Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

I rise to speak on the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011. Through this bill the Gillard Labor government is seeking to legislate to give effect to some of its election commitments. One assumes that these are commitments it is happy to uphold, unlike the fraud the Prime Minister perpetrated on the Australian people when she, together with her government alliance partner the Greens, announced a carbon tax, a massive assault on Australian families and their household budgets. I was of the view that the faceless men of the Labor Party wielded the power, but in this new paradigm it seems that it is not them at all; it is the Greens.

When the Prime Minister lost her majority and lost her legitimacy after the 2010 election, Australians might have been forgiven for thinking that she would have the integrity to stand by her promise not to introduce a carbon tax, but she chose not to. The Prime Minister chose to betray the Australian people. She chose to put her alliance with the Greens before the interests of the Australian people. It is a decision for which she will be held accountable. It is a decision for which she will be judged by all Australians.

This bill seeks to amend the Social Security Act 1991, the Veterans’ Entitlements Act 1986, the A New Tax System (Family Assistance) Act 1999, the A New Tax System (Family Assistance) (Administration) Act 1999, the Income Tax Assessment Act 1997 and the Social Security (Administration) Act 1999. In seeking to amend the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 the bill seeks to give effect to proposed changes to the work bonus to exempt the first $250 per fortnight of employment income from the income test and introduce an employment income concession bank to enable pensioners to accrue any unused amounts of the $250 fortnight exemption, to a maximum of $6,500, whilst also offsetting future assessable employment income.

The bill seeks also to increase incentives for age pension recipients and veterans’ affairs income support pensioners to work by enabling them to keep more of their pension when they are working. The coalition raised the issue of pensioners who worked in various seasonal employments, for example, as Santas and school exam supervisors. They were having their pensions cut or reduced as a result of the short-term income that they were receiving. There was a well-known case here in Canberra where a man who, like many others in the Christmas season, worked for a few weeks in a department store receiving income as a Santa Claus, holding children on his knee and having photographs taken with these young children. Because of that increase in income over a short time, he was then penalised in his pension as a result of that short-term work. Surely in this country an incentive for people to work even on a seasonal basis, on a part-time basis or on a temporary basis, ought to be encouraged rather than discouraged by legislation.

The Gillard government has finally acted, but pensioners should be wary. They should be wary of a government that launched a solar panel rebate scheme and then decreed that any rebate pensioners received from selling additional electricity generated by their solar panels back into the grid was income and thus impacted on their pension. The government approach is to tend to give on one hand but to claw back on the other. The Labor-Greens carbon tax will also hit pensioners. There will be higher electricity prices, higher grocery prices and higher petrol prices, which, of course, flow through into the prices of almost every good and service in Australia.

The coalition welcomes the changes to work bonus—changes it called for and changes which it proposed. The amendments to the family tax benefit part A were taken from the recommendations of the Henry review, which argued that family payments should be the main focus of assistance for children aged up to 18 years or until the completion of secondary school in the year a person turns 18. The proposed amendments will raise the payment rates for each eligible child aged 16 to 19 so that they are the same as for those aged 13 to 15. These amendments will have flow-on effect in rent assistance as the increased rates for older children will make them eligible to be considered a ‘rent assistance child’. Currently, rent assistance cannot be claimed in respect of children aged 16 and over.

The bill will position FTB A. as the primary form of assistance offered to young people undertaking secondary education or the vocational equivalent. The proposed measures are also intended to ensure that families are not put in a position of attempting to calculate which payment is best for them. I had hoped that this bill might reverse the contempt this government has shown for rural and regional students, but I will return to that later.

It seems that it is more important for Labor to tinker with programs that have failed rather than to try and help students in need. The latest program failure is the matched savings scheme. This scheme was introduced by Labor in 2009. The scheme matches dollar-for-dollar savings up to $500 for persons on compulsory income management. At present the matched savings scheme starts automatically for all who start a money management program. This change will shift the onus onto the individual to claim the MSS. The matched savings scheme is nothing more than a Labor smokes-and-mirrors policy. The program has been a total policy failure. On 16 March, the Australian newspaper reported on just how much of a failure this program has been. Patricia Karvelas reported:

Only one person has received the full $500 available under the Gillard government’s $53 million matched savings scheme for welfare recipients launched last July.

Only one. A $53 million program and only one recipient, according to the report in the Australian.

Indeed, Maree O’Halloran, President of the National Welfare Rights Network, said the scheme seemed to be ‘untried, untested and unpopular’. She went on:

The revelation of a next-to-zero take up comes as no surprise to Welfare Rights. The scheme is both complex and misguided. It fails to recognise the reality of such low levels of payments and the proven levels of deprivation that social security recipients experience.

…            …            …

Even among the most thrifty and frugal there is limited capacity to save.

It is disappointing that rather than tackling the problems with the program, the government, in this legislation, is now merely tinkering around the edges.

The Prime Minister let the cat out of the bag last week. She said the Greens were extremists. On this side of the parliament we have always known that, but the question for the Prime Minister is: if the Greens are extremists, why has she formed an alliance with them? Why has she formed government with them? Why is she allowing the leader of the Greens to call the shots?

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

Because they are not as extreme as you!

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

That is an interesting interjection, which ought to be placed on the parliamentary record. The Greens, according to the member opposite, are ‘not as extreme as’ the opposition and yet his leader has gone in the national media to the public of Australia and said just last week that the Greens are extremists. The question remains: if the greens are so extremist, why do we have this formal alliance which props up the person who sits in that chair at question time—namely, the Prime Minister of this country—and which props up her position in government and her position in the Lodge?

Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

She is a social conservative.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

As my honourable friend here reminds me, she is also now a social conservative. But the question remains. The leader of the Greens receives regular briefings from the Prime Minister’s office—more than, I suspect, the honourable member opposite who interjected just recently. He, the leader of the Greens, Senator Bob Brown, is dragging the Labor Party along as he pursues his extremist agenda. The reality is that the Labor Party has lost its way. They are no longer representing mainstream Australia. They are no longer the great party of the working class of this country. They are pandering to fringe elements and pursuing fringe issues. There is no better example than their contempt for rural and regional Australia.

What this bill does not do is to help regional students. In her last-minute deal, the Prime Minister did a deal with the Independents to avoid an embarrassment on the floor of this place. And in doing so, Labor and the Independent members of this place have voted to kill off the Independent Youth Allowance Bill. Last year all crossbench members, except the Greens, supported a motion which sought to make the independent youth allowance criteria fair for all regional students. But when it actually came to supporting a bill that would make these changes, the members for Denison, Lyne, Kennedy and New England voted against the coalition’s bill. Indeed, the member for Lyne seconded a motion in support of the bill proceeding and spoke in favour of it, but then, at the last moment, voted against after a meeting with the Prime Minister. The coalition welcomed the support of the member for O’Connor and even the Greens member for Melbourne in supporting a debate on the coalition’s bill.

Labor’s commitment to Independents to bring forward a review of youth allowance, to report by 1 July this year, does not address the problem now—and there is a real problem for many students in regional areas of Australia right now. It is months before we have a review to report on 1 July. In the meantime there are students in many parts of regional Australia who are suffering deprivation, in our view and in the view of them and their parents and many communities around the country, because the government are not prepared to act now—regrettably, with the support of so many Independent members of this House. The coalition’s bill sought to do that: to get action now.

Nor does Labor give any firm commitment to fixing the independent youth allowance issue, although in the current context it is probably better they have said nothing, as we have learned that the Prime Minister cannot keep her promises and just cannot be trusted. The Prime Minister’s promise of a review should be weighed against the many broken deals, bundled programs and hopeless mismanagement of youth allowance over the last few years. This Labor government promised no carbon tax, but now is drafting one; it promised a national takeover of hospitals, but scrapped the idea; it promised a national curriculum to begin in 2011, but it has now been delayed at least until 2013. And the list goes on and on and on.

It is time this government did what was right. Stop breaking promises. Stop taking decisions that hurt Australian families. Admit your position on youth allowance is wrong and support the amendment that I have circulated in my name, which I now move:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House require the government:

(1)

urgently to introduce legislation to reinstate the former workplace participation criteria for independent youth allowance, to apply to students whose family home is located in inner regional areas as defined by the Australian Bureau of Statistics instrument Australian Standard Geographical Classification; and

(2)

to appropriate funds necessary to meet the additional cost of expanding the criteria for participation.”

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment second?

Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

I second the amendment.

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to support the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011. It is always very satisfying to speak on bills such as this one. This is another example of this government’s delivery of some very important election commitments and another example of this government’s focus on the future. Legislation such as this reinforces the responsive, positive and progressive nature of this government and I thank the Minister for Families, Housing, Community Services and Indigenous Affairs for her commitment to delivering for families and seniors, particularly, of course, those in my electorate of Greenway.

This bill gives effect to three election commitments and two non-budget measures. All of these commitments will operate to greatly improve the lives of many Australians. This bill will deliver on our plan to expand the existing seniors work bonus, provide better access to family payments for families with a teenager aged 16 to 19, and deliver on our commitment to improve the provision of the baby bonus for eligible families. As a result, many seniors, families with teenagers and families who have just had a baby or are thinking about having a baby will be better off. I am extremely glad to support this bill because it will greatly improve the financial and personal circumstances of many of my constituents.

Firstly, this bill will expand on the seniors work bonus introduced in 2009 and continue to fulfil the work of the secure and sustainable pension reform package. This reform package contains some of the most significant changes to the pension since it was introduced some 100 years ago and is a vital investment in preparing Australia for the future. This bill will ensure that the first $250 earned in a fortnight will not be treated as income for social security and veterans’ affairs income tests. This bill will make certain that seniors can still receive the benefits they are entitled to in their respective pensions, but can also still enjoy the dignity that employment can provide. It does this by increasing the amount of income a pensioner may earn before their income is affected in any accessible fortnight. This bill also enables pensioners to roll over any unused fortnightly work bonus between fortnights, to a maximum of $6,500. As the Prime Minister noted prior to the election last year:

“Many age pensioners take on part-time and occasional work and should be encouraged and rewarded for these valuable contributions to our community.

“A re-elected Gillard Labor government will introduce a new, more generous work bonus for age pensioners from 1 July 2011.

“Hard-working pensioners will now be able to keep up to $6,500 of the money they earn from part-time work each year. This benefit can be ‘annualised’ to especially help with seasonal work.

It is for this very reason that this bill is so important. It will allow seniors the opportunity to participate in the workforce without worrying about forgoing their pension entitlements in the process.

This is a very important development for many seniors in my community, an electorate where some 15,000 people are of qualifying pension age. According to the 2006 census in Blacktown, the age group which is increasing the most is the 80- to 84-year-old age bracket. This is reflected in the amount of correspondence and representations I have had with seniors in my electorate who are concerned that their one-off work—often helping a community organisation—has resulted in them earning too much income and consequently seeing their pension decreased. This has caused much stress for many elderly people in my community. These are people who want to keep active and still enjoy the dignity of work but may have been stung by the unintentional consequences that have existed until now. This bill will restore some common sense, be responsive to those concerns and ensure that seniors on the pension can still contribute to the community in this way.

In guaranteeing people the security to participate in the workforce on a casual basis without the fear of losing their pension, we can help stimulate the community and put seniors’ minds at ease. There have been a number of instances in the past where senior citizens who have taken up the seasonal work, including as a department store Santa Claus, have had their pension reduced, such as 80-year-old Mr Ted Carver. As was reported in the media early last year, Ted worked six weeks of the year as Santa and was understandably concerned about being worse off financially as his pension was reduced under the old rules on earnings. This bill will directly remedy this issue and in effect become our work bonus Santa clause.

Some seniors in my electorate have also raised concerns regarding their ability to receive their pensions while still being able to devote a few weeks of the year to supervising exams at their local high school. These constituents are doing a fantastic community service in facilitating exams for local students and they were in effect being punished for enriching the lives of students in Greenway. This bill will ensure that any fears they had with respect to losing their pension will no longer impact on them.

As we prepare to celebrate Seniors Week in my electorate, which is of course this week, we take the time to praise seniors for their valuable contributions to the electorate of Greenway. This bill is a well-timed gift to those seniors who contribute to our community through the avenue of casual paid work. In an electorate where some 13,000 residents are over the age of 65, I believe we have a special obligation to provide them with suitable services to ensure they can live a happy and healthy life. Indeed, in this place only a short while ago today, I commented on how my electorate is often referred to as Australia’s nursery because of its very young population; but it is also a population that is getting older and living longer. As our population ages, there will be increased economic and social challenges that we must meet. It is our job to ensure that seniors are treated with the dignity and respect they deserve, and we can achieve this by providing them with the right services and care, as well as sound public policy, which is why this bill is so important.

The second election commitment this bill will deliver on will significantly improve the situation of many families in my electorate. As parents will tell you, the cost of raising children is not cheap and it does not lessen when they become teenagers. The financial burden of trying to provide every opportunity for young people weighs heavily on the shoulders of many families, and this bill will alleviate some of that financial burden for the benefit of parents and their children. In the past, when a child turned 16, the maximum rate of family tax benefit part A dropped from $208 per fortnight to $51 per fortnight. It is no wonder then that this sharp drop in financial assistance during such an important time in a student’s life was complained about as extremely counterproductive. This bill is a direct response to that. It will increase family tax benefit part A by around $160 per fortnight for teenagers aged 16 to 19 who are in secondary school or the vocational equivalent. This bill has consequently aligned the 16- to 19-year-old rate with the 13- to 15-year-old rate, greatly extending the benefits for our young people up until the time they finish school. In doing so, this government has delivered on its promise made during the last election to provide better access to family payments for families with teenagers.

Providing all the social benefits we can to our young people is a very important obligation, and the most important benefit, I believe, that we can provide and must provide is a quality education. As I have said a number of times in this place, education is the great enabler. This bill will make paying for an education and the costs associated with that education a more manageable task for families. Over the next five years, this bill will benefit the families of around 590,000 teenagers who will receive up to $4,000 a year in additional assistance. This is a big step forward for Australian families and our young people.

The third election policy this bill will deliver on is improvements to the baby bonus for eligible families. This measure will assist families with the upfront costs of having or adopting a new baby. While the total amount of the baby bonus will remain the same, parents of new babies will receive more in the first fortnightly instalment than in the 12 subsequent fortnightly instalments. What this means for new families is that more money will be available to them in the often difficult first stages of welcoming a child into the family. Many of my friends and constituents who have recently started families have in fact told me how difficult they have found the early stages of raising a child. Not only does the arrival of a new child create added pressures and sleepless nights, it undoubtedly hurts the hip pocket. While this bill will not help new parents get a full night’s sleep, it will put many minds at ease and it will allow the expensive initial transition stages to run more smoothly as more income is made available.

I am also very satisfied about mentioning the two nonbudget measures given effect by this bill. In 1957, thalidomide was introduced on the Australian market and was soon prescribed to pregnant women to combat morning sickness. It was due to the research of Australian clinicians that thalidomide was discovered to be responsible for thousands of children being born with horrific abnormalities around the world. As part of this bill, 36 Australians affected by the morning-sickness drug thalidomide will receive annuity payments from British company Diego PLC. Ordinarily, such payments would be assessable as income for social security and veterans’ affairs purposes, and for income tax purposes. Under this bill, these annuity payments will be excluded from the above-mentioned purposes. These payments are not compensation payments but ex-gratia payments negotiated outside the civil law system that recognise the tragic plight of thalidomide survivors. This bill also makes minor amendments to income management measures. These measures will assist those on compulsory income management to improve their financial literacy and to encourage savings.

The benefits of this bill are great. They stand to benefit the people in my community who really need them. These investments are a reminder of this government’s commitment to policy delivery and to investing in the future. It is a fantastic endeavour by the minister, on which I congratulate her—and I thank her for her ongoing interest in my electorate of Greenway. It delivers on some very important election promises that will positively affect the full spectrum of people in our community, from our senior citizens to our young families and children. I am very pleased to support this bill.

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011, which includes a compilation of amendments across a range of legislation. These include variations to eligibility parameters within the family tax benefit scheme for secondary school students aged 16 to 19, together with changes to the youth allowance parental income test, which was covered in great detail earlier by the shadow minister for families, housing and human services. Other changes in this bill allow for a larger baby bonus instalment to be paid upfront to assist with the costs faced by families with newborn children, and an amendment to ensure that the beneficiaries of the Thalidomide Australia Fixed Trust are able to have their payments exempted from income tax and welfare tests.

The particular changes within this bill on which I wish to focus my attention, are the amendments to the Social Security Act 1991 and the Veterans’ Entitlement Act 1986. These will affect changes to the work bonus scheme, which was introduced by the Rudd government in September 2009. Shortly after its implementation it quickly became apparent that the legislation was not achieving its intended outcomes, as it did not take into account the nature of the work actually being undertaken by many of those eligible. Many pensioners perform seasonal work or have temporary jobs such as being school exam supervisors or Christmas Santas. They were effectively being penalised by the new system that was supposed to reward them for their initiative.

In February 2010, only months after the passage of this legislation, the coalition raised these concerns directly with the minister and in the media, followed by detailed questions in budget estimates. After sustained pressure from the coalition, leading to an obvious fear of electoral backlash from the significant pensioner community, the new Gillard government finally adopted these changes as part of its election policy. Now, more than 12 months after the coalition first highlighted the problems with this legislation with the minister, we find ourselves here today to speak on the amendment.

This amendment will make changes to the pension work bonus to exempt the first $250 per fortnight of employment income from the income test and enable pensioners to accrue any unused amounts of the $250 fortnightly exemption to a maximum of $6,500 and to offset future assessable employment income. In simple terms this will increase incentives for age pension recipients to work by enabling them to keep more of their pension when they are working. It is important in a society where welfare dependence is far too common that the government provides these incentives for people who want to extend their time as participants in the workforce, particularly as we understand our changing demographics and the evolving needs of an ageing population.

However, it is also essential for government to follow this up with incentives for businesses to employ those who are of or approaching pension age. It is no surprise to hear of the cynicism that many of my older constituents express about government strategies to keep older people in work as their experiences show that companies are generally disinclined to provide them with opportunities for this employment in the first place.

In reply to an email I sent on this bill last week one such constituent claimed that whilst she supported the idea of this legislation she found it to be, in her words, ‘mainly academic’. The quote continues:

You can’t increase the incentive for older people to work if there is no work available for them—apart from, as you mention, working as Father Christmas once a year.

She went on to say:

I think that the Government should consider incentives to EMPLOYERS not just employees. Maybe if there were some financial benefit to employing older people, companies may consider it. There are loads of other benefits—we have experience, we tend to be more reliable, we don’t get pregnant, we tend not to miss work on Mondays because of hangovers etc etc. The problem is getting the employers to recognise these!

Whilst I will not go so far as to sully the image of non-pension-age employees as generally unreliable or around the corner from pregnancy or a hangover—hopefully, not both at the same time—I believe that this constituent has a very valid point.

It is for this reason that the coalition went into the 2010 election with a policy to provide real incentives to help unemployed Australians to re-enter the workforce, stating in our policy that:

The Coalition is determined to ensure that people aren’t abandoned to a lifetime of welfare dependence but are engaged in work if they are reasonably capable of it.

The coalition’s policy for real action on employment participation included the introduction of a $3,250 seniors employment incentive payment for employers that hire workers aged 50 or older. This one-off payment was designed to help overcome the initial reluctance of some employers to appoint mature job seekers. This policy recognised that finding work becomes increasingly difficult for those over 50, not because of a reduced desire to work, a reduction in skill levels or ability to contribute but because many employers prefer to give job opportunities to younger workers. Therefore, the incentive built into this bill may be positive but it is all but a toothless tiger in attacking the problem of mature age employment participation unless it is coupled with a program to provide incentives for the employer to offer these people jobs in the first place.

These incentives would serve to encourage those looking for work, and also to motivate many of those who are currently ignored in the official unemployment rate as they have given up hope and simply stopped looking, and therefore do not even present as a statistic in our unemployment data.

According to a pre-election submission by the National Seniors Association:

In 2009 almost 60,000 Australians aged over 55 counted as discouraged workers, that is: they wanted to work but had stopped looking because no one would employ them. The main reason cited was ‘being considered too old by employers’.

The incentive payment offered by the coalition was worth $250 a fortnight to the worker for a total subsidy for six months of $3,250. That is roughly equivalent to half the cost of the current Newstart allowance. The incentive payment would have been paid in a single lump sum directly to the employer after six months’ continuous employment by the eligible worker.

According to analysis performed by the National Centre for Social and Economic Modelling, approximately 900,000 people aged between 50 and 65 could be eligible for this form of incentive payment. The uptake of this incentive by even a small amount of those eligible would lead to considerable savings to taxpayers through reduced benefits and increased taxation revenues, as well as the obvious positive impact on both the community and the individual through increased levels of employment.

On this broader issue of employment participation, the statistics make it patently obvious that Labor has comprehensively failed to help unemployed Australians to get off benefits and back into the workforce. Since 2007, the number of long-term unemployed Australians has gone up. Mutual obligation has been watered down to be all but unrecognisable, and as a result the number of penalties for breaches has been drastically reduced. I urge this government to balance the incentive in this bill for the older job seeker to find or maintain employment with a strong incentive to the job provider to hire from this important, reliable, industrious and growing segment of our society. In not opposing the overdue amendment in this bill, the coalition adds the disclaimer that we in this place still have much work to do to achieve real outcomes on this important issue.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I also rise today to support the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011. That is a very big name for a bill, Mr Deputy Speaker Kelvin Thomson, but it does a heck of a lot. You and I and many on this side of the House would have gone through our electorates, up hill and down dale, campaigning on these issues before the last election.

What is contained in this bill is, quite frankly, what defines us as being a caring government. The bill does a range of different things. There are five specific matters—five schedules—that are contained in the bill. One deals with work bonuses for seniors. A second increases family tax benefits for children or certain teenagers undertaking secondary studies and living at home. Another deals with the baby bonus, and another with non-budgetary matters relating to thalidomide payments. The final one, schedule 5, deals with income management.

Mr Deputy Speaker, the government recognises the pressures that people are under. Families experience these things week in, week out. You know that; I know that. Anyone who actually bothers to doorknock their electorate will be hearing that in droves. The government recognises the importance that the family unit has, and this bill is designed to alleviate some of those financial pressures in order to help maintain families as cohesive and central to the lives of all people. So the first part of this bill is very important.

During the election campaign, the government committed to expanding the existing seniors work bonus, which allows working aged pensioners to keep working and keep more of their pension when they undertake paid work. Interestingly, I recall very vividly that when we were in opposition there was an employment committee inquiry. We heard from a number of people who described themselves, for want of a better term, as ‘grey nomads’. We heard how they had plenty to offer provided they were not prejudiced in still receiving their pension. I think that is pretty right, and I am sure it makes more sense to speak that way the older and greyer we get.

When passed, this bill will allow pensioners to earn up to $250 a fortnight before their pension is affected, and that is pretty important for them. The schedule will commence on 1 July. The work bonus will provide incentives for receiving extra earnings before the earnings are assessed as income. If a pensioner earns less than $250 in a particular fortnight, they will accrue the credit to their new employment concession, banking up to the value of that $250 in that fortnight. The income bank will then be able to be built up to a maximum of $6,500 and can be offset against the employment income earned at a later period of time.

For anyone who sees what seniors do in our community—working a part-time job or even in semi-paid volunteering work—this is quite significant for all those areas of activity out there where people who see themselves as having time and ability are involved. But they certainly do not want to jeopardise their pension in providing these services. This is something that is very welcome. We know that, because this is what we campaigned on in the last election.

In my federal seat of Fowler I have 23,500 pensioners. They play a really important role in our community—one which should be encouraged. This goes in some measure to rewarding some of their valuable contribution. It is an encouragement and it allows people to continue in paid work at the pace that they elect and in a manner that will not prejudice the application of their pension. As I was alluding to, you cannot put a price on that sort of experience, and this will be a reward for older Australians for using their experience and deploying that experience within our community.

The second matter, again, is a very, very important matter. Apart from the 23,500 pensioners, I have wall-to-wall families in my electorate. This matter is very important for those who have teenage kids in high school. The second part of this bill addresses the issue of supporting families with teenagers. The bill delivers on another key commitment: to increase family assistance to $4,200 a year for teenagers in secondary study. This will be a significant help to families with older children and, at the same time, encourage teenagers to stay at school. Oddly enough, that is a matter I spoke about a little earlier: the issue of school retention rates. Mine is very much a working class suburb, and I see the pressures that families are under. There are certainly pressures on older children, teenagers, to leave school. This bill will help to keep kids in study; it will help families to encourage that, and that is something we need for the future—to increase the school retention rate and help these kids through their training and education to become more job ready and more malleable in a rather dynamic and ever-changing employment market, such as we see around the countryside.

This increase will be a significant help to families with older children. As a parent of three and now a grandparent of five, I am glad to report, I certainly know firsthand—and now see with my children—about financial constraint placed on expanding families and those with older children. We all love our kids, but we have to be realistic that they can be expensive. With today’s pace of life and the pressures we all work under plus the demands our kids make, this bill is aimed directly at taking that financial pressure off families with kids in their teenage years.

Under the existing system, many teenagers opt to leave school early to assist the family. As I said, this has happened to some parents in my own electorate where families experienced financial difficulties. The government recognises that we must assist families with teenagers aged between 16 and 19 who are in full-time secondary study or vocational education. The maximum rate for family tax benefit part A will increase from around $160 a fortnight for teenagers aged between 16 and 19 who are undertaking or engaged in secondary school or vocational education through TAFE or other providers who are exempt from this requirement.

The rate will align to the rate applicable to 13- to 15-year-olds and ensure that government assistance for families does not fall away when children aged 16 and older decide to remain at school. This recognises that with kids turning 16 there is a disproportionate cost, in my humble view—at least there was if I recall my own kids at that magical moment. If anything the costs exponentially start to rise from there on in. It is estimated that this increase will benefit 590,000 families over the next five years. In addition to this increase and family tax benefit part A, families will also be eligible for rent assistance. Currently, when a child turns 16, rent assistance ceases. However, these reforms will provide rent assistance for families with children aged between 16 and 19 who receive more than the base rate of the family tax benefit part A.

Also as a result of these changes, single income families may become eligible for family tax benefit part B if the child moves from youth allowance to the family tax benefit part A. There are some considerable benefits for families. It gives a greater degree of flexibility and, if anything, it is designed to help ensure that families are in a position to encourage kids to stay at school. Families on family tax benefit part A with three or more children may also benefit from the large family support of $295 per annum.

Youth allowance will continue to be available to teenagers aged under 18 years who meet the independence criteria and who need to live away from home in order to attend full-time study or who are not in full-time study or do not meet other eligibility criteria. This bill will include the changes to the youth allowance parental income test to protect the entitlement of youth allowance recipients with a sibling aged between 16 and 19 who remains in or transfers from the family tax benefit system as a result of these new measures.

Another aspect that was campaigned on assiduously before the last election was the baby bonus, the third part of this bill. Another election commitment is being delivered to assist families to support the upfront costs of a new baby. As you are aware, currently the baby bonus is paid in 13 fortnightly instalments. If this bill is passed, from 1 July 2011 the first payment will be $500 more than the other 12 instalments. This will help parents meet upfront costs associated with the arrival of a new baby. Mr Deputy Speaker, as you know, my fifth grandchild was born six weeks ago, so I know the price of baby protection items for cars and the new stroller that does many other magical things as well. These costs are significant, particularly car-carriage arrangements which in today’s society are so essential. I feel for my daughter paying for these although I suspect her mother helped her out greatly. Being able to access that additional $500 payment upfront will be significant.

The other two areas I mentioned at the outset are non-budgetary measures. I have probably left myself too little time to talk about them. One concerns a thalidomide payment. I know the parents of many kids of my generation were introduced to thalidomide. It was a treatment once used as a cure for morning sickness, particularly in the fifties and early-sixties. However, as we know, it has caused an enormous amount of heartache because of birth defects. This bill makes changes to the income tax and social security laws to ensure that these annuity payments are not taken into account or treated as income. Particularly for those who live day in, day out with the effects of thalidomide treatment for their mother, this is something that will certainly be regarded as a welcome relief.

Schedule 5 of the bill deals with the minor changes that the bill will make around income management arrangements. It will clarify when the qualifying period begins for matched savings schemes for payments. It will also clarify the role of the nominees under the income management arrangement and will provide debt recovery arrangements in circumstances where Centrelink has issued a cheque or an income management arrangement on a customer’s behalf. I commend the bill to the House. I think it is something that we should all be proud of, and it was worthwhile having that long campaign. (Time expired)

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Bill 2011, and I also refer to the opposition’s amendment tabled at the time our opposition spokesman was speaking. Before the election the government made three significant commitments, as they call them. In a move most unlike this government, they are now actually following through on those commitments and they are seeking to have these announcements converted into legislative changes with this bill. They are the three significant commitments. There are other changes embedded in the bill as well.

The first commitment was in relation to expanding the work bonus, which was introduced as a part of pension reforms in late 2009. The work bonus allows age pensioners to continue to work part time without losing quite so much of their earnings. It is incredibly important for the wellbeing of people on a pension to be able to work for as long as they can, but sometimes it is a token of love, given a lot of that extra income they earn is clawed back. So I commend this change. In fact, what it will mean is that from 1 July 2011 the work bonus, as it is called, will see the first $250 of employment income earned in a fortnight excluded from the income test, regardless of the total amount earned by the person in that fortnight. This will be on a dollar-for-dollar basis up to $250, rather than the 50c in the dollar reduction up to $500 under the current rules. This is a better system for rewarding pensioners for the work they choose to do. Given our skills shortage in this country and the significant number of Australians who are over the retirement age these days, it is an important thing that we do in that amendment.

The second significant issue was to change the current situation where, when a child turns 16, the family tax benefit part A drops from $214 per fortnight to just $53 per fortnight. Rent assistance also stops when a child turns 16, and families may lose eligibility for family tax benefit part B, the large family supplement and multiple birth allowance. Clearly the expense of raising a child does not substantially diminish the day the child turns 16, especially if they are still a dependent child in that family household, so this is a sensible change. What it will do is increase assistance for families with teenagers aged between 16 and 19 who are in full-time secondary study or a vocational education equivalent. We will see the maximum rate of family tax benefit part A increasing by around $160 per fortnight for teenagers aged 16 to 19 who are in secondary school or a vocational equivalent or who are exempt from this requirement. This will align with the 13- to 15-year-old rate and ensure that government assistance for families does not fall when an older teenager in full-time study turns 16. Again, it is a sensible change.

In addition to the increase in family tax benefit part A, families will also be eligible for rent assistance. As I said, rent assistance currently cuts out when a child turns 16. We are not against those amendments at all, but I have to say that this statement in the explanatory memorandum is rather extraordinary:

This initiative supports the Gillard Labor government’s objective to improve year 12 or vocational equivalent completion rates and meet our target of achieving a 90 per cent year 12 attainment rate by 2015.

What we wonder is why this government has not then continued its thinking and said, ‘We want to see rural students be able to step through that year 12 attainment into tertiary education, which may have to take place in a city somewhere distant from home.’ Of course, while we support this notion of the child continuing to be given substantial support beyond the age of 16, we as the opposition are most concerned that the independent youth allowance—and it is 12 months today since its change—is cutting out the chances of rural students, especially those designated or zoned as inner regional. It is cutting them out from being able to successfully complete the gap year requirements that are listed in the criteria, and I will come back to that point.

The third significant change in this set of amendments is to do with the baby bonus. From 1 July 2011, parents of new babies who receive this bonus on or after that date will receive more of their payment upfront. Many in this House will recall that when we, the coalition government, introduced this baby bonus, all of the payment was paid upfront unless the parent had a significant problem with money management, and that was negotiated with Centrelink. This government chose to have the baby bonus paid in 13 fortnightly instalments. It now understands that you do need a little more money upfront in the first payment, so $500 of the baby bonus will be in the first payment and that will be more than the amount paid over the other 12 instalments. Again, this is a sensible change. I cannot see why it was not foreseen. Blind Freddy could have seen that it was important to make sure that you have more, in that first instalment at least, for those early expenses for families—buying new baby equipment such as car seats, bassinettes and clothing, and paying for hospital expenses and so on. Finally the penny has dropped and that change has been made, I am very pleased to say.

In this bill there are also some measures to do with making sure that those who suffer from disability related to their mothers taking Thalidomide all those years ago will be better supported in the future.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Order! It being 8 pm, the debate is interrupted in accordance with standing order 34. The resumption of the debate will be made an order of the day for the next sitting and the member for Murray will have leave to continue speaking when the debate is resumed.