come to my attention time and time again as a member of parliament—and not only as the minister responsible—is the fact that people who have disagreed with assessments that have been made want to have the opportunity to be able to have their circumstances reviewed external to the Child Support Agency. Now, for the first time, this bill makes that possible. It will give an independent third party a chance to evaluate the circumstances that are prevalent in both partners’ circumstances and try to come to a judgement that is in the best interests of that family and, in particular, the children. The changes commencing from 1 January 2007 in particular are designed to improve the procedures that are followed by parents when seeking that review.

We are introducing powers within the court to increase the information that the Child Support Registrar is allowed to access so that parents can have their circumstances heard and dealt with in the courts in a more even-handed fashion as well. This is important from a practical perspective as well as from a symbolic one. If you are a parent and you feel that the other side, the other party who you may have had some very challenging times with, is being advantaged by the system, it does not do anything to support the parents in trying to conduct their lives in the best interests of their children.

This has been a very comprehensive process. The Parkinson review has done an enormously good job. It has dealt with a lot of people around this country. It has dealt with those who have been the closest to these issues, and I pay tribute to and thank the many advocates of the mothers and the fathers, acting sometimes collectively and sometimes independently, who have put forward their views and debated these points. They have reconciled themselves to the fact that not everything that they were seeking was possible. But, in the best interests of trying to find an improved system, they have worked with the government to bring about the changes that we are about to vote on.

I thank the opposition for their constructive approach to this. I note that they are not denying a second reading to the bill. I wish to make no political points at all. This is about Australian families and Australian children and giving them the best opportunity to survive and to thrive in a world in which separated parenting is a reality. I commend the bill to the House.

Question put:

That the words proposed to be omitted (Ms Plibersek’s amendment) stand part of the question.