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 Family Assistance and Other Legislation Amendment Bill 2012. This bill promulgates amendments to family payments announced in the Mid-Year Economic and Fiscal Outlook, as well as implementing changes to support for carers, which were initially outlined in the National Carer Strategy.

The first matter is immunisation requirements. The bill will introduce a measure to amend the family assistance legislation to make payment of the family tax benefit part A supplement conditional upon a child meeting immunisation requirements. These changes apply to the income years in which a child turns one, two and five years. Consequently, provision of maternity immunisation allowance will cease from 1 July 2012. The Labor Party contends that this measure will strengthen incentives for parents to have their children immunised and help improve immunisation rates over time.

The second matter in the bill is the baby bonus. This measure will pause the indexation of the baby bonus for three years from 1 July 2012 and it resets the amount of the baby bonus to $5,000 per child from 1 September 2012. I note that currently the amount payable under the baby bonus is $5,437. Effectively, from 1 July this year the government is reducing the baby bonus by $437, an almost 10 per cent decrease in the baby bonus. In addition to that, it is placing on pause the indexation that would normally occur to the baby bonus over the next three years. What we have in this bill is a direct hit by this government on families having children. This is the largest attack on families and household budgets, and it comes at a bad time for Australian families.

This reduction in support for Australian families needs to be put in context, because it is part of what can be seen as a broad attack on middle Australia. Firstly, we on this side of the House can still recall Labor's attack in the 2008 budget when it introduced a means test on the baby bonus, which limited the bonus to families with an adjusted taxable income of $75,000 or less in the six months after the birth of the baby. Secondly, in the 2008 budget Labor means tested the family tax benefit part B so that any family where the main income earner had income of more than $150,000 lost the benefit. Thirdly, in the following year's budget, in 2009, Labor froze indexation for the full payment of family tax benefits A and B, the baby bonus and the dependent spouse rebate. Labor then announced that from 1 July 2009 the income test for the Commonwealth seniors health card would include income from superannuation streams with a tax source and a salary that is sacrificed to superannuation. They subsequently backed down on this after community outrage. Then, in the 2011 budget, Labor froze indexation for family tax benefits A and B supplement payments. Then we had the flood levy: those earning over $100,000 pay 0.5 per cent of taxable income in excess of $50,000 and one per cent of taxable income in excess of $100,000. At the same time, childcare costs are continuing to go through the roof for families around Australia. This is the context of this latest attack on families in Australia.

On the government's own figures, under the carbon tax, which will come in from 1 July this year, there will be an immediate 10 per cent increase in electricity prices and a nine per cent increase in gas bills. That comes on top of the fact, as I have pointed out in previous debates, that over the last four years across Australia electricity prices have gone up by 61 per cent and gas prices by 37 per cent. We have also had health costs go up by 20 per cent, education costs by 24 per cent, and even rent costs have gone up in excess of 20 per cent. All of this is a direct attack, a direct hit, on the families of Australia, and there is no end in sight. The Prime Minister's own figures in her 'carbon Sunday' documents show that more than three million Australian households will be worse off, and these are not rich people. A teacher married to a shop assistant will be worse off under the government's package, even on the government's own figures. A policeman married to a part-time nurse will be worse off on the government's own figures, thanks to the carbon tax. A single-income family with a child—again on the government's own modelling—starts to be worse off from below average weekly earnings. And now we have the government's attack on the means test on the private health insurance rebate.

However, let me return to the bill at hand. There is a provision for nonentitlement to family tax benefit on an estimated income basis. This measure will prevent an individual and, where one exists, a partner from being entitled to family tax benefit part A and/or part B as fortnightly instalments on the basis of estimated income where the individual had no actual entitlement after underestimating their income for two consecutive years starting from 2009-10. As stipulated in the National Carer Strategy, the bill gives certain carer allowance recipients who care for a disabled adult access to bereavement payments on the death of the key receiver. A second measure from the National Carer Strategy will allow access to carer supplement for those carers whose rate of payment is reduced to nil because of income earned by them, or their partner, in the fortnight covering 1 July in any given year. The government claims this will help ensure the income support system does not act as a disincentive to carers working in paid employment. Other amendments are also made to family assistance law and social security law to clarify various provisions. Those amendments are of a minor technical nature.

The government have lost the trust of the Australian people of this country. We have a distrusted, desperate and, indeed, dysfunctional government in Australia. They stand condemned for their relentless attacks on families and their household budgets. This is just the latest example—an almost 10 per cent reduction in the baby bonus immediately, which is carried through by the pause in indexation. This directly affects the budgets of Australian families who are already facing higher living costs throughout this nation. I move a second reading amendment to the bill and commend it to the House:

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:

(1) notes that the Government has made the decision to pause indexation and reduce the Baby Bonus at a time when Australian families are facing increasing cost of living pressures; and

(2) calls on the Government to immediately acknowledge the serious impact that this bill will have on Australian families who will have their Baby Bonus payments reduced or eroded."

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Is the amendment seconded?

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

I second the amendment.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I stand to speak on the Family Assistance and Other Legislation Amendment Bill 2012. I am not surprised to hear the opposition take such a position when it comes to savings in the budget. Savings are something that good governments make, particularly when in many of these areas the increase in funding over the last four years has been so substantial. It is a normal part of good government to review funding from time to time and make adjustments as necessary. There are some savings measures in this budget and a good government does not walk away from the need to make those savings.

The first element of this bill involves immunisation requirements for children. Currently, families are required to have their children fully immunised in order to receive childcare benefit and childcare rebate. There are exemptions in place for families that wish to conscientiously object, and those exemptions will continue to apply. This amendment extends that approach of using government subsidies to encourage families to do the right thing by their children by requiring that families have their children fully immunised in order to receive family tax benefit part A end of year supplement. This mechanism will replace the existing supplement which is paid on immunisation at the ages of two and five. These new requirements will be implemented at one-year-of-age, two-years-of-age and five-years-of-age, meaning that there will be three checkpoints for families. There will be an incentive of more than $2,100 for families that ensure their children are fully immunised.

We have worked quite considerably on the health of children. In recent years, we have allocated $25.6 million for the Healthy Kids Check, which supports families who want their four-year-olds to get a health assessment through their GP. Between 1 July 2008 and 31 March 2011 there were about 126,800 health checks delivered, which means that about 16 per cent of Australia's population of four-year-olds have received a health check through this mechanism. Between 1 July 2008 and March last year about $7.8 million was paid in Medicare rebates under the Healthy Kids Check. This extension of the requirement that families have their children immunised in order to receive childcare benefit through family tax benefit part A should ensure that a greater proportion of our children are immunised. This is a substantial improvement in the system and part of a longer term plan to which this government is committed to increase the health of our children.

The second element of this amendment concerns the baby bonus for babies born on or after 1 September 2012. The rate of the baby bonus will be reset to $5,000 and indexation will be paused from 1 July 2012 to 1 July 2015. The government is a very strong supporter of the family payment system. We have introduced paid parental leave, we have increased the childcare rebate from 30 per cent to 50 per cent and, from 1 July, we will increase family payments for teenagers by up to $4,200 a year. Through the Paid Parental Leave scheme, eligible working parents are paid up to 18 weeks of government funded parental leave at around $590 a week before tax, and nearly 130,000 families are receiving paid parental leave. This amendment freezes the indexation of the baby bonus for a three-year period. It is a substantial saving, but it comes on top of around $20 billion of family payments the government will make this year. Another substantial part of this amendment covers the carer allowance and the carer supplement. Currently a carer will receive a bereavement allowance under those tragic circumstances when a child passes away, but they are not entitled to that allowance if they care for a disabled adult and that disabled adult passes away. It is a rather sad state of affairs at the moment: a child is your child, whether they are 12, 18, 30 or 50. This amendment extends the bereavement allowance to a carer whose adult child passes away. This is a very good amendment and one that should have been made a long time before today.

This amendment also acknowledges that carers play a significant role in the community and that sometimes they combine paid employment with their caring responsibilities. Currently a carer does not receive the annual carer supplement of $600 for each person they care for if they work for a part of the year and if, due to the income test, their income or their partner's income reduces the rate of payments to nil during that period. Caring for a person with a disability is a very complex role at any time. We all know that the needs of the one who is cared for may vary over time, as may the family's capacity to care. A carer may move in and out of the workforce around the capacity of other family members or around the needs of the one that they are caring for. It can happen that a carer can take part-time work for a period of time and then not work for a period. If there is any group in our society that needs the maximum amount of flexibility to make their life work it is this extraordinary group of people who care for people with disabilities.

This amendment does some things that are quite significant: it acknowledges the need for flexibility in the life of a carer and it helps to ensure the income support system does not act as a disincentive to carers who work in paid employment during an instalment period that includes 1 July. If the carer qualifies for a carer payment, wife pension, partner service pension or carer service pension, the carer supplement will still be paid even if their income, or their partner's income, rises above the allowable threshold due to part-time employment in that period. It sounds quite technical, but essentially it removes the disincentive for a carer who moves in and out of paid work to make the absolute best life they can. I am very pleased to see those two amendments relating particularly to carers. The first extends the bereavement payments to carers who tragically lose an adult child that they care for and the second increases flexibility for carers by allowing them to either work part time or for periods of time in the year without losing the carer supplement.

These important bills deal with savings. As I said at the beginning of my speech, this is not something we should walk away from. Governments have a responsibility to review their spending commitments, as we did this year at MYEFO in particular. They are important savings. They build on strong growth in our support for young children, our support for parents and our support for carers. I commend the bills to the House.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

I rise also to speak on the Family Assistance and Other Legislation Amendment Bill which is before us. This bill enacts a number of measures, but there are two in particular that I would like to speak on. The first is immunisation requirements and the second concerns the baby bonus. This bill, if enacted, will make family tax benefit A and B conditional on a child meeting the immunisation requirements. This is a good measure, which fits within a general principle that should be applied more broadly—that is, that family entitlements and welfare payments are not just rights; they also come with responsibilities.

We should also be looking more broadly at what other responsibilities should be attached to welfare payments. For too long, people have seen welfare payments as being a right which comes unencumbered, as free cash for individuals, rather than saying that this is something which the Australian taxpayer provides to those individuals and that those individuals have responsibilities in exchange for receiving that welfare assistance. That principle is being rolled out in some Indigenous communities across Australia as we speak. For example, in the communities of Cape York, which I know well, there are now four conditions attached to welfare payments. There are conditions around sending your child to school, around being free from police orders, around looking after your public house and there is also a fourth condition in relation to violence. I think they are good conditions. They fit within that broad principle and this measure in front of us fits within that principle as well.

Let me turn to the baby bonus, which is the other provision in this bill and which I would like to refer to. This measure will reduce the baby bonus to $5,000 and it will also remove any indexation of the baby bonus—that is, the bonus will be reducing in real terms from now on. I do not want to comment this afternoon on the merits of the baby bonus, nor do I stand here necessarily opposing this particular provision. But I would like to use the opportunity to point out that this measure is just another hit for young families, who are doing it particularly tough at the moment from a cost-of-living perspective. If this were the only measure that the Labor government was putting into place which would hurt young families then that would be one thing, but it is not. In fact, this measure comes on top of measure after measure which hit young families and increase the cost of living for them. I would like to go through some of those with you.

Members on this side of the chamber are fully aware that cost-of-living pressures for young families is one of the top issues. They raise it with us when we are in churches, at school fetes, at the local football grounds et cetera. Everyone is saying that the cost of living is going up well in excess of their wages and well in excess of the CPI. They point out that it is not the luxuries which are going up most rapidly. It is actually the bare essentials, such as electricity, water, education and child care, which are going up most rapidly, well in excess of their wages. If you look at the official statistics you will see that they bear out this anecdotal evidence which I certainly hear and other members on this side of the chamber also hear. Water, for example, has gone up 46 per cent since 2008. Electricity prices have gone up 50 per cent since 2008. Gas has gone up 30 per cent since 2008. Medical expenses have gone up 20 per cent since 2008. And I could go on.

There are many reasons why prices go up. Of course there are supply and demand issues which contribute to prices of everyday goods going up over time. But my critique of this government is that it is their policy settings which are having a significant contribution to increasing those prices for everyday Australians and everyday families. To start with, their macro policy setting is having an impact because, when you run an enormous budget deficit, as this government has been doing, that puts upward pressure on prices and upward pressure on interest rates. We now have had budget deficits of well over $50 billion in the last couple of years. This year it is forecast to be $37 billion, although what the final figure will be when we come to 30 June remains to be seen. We now have a net debt figure of $136 billion. This fiscal strategy of running a massive budget deficit, the biggest budget deficit in Australian political history, puts upward pressure on prices and interest rates, which makes it harder for young families. That is at the macro level.

Now let us look at the particular measures which make it more difficult for young families. Let us look at some of the particular policy measures. I have mentioned electricity prices before. Some of their 'inefficient' energy renewable schemes are contributing to the increase in electricity prices. But we all know what is coming, which they have put in place and which starts on 1 July of this year—and that is the carbon tax. That will increase electricity prices by 10 per cent in the first year alone according to the government's own figures. If you listen to the electricity suppliers they will tell you that they will go up by 20 per cent in the first year alone. And then the carbon tax is legislated to increase every single year thereafter. It is legislated to increase. So while we might be starting with a 10 or 20 per cent increase in electricity prices, it will then go up even more in subsequent years. Let us look at gas. Gas is another essential service which many parents are saying is going up. Gas prices are due to increase by nine per cent due to the carbon tax.

I have talked about child care in this chamber before. It is something which many young families need, particularly if both parents are attempting to work. This government last year put through measures which are forcing up childcare expenses for young families. A measure which they put through mandated that the ratio for childcare centres must be four children to one staff member rather than five to one, which it is currently. All that will do is increase the cost of child care. There is no research or evidence which says that is necessarily better for the children. Even if there were, why does the government have to intervene in this regard? Why can't parents and childcare centres themselves agree that five to one is okay. The Productivity Commission have looked into this particular issue and they are telling us that childcare prices will go up by 15 per cent due to this measure. That is often $50 or $60 per week for someone who is putting their child into care. I have a childcare centre in one of the poorer areas of my electorate where it has gone up by 21 per cent.

Health care is another area where the government's measures will mean prices will go up. Their changes to the private health insurance will put up the price of private health insurance across the board by 10 per cent, according to Deloitte, and higher for many families who are more directly impacted by the changes.

I talked about school costs before. With the Gonski review in place and the failure of the government to guarantee that they will maintain the indexation rate for school funding, that will mean that school funding may decline for many schools and that fees will have to go up—another hit for families who are struggling with cost-of-living pressures. I have talked about the macro level and I have talked about the individual initiatives which are putting up prices for everyday families. On top of that, it is reducing benefits. The member for Menzies went through some of the benefits which the government has targeted in recent years. They include the changes to family tax benefit parts A and B, which have been frozen for many families. In my electorate alone they affect about 10,000 households. There have also been tax increases. I believe that this government has put in place 21 tax increases since it was elected. We know about the alcopops tax, we know about the cigarettes tax and we know about the carbon tax, but there are even measures such as that getting rid of the entrepreneurs tax offset, which provided a little bit of tax relief for those individual entrepreneurs earning less than $75,000.

If you look across the board at what this government is doing to the cost of living for families, you will see that (a) it has not got its macro settings right, which puts upward pressure on all prices and on interest rates; (b) it is putting in place individual measures which in many cases are increasing costs for health, child care, electricity, gas and other things; (c) it is reducing benefits for families—the measure in front of us today is another one of those benefits which has been reduced; and (d) it is increasing taxes on things which people enjoy, such as cigarettes and booze and on small businesses that are struggling to make ends meet.

This government has scored the quadrella of hitting young families. The measure in front of us is just another one of those things which go towards making it more difficult for young families who are struggling with cost of living pressures today. We will not be opposing this bill, but it is worth pointing out that this government is making it tougher for young families. It needs to do exactly the reverse and make it easier for young families, to take the pressure off so that families can get on with things and improve their quality of life.

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Disability Reform) Share this | Link to this | Hansard source

I thank the House for its indication that it will be supporting this legislation. The bill implements the government's changes to family payments that were announced in the Mid-Year Economic and Fiscal Outlook. It also introduces the improved support for carers that was outlined in the government's National Carer Strategy.

Firstly, the bill delivers stronger incentives for parents to have their children immunised, by linking family tax benefit part A end-of-year supplement with immunisation, in place of the existing maternity immunisation allowance arrangements. Immunisation is fundamentally important to the health of a child throughout its life and to the health of other children in the community. The government wants to make sure that children have the best start in life and are immunised at the right time. From 1 July 2012 the family tax benefit part A end-of-year supplement, which is currently set at $726 a child each year, will only be paid once a child is fully immunised for the financial year a child turns one, two and five years of age. As a result, over the three immunisation checkpoints of one, two and five years of age, families will have an incentive of more than $2,100 to ensure that children are fully immunised. This initiative aims to improve immunisation coverage rates over time, giving greater protection to Australian children and continuing the government's reforms using family payments to help drive better outcomes for families and children.

Secondly, the bill will help make sure that the baby bonus, an important part of our targeted family payments system, is sustainable for the long term. Under the amendments, the indexation of the baby bonus will be paused for three years from 1 July 2012, and the payment rate will be reset to $5,000 per child from 1 September 2012. The baby bonus has increased by 67 per cent since it was introduced in 2004. This measure will provide a saving to the budget of $358 million over four years.

Thirdly, the bill will improve the targeting of family tax benefit and reduce the risk of debts by ending fortnightly family tax benefit instalments for recipients who claim family tax benefit but are found to have no actual entitlement for two consecutive years following the end-of-year reconciliation with their income tax return. Families will still be able to make a lump sum claim at the end of the financial year instead of receiving instalments. Exceptions will apply so that families are not put at risk of hardship.

Through the National Carer Strategy, announced on 3 August 2011, the government is committed to improving carers' opportunities to take part in all aspects of society, including the chance to participate in work, community and family life. This bill provides the legislative support for two elements of that commitment. One amendment addresses the situation of certain carers who combine paid employment with their caring responsibilities. These carers currently cannot receive the annual carer supplement, set at $600 a person that they care for, if, due to the income test, their or their partner's income has reduced their rate of payment to nil during a period that includes 1 July. This bill preserves a carer's entitlement to their carer supplement in that situation, and so reduces the disadvantage and uncertainty the carers or their partners who may be offered extra employment in the period that includes 1 July. A second amendment for carers will make sure that a low-income carer receiving income support payment as well as a carer allowance for care of an adult will be paid a bereavement payment on the death of the person they care for.

Once again, I thank the contributors to the debate this afternoon, and also thank the House in anticipation of the support it will provide to these important measures.

Peter Slipper (Speaker) Share this | Link to this | Hansard source

The immediate question is that the amendment moved by the member for Menzies be agreed to.

The question now is that this bill be now read a second time.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.