Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. The government has circulated amendments this morning. I understand that the government will move these amendments later on in the debate. Everyone should remember that it has been 18 months since the 2014 budget was handed down. For the last 18 months, we have heard each and every member of the Liberal-National government try to con Australian families that cuts to family payments are both, according to the Liberals, 'fair and necessary'. For 18 months Labor has stood side by side with families in the face of some of the harshest cuts to families ever attempted by any Australian government.

Last year, the first Liberal Prime Minister, Mr Abbott, tried to cut $8.5 billion from family tax benefits. Those $8.5 billion of cuts would have made it so much harder for families to receive the support they need to help with the costs of raising their children. Labor fought these cuts and we won. This year, in what the Liberals touted as a compromise, they tried again—this time with cuts of $4.8 billion. Eighteen months and two prime ministers later, it now appears that Labor have again defeated the harshest of these cuts. Today, families will be protected once again. Because of Labor's campaigning, because we have stood side by side with families, we have defeated these cuts. Single-parent families and grandparent carers have been spared and 1.6 million families and three million children have been spared the cuts that these two prime ministers, Mr Abbott and Mr Turnbull, wanted to impose on Australian families. They have been spared from cuts to their family tax benefit supplement and from cuts to family tax benefit part B.

Today the government are admitting they cannot get these cuts through the parliament. Australian families now want to know what this Liberal government are going to do next. Are they still committed to these cuts or will they be abandoning them forever? It is time today for this Turnbull government to come clean with Australian families. Next week is the last week of the parliament before Christmas. It is time for this Prime Minister to give families the certainty that they will not be faced with another round of cuts in 2016.

If these cuts had gone through, next year a single parent with two teenage children would have lost $4,700 or $97 a week when the impact of the cuts to family payments and the schoolkids bonus were combined—$1,806 in family tax benefit A and B end-of-year supplements, $1,712 as a result of the abolition of the schoolkids bonus and $1,785 in family tax benefit part B as the base payment was to be reduced to $1,000 a year. They would have gained just $525 from their fortnightly increase to family tax benefit part A, but this would have still meant that a family like this would have ended up a total of $4,700 a year worse off. That is what this Liberal government wanted to impose on families in this country.

Yet this Prime Minister, Mr Turnbull, said in an interview with The Guardian just last month after this legislation was introduced into the parliament:

Fairer is what is it all about. Fairness has got to be the key priority …

Mr Turnbull, in this legislation, wants to see single-parent families $4,700 a year worse off, yet this Prime Minister says fairness will be the key priority. On the Prime Minister's own criteria, his proposed changes to family tax benefits fail the fairness test.

Labor will not let these vulnerable families be ripped off by yet another Liberal Prime Minister's cuts. We understand just how damaging these cuts would be to Australian families. If the government is determined to go ahead with any of these cuts, it would mean 1.5 million families would lose their family tax benefit part A supplement. That is a cut of $725 a year for every single child. Around 500,000 of these families are on family incomes of less than $50,000 a year. There are 500,000 of these families and yet this government wants to slash their family tax benefits. Also, 1.3 million families would lose their family tax benefit part B supplement. That would be a cut of $354 a year per family. Single-parent families would lose both. In total, more than 1.6 million families would be left worse off. Three million children are set to lose the support their parents need. Is this what the Prime Minister meant when he said that fairness means the burden should be borne by those most able to pay? Is that what he meant?

These cuts would hurt families. They would hurt families just like the cuts to the government's paid parental leave scheme will. They would hurt families just like the cuts to the income support bonus will and just like the harsh cuts to young people will. The government wants to leave young people with nothing to live on for a month. These are harsh cuts that would hurt families.

Of course, the minister knows this. He knows that these cuts would hurt. That is why he has repeatedly refused to release the modelling that the department has done—they have admitted they have done it—on how these cuts would hurt families. Just yesterday the department again refused to release the modelling they had done on these cuts. Why is the government refusing to allow this modelling to be released? They know that it would show the impact on families of these cuts and that it would be devastating.

The minister wants to hide all that from the Australian people. What sort of government introduces these savage cuts and then refuses to tell the Australian people how much they will be hurt? It is this government—and it is not the first time that they have done it. Remember the 2014 budget, when the former Treasurer, now gone from this place—

Mr Frydenberg interjecting—

The member for Kooyong thinks the previous member for North Sydney was a good man. He was the person who wanted to take $8½ billion dollars out of the pockets of families, which, of course, the member for Kooyong voted for.

Mr Frydenberg interjecting—

Is that right? The member for Kooyong tries to say—

Mr Frydenberg interjecting—

As the government has now removed all of these cuts from the budget, the government has doubled the deficit. So we will not hear any more rubbish from the member for Kooyong!

The government says that we should cooperate with them more when these changes are in the interest of the nation. We have done that in some cases. Labor has already supported around $2 billion in changes to family tax benefits, so any argument that we are not up for sensible conversations about fair reforms is wrong. But we will not compromise on fairness. The substance of the measures in the original bill that we are debating today remains fundamentally unfair. Let me detail the particular measures contained in this 2015 budget bill.

There will be a cessation of the family tax benefit part B for dual parent families when their youngest child turns 13. There will be 136,000 single parents with children aged 13 to 16 who will have their family tax benefit part B reduced to $1,000 in 2016—a cut of around $1,700. Single parents with children aged over 16 will have their family tax benefit B cut entirely in 2016—a cut of more than $3,100. This cut will be a massive disincentive for young people to stay in school and will make life harder for those who do stay at school.

There will be a phase-out of family tax benefit A and B end-of-year supplements over two years. The family tax benefit A supplement will be reduced to $602.25 from 1 July 2016 and then to $302.95 from 1 July 2017—and abolished entirely from 1 July 2018. The family tax benefit B supplement will be reduced to $302.95 from 1 July 2016 and $153.30 from 1 July 2017 and abolished entirely from 1 July 2018. These measures are actually harsher than those in the 2014 budget.

There will also be an increase in the standard child rate of family tax benefit part A of $10 a fortnight. It is important to note that around 300,000 families will not receive this increase but will be affected by the cuts. A new rate of family tax benefit part B will be introduced for families with children under one. This last item is quite extraordinary. This decision was made as part of a bribe to the Nationals to shore up the new Prime Minister's leadership. So much for simplifying the family payments system! Do you remember the now Treasurer heralding the McClure welfare review as a blueprint for simplifying the welfare system? This legislation actually creates a new layer of family tax benefit part B and, as such, adds new complexity to the welfare system.

The government cannot say that we need to make big cuts to family tax benefits, while at the same time increasing spending to try to buy off the Nationals. The country cannot afford to be spending money on Liberal-National Party deals. Labor will not support the government's proposed increase to family tax benefit part B for families with children under one, and that will save the budget around $380 million.

We should not forget where these cuts to family tax benefits started. It was in that 2014 budget of broken promises. On budget night 2014 we heard how this Liberal government wanted to make families $6,000 a year worse off. We heard the then Treasurer lecture us all about lifters and leaners. Labor immediately came out and said we would oppose these cuts to families—cuts that would have seen a single income family on $65,000 a year around $6,000 a year worse off. That is what every one of them over there voted for.

These cuts included the plan to remove family tax benefit part B from families when their youngest child turned six and the abolition of the schoolkids bonus—a cut of $842 for every secondary school student and a cut of $422 for every primary school student. The 2014 budget also included freezes to family tax benefit rates and thresholds. It was Labor that stood in the way of these cuts. Unfortunately, we were not able to stop the cuts to the schoolkids bonus, but we are very pleased to have secured a win for families by forcing the government to back down on the freeze to family tax benefit rates and thresholds.

The government has admitted they dropped these changes not because they thought it was the right thing to do but because they could not get them through the Senate. They did not drop these out of the goodness of their heart; they dropped them because of the political pressure exerted by the Australian Labor Party and the crossbench in the Senate. Because of this incompetent Liberal government that is completely bereft of any understanding of fairness, these new measures are no better; as I have just mentioned, some of them, in fact, are harsher.

I want to share some stories from individual people who have contacted me detailing how these cuts would affect them. Let us hear from the people who will be hurt by these cuts if the government decides to proceed: grandparent carers, single-parent families, low- and middle-income families struggling to make ends meet—people like Marleen Lamb. Marleen is a grandparent carer in the electorate of Petrie who has cared for her 12-year-old granddaughter since she was four years old, due to tragic circumstances. Marleen wrote to me asking:

How the hell will I manage if I lose $100 a fortnight because of this government's cuts to Family Tax Benefit Part B?

Of course, this government's heartless response to the concerns that Labor raised about grandparent carers was, 'Go out and get a job.' It said these cuts are designed to encourage workforce participation.

Mr Frydenberg interjecting—

That was the message. That was the attitude of this Liberal government, the out-of-touch Minister for Social Services and the out-of-touch Minister for Resources, Energy and Northern Australia at the table. We had the Minister for Social Services train wreck interview on Sky, when he was asked whether a grandparent carer with a 15-year-old child in their care would be $2,500 a year worse off. The minister said:

Well, that depends on their capacity to access childcare and re-enter the workforce.

Labor questioned the minister about this answer the following day in question time, and he gave a similar response. Within minutes of the Minister for Social Services putting forward this argument in the House of Representatives, Rita Beckman, a grandparent from Queensland, emailed me saying:

I am a single aged pensioner and I am the legal guardian for my 10 year old granddaughter. She has been in my care since she was 5 years of age. I am now 75 years old and am slowly being crippled with osteoarthritis and have problems with my balance.

I notice that the minister at the table is now studiously avoiding the point. Rita went on:

I will be 78 when she turns 13 and 81 when she turns 16. I do not wish to seem complaining as I love having this little girl in my life but for goodness sake how can anyone possibly think an employer would take me on. The arrogance of the Minister for Social Services is breathtaking.

Does the Minister for Social Services still think that grandparent carers should just go out and find a job?

What does the Minister to say to someone like Emma Marks, a single parent from the electorate of Flinders in Victoria? Emma works three days a week at a local hardware store. She writes:

I am a single mum and my daughter's father is, unfortunately, one of the many men who make up our tragic suicide statistics—I certainly never chose to be a single parent.

Emma fears that when her child turns 13 and she loses access to family tax benefit part B she will be pushed to the brink of homelessness. She writes:

Please do not take away from the most vulnerable members of our society what little we have that helps us to keep our heads above water.

These are real people—Marleen, Rita and Emma—real families. They are not numbers. They are not talking points. They are real people for whom these cuts would have very real consequences—real consequences for their incomes, real consequences for their standard of living and, most importantly, real consequences for the wellbeing of their children.

These new cuts to family tax benefits have rightly been condemned by key stakeholder groups such as the Australian Council of Social Service, The Parenthood and Catholic Social Services Australia. In assessing the package, Cassandra Goldie from ACOSS stated:

On our numbers a low income single parent family with 2 children will take a hit of more than $60 per week … once their youngest child turns 13, due to the reduction in Part B and the withdrawal of end of year supplements. We cannot support this.

Jo Briskey from The Parenthood has also condemned the new families package stating:

It is simply unfair of the Turnbull government to expect families who depend on FTB payments to be the ones to front the cash to fund the changes so desperately needed in childcare.

And it's clear that sole-parent families will be the ones hardest hit …

Marcelle Mogg from Catholic Social Services Australia stated:

It is not in the interests of Australian families or the Australian economy to expect low income families to do the heavy lifting when it comes to economic reform.

But that, sadly, is exactly what this Liberal government wants to do—forcing low and middle income families to do the heavy lifting. It is not right, and it is certainly not fair.

Of course, Labor welcomes the government's decision today to remove the harshest of these measures from the legislation, and, when the minister moves these amendments, we will not stand in the way of the amended bill passing the House. But the government needs to make very clear what its intention is. Is it going to proceed with these cuts in a new bill or will it abandon them? It must make this clear today. Let families go into the Christmas period knowing that they will not have to spend 2016 with the same shadow hanging over them as they have had in 2014 and 2015. It is time for the government to drop these cuts, take them out of the budget and rule out further attacks on low income families.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It is always a pleasure to rise in this place and speak in support of the wonderful families in our community of Forde. Just to touch on a couple of points that the shadow minister raised in her contribution to this debate, it is my understanding that the supplements were introduced as a measure to offset fluctuations in pay or reporting of pay cycles so that, at the end of each financial year, families and individuals did not finish up with a large debt, because of overpayment et cetera. As I have said previously in this House, those on that side are very good at rewriting history or gilding the lily in debates. Let us not be under the illusion that the supplements are there as a foundational principle of the family tax benefit regime. They were put in place for a very specific purpose.

The shadow minister also talked about having done deals, or legislation being done for deals, between the Liberal Party and the National Party, as part of the coalition, and the impact that has on the country. I would like to remind the shadow minister, in her absence, that in 2010 it was apparently okay for the country for Labor and Greens to do deals. They were far more disastrous not only for the country as a whole but also for families across Australia, when they were in government. That is a bit of hypocrisy, but we are getting used to that from those on the other side.

On the notion of fairness, the shadow minister seems to think it is fair for future generations to pay future bills when the socialists on that side of the chamber ran out of other people's money to pay the bills and let future generations pay the bills for their profligate spending today. On those couple of points, I wonder if it is worth those on the other side reflecting on.

It is important that we as a government do listen and do take the time to understand what the issues are that we are facing, and have a look and work through what we can reasonably put through this House. In that regard, I stand today in support of the Social Services Legislation Amendment Bill 2015. This legislation will reform and restructure the family tax benefit to give families a greater capacity to fund child care for their children, which is critically important. In the six years that those opposite were in government we saw childcare fees skyrocket by some 53 per cent, hitting the family hip pockets where it hurts most.

In contrast, the coalition government is investing an additional $3.5 billion through the Jobs for Families package, which on average will leave more than 1.2 million families $30 a week better off. Unlike the previous Labor government, the coalition wants to help families find affordable child care. This is an incredibly important measure that will help parents return to the workforce.

The Social Services Legislation Amendment Bill 2015 includes a number of important measures, particularly around family tax benefit B, which is the primary one that will be going through when the minister tables the amendments later on. In my electorate of Forde, there are currently some 15,500 families who receive family tax benefit A parent payment for a child. These families are part of the 1.2 million families in Australia who will continue to receive the support they need for their families.

In today's society, more affordable, flexible and accessible childcare system is essential, as we see many families making the decision for both parents to work. This government understands the importance of providing a quality childcare system, and I am proud to be able to tell families in the electorate of Forde that we are taking care of their childcare needs.

The overall effect of this legislation is to continue providing day-to-day financial assistance to low income families, and importantly provide families with more choice—more choice for those who wish to return to work and more choice for parents who stay at home with their children. Being a parent is tough. It is an amazing experience to raise a child, and having a good support network around you can make a tremendous difference. Our government is committed to being part of that support network by ensuring the family and childcare systems remain sustainable and effective in the long term, to provide for future generations.

In my electorate of Forde, 13,000 families receive a family tax benefit B payment. From 1 July 2016, the family tax benefit B will be reformed, so couple families eligible for family tax benefit B will receive the payment while their youngest child is aged under 13 years—increasing from the previous budget measure, which reduced the eligibility to age six. Single parent families and grandparent carers will not be disadvantaged from these changes.

These new family tax benefit measures will not only help fund the new Child Care Subsidy and measures to improve the cost, accessibility and flexibility of child care but it will also ensure low income families on a maximum rate of family tax benefit A will continue to receive assistance. Most families will continue to receive family tax benefit B until their youngest child enters secondary schooling.

While Labor criticises these important reforms, we will be using these savings to fund the Jobs for Families package. The government will continue to assist families in raising their children, over the long-term. Our childcare reforms encourage greater workforce participation, including those 165,000 families who have told us that they want to go back to work or do more hours but are restricted by the current childcare arrangements. We are providing better targeted support to those who need it most, so that we can begin some of the budget repair work on the mess left behind by Labor.

The measures in the Social Services Legislation Amendment Bill 2015 will provide vital support to Australian families who need it most, while creating important savings that will fund much needed improvements to our childcare system. I commend the bill to the House.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I must confess I have a bit of a soft spot for the member for Forde, but that has to be the weirdest speech he has ever made since coming into this place.

I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. The member for Forde has just confirmed that the cuts remain, that the cuts continue. Despite the fact that those opposite pulled most of the egregious stuff out of this legislation and they will do it by amendment, the member for Forde has just confirmed the cuts are not dead, buried and cremated; they are actually there. When MYEFO is handed down in the next few weeks we will see whether the cuts will be in their budget. Of course, they will be, because they have not ruled out bringing legislation back into this chamber containing cuts, making it tougher on families to survive financially.

Today we heard the member for Forde commending the government, saying they are doing a trade-off, with what seems to be a bit of a mythical package on childcare measures. We have not seen it yet. There is a false dichotomy. He is talking about childcare arrangements for teenagers, for 14-, 15- and 16-year-olds. In my electorate of Blair, in South-East Queensland, I do not normally see 15-, 16- and 17-year-olds in childcare facilities at Leichhardt One Mile Community Centre, or at Ipswich Family Day Care in One Mile. It is a false dichotomy, a false trade-off that these people are perpetrating and perpetuating in their allegations.

The member for Forde said, 'We want to give people more choice.' How are they giving them more choice by cutting family payments to make it tougher on them? He says, 'We know that being a parent is tough.' Well, the government wants to make a tougher and harder for families. He talks about a childcare subsidy that they are going to bring in. What additional childcare subsidy is he talking about? I am not aware that they have actually released any measure. We see it all the time, with the Minister for Social Services constantly talking about the childcare package they are bringing in. Well, release it. Show us it. Give us the details about it. How are they going to help families? The legislation before the chamber today is not about helping families.

I remind those opposite and people who may be listening that on 5 November the now Prime Minister went to the Melbourne Institute's Economic and Social Outlook Conference in the Victorian capital. The conference is billed as Australia's premier public policy event, and it certainly attracts some pretty big names. It is a big stage, and the Prime Minister was there to talk up his government's plans. As usual, he used many fine words. I think he used the word 'agility' three times and 'innovation' nine times, saying 'it will encourage us to be innovative'. He cited both the 'culture of agility' and the 'culture of innovation', risking a culture war between his two favourite words. He even slipped in a three-word slogan occasionally, channelling the member for Warringah—'work, save and invest'—just for old time's sake. But when he talked about reform, he talked about fairness. He said:

Fairness is absolutely critical. Any package of reforms which is not and is not seen as fair will not and cannot achieve the public support without which it simply will not succeed.

The legislation before the chamber will not succeed. Why? Because, like the over $8 billion in cuts to families in the 2014 budget, Labor has stood steadfast against cuts which will hurt families. We stood against those cuts in the 2014 budget, we stood against those cuts in the 2015 budget and we stand against the cuts in this legislation before the chamber today.

The only reason the coalition are bringing in amending legislation to temporarily withdraw—we know they are going to bring it back; the member for Forde said so today—the egregious and outrageous aspect of the cuts is that Labor stood firm, with the support of the crossbenchers. In the last two years, we have constantly stood up for families while this government has sacrificed a Prime Minister and a Treasurer on the altar of their attack on families. The former member for North Sydney and the Prime Minister would still be here today, I dare say, but for the attack on pensioners, on grandparents who are looking after their grandchildren and doing noble and wonderful work and on families who are struggling. But this government continues to perpetrate and perpetuate the myth that they have this childcare package—which we have not seen—which will help families.

I note also that the crazy brave member for Forde is the only marginal seat member speaking on this legislation for the government. Why haven't they got a long list of people? They know very well that this legislation is all about an attack on families. Why aren't the members for marginal seats—like Dobell, Robertson, Solomon, Petrie, Capricornia—speaking on this legislation today? They know this legislation is about an attack on families, on family income and on the capacity of families to provide for the cost of school, electricity and fresh food.

This is a government which has a tax conversation about a 15 per cent GST on fresh food and other expenses to make it hard to families. They are going to attack with a potential increased tax, which they talk about all the time. They are the ones who raise the tax conversation, not us. They are the ones who talk about it. Their backbenchers talk about it. Here today, with legislation before the chamber which they will not say they will not reintroduce, they are attacking families.

In my electorate of Blair in South-East Queensland, based on the Ipswich and Somerset region, there are 14,715 recipients of family tax benefit part A. The bill before the chamber would have seen them lose all their family tax benefit annual supplement from 2018—a $726 cut per child. That is 14,715 people in my electorate losing all of their annual supplement—$726 per child. These families in my electorate are part of more than 1.5 million families which will lose their supplement. Around 600,000 of these are single parent families—single parent families who we should be supporting, not punishing. About half a million of these families are on the maximum rate of FTB, meaning their combined family income is less than $51,000 a year. Talk about an attack on the poorest, most vulnerable and most pressured people in our community.

As at June this year there were 13,041 recipients of family tax benefit part B in the Blair electorate. This bill will see them lose all their annual FTB part B supplement from 2018, a cut of $354 per family. There are 13,041 recipients in my electorate. These are some of the 1.3 million nationally who will lose this supplement. Families rely on these annual supplements when they are stretched to meet their budgets, to pay their school costs, to repair their cars and perhaps even to go on a holiday, if they can afford it. The explanatory memorandum in relation to this bill states that abolishing these two supplements will save $4.06 billion over the forward estimates.

This is a government which says it wants to simplify the family tax system. It says social security needs to be simplified and is forever wanting to attack welfare cheats. We are in favour of people who need social security getting it and we are in favour of clamping down on those people who do not need it and do not deserve it, who rip off the system. We are in favour of that. It is unacceptable for people who pay their taxes, who contribute to the economy and the community, to be ripped off, and for the government as well to be ripped off, by people who cheat the system. We are in favour of clamping down on that. But what the government is doing here is making the whole system more complex and more difficult.

Let's talk about the 15- and 16-year-olds who the government thinks are in child care and who there will be trade-offs for. The bill will cease family tax benefit part B payments to 76,000 two-parent families when the youngest child turns 13. It is a cut of more than $3,100 each year for the families. From 2016, 136,000 single-parent families with children aged 13 to 16 will have their family tax benefit part B payments reduced from $1,700 to $1,000. This cut will affect 3,900 grandparent carers of children aged 13 to 16. In 2016, if this bill is passed, these grandparents will also have their support reduced from $1,700 to $1,000. The government will cut family tax benefit part B payments to all single parents with children aged over 16 years, and that is a cut of $3,100. The explanatory memorandum to the bill states that these changes to family tax benefit part B will save $1.35 billion over the forward estimates.

But let's have a look at other aspects of what this government is doing. There is a curious measure in this bill which is full of cuts. There is a new rate of family tax benefit part B payment to families with children under one. This will see 140,000 families with newborns receive $1,000 extra in their family tax benefit payments, at a cost of $380 million to the budget. This is the government that cried that there was a 'debt and deficit disaster' when in opposition, a government which doubled the deficit and increased the debt by over $100 billion. Here they are, saying they can afford another $380 million to the budget. Guess what that was. It was part of an arrangement put in place in less than 24 hours when the current Prime Minister turfed out the then Prime Minister, the member for Warringah. You may recall it was part of a deal he did with the National Party to change the coalition arrangements. He supposedly made the member for New England responsible for water policy, although the shadow minister here, the member for Hunter, has pointed out the oddities of those ministerial arrangements. He was also supposed to be in charge of the Murray-Darling Basin Authority.

The same deal, according to the National Party—a sop, a pay-off to the National Party—included a commitment from the current Prime Minister, the member for Wentworth, to take the coalition's already announced emissions trading targets to the United Nations climate change conference later this year. So he took a whole bunch of stuff that was part of the National Party's commitment and dear to their hearts and coalition policy and said: 'I'm not going to change it. I'll be the same type of Prime Minister as Mr Abbott, the member for Warringah.' So this $380 million is a sop to the National Party. As the Sydney Morning Herald reported on 16 September 2015, one unnamed National Party MP claimed that Prime Minister Turnbull had effectively 'agreed to everything'. It leaves a very bad taste in the mouth—Australians knowing that this $380 million to increase payments to families with newborns is about politics and not about policy at all. It is hypocrisy writ large.

We reject the coalition's reckless urge to spend this $380 million. Again, this demonstrates our commitment, as we have done in the last two years, to sensible savings measures. As the member for Jagajaga has pointed out, there is $2 billion there. We have also supported $20 billion in savings proposed by the government, and in the last week or so we supported another government bill that amended a range of tax laws and other laws, saving $1.4 billion. We have committed ourselves to sensible agreements and sensible arrangements when the government has put them forward. We as an opposition have agreed many times with what the government has done. In my shadow portfolio areas of Indigenous affairs and ageing, there have been many government proposals by way of legislation, guidelines and regulation that we have agreed to. We have disagreed on a number of occasions, but we will commit ourselves to sensible savings and we will stand up for families.

One thing about the Labor Party that has been quite evident in the last two years is that our standing up for families has resulted in the turfing out of a Prime Minister and the eradication of a Treasurer from this chamber with the loss of his job. That and the changes to many ministerial positions have been a result of Labor standing up for families. We know, and in their heart of hearts those opposite know, that this legislation before the chamber is all about an attack on families. They cannot claim they are a party that supports families and family values if their idea of supporting family values is to cut the financial support families need. It is a false statement, and once again it is the Labor Party that is standing up for family values and the economic security of those families, as demonstrated by the values we have shown in the last two years. Those opposite have not stood up for families. They have not stood up for the things that enable families to meet their budgets and the values that they hold dear, and they should hang their heads in shame.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. Our social services system is unfortunately a maze of overlapping schemes and measures which all deliver taxpayer funds to eligible recipients. It is a complex and convoluted system which sadly grew out of control under the stewardship of those opposite. The social services space is one which requires a responsible and reasonable approach. Fairness is something I think we all agree is characteristic of the Australian way of life, but fairness cuts both ways. Whilst we must ensure we have a fair social security system, we must also ensure we give taxpayers a fair go when it comes to the expenditure of their hard-earned taxes.

Australia's welfare system is one of the most comprehensive, and one of the most generous, in the world with an annual expenditure of some $145 billion, or 35 per cent of our overall expenditure. Assistance to elderly Australians came at a cost to the taxpayer of $50 billion in 2012-13, assistance to people with disabilities came in at $24 billion, assistance to the unemployed and the sick was $8.5 billion and we spent some $7 billion assisting veterans and their dependents. When it comes to assistance to families, with which this bill is directly concerned, the nation spent some 27 per cent of our social welfare expenditure on those measures, which included family tax benefit, parenting payment and child-care assistance programs, at a total cost of some $35 billion. Clearly our social security system costs a significant amount of money to run. It is a reality all governments have to face up to.

Another reality is that between 2002-03 and 2012-13 social security and welfare spending grew by a whopping 43 per cent, or 3.7 per cent annually. This exceeded corresponding GDP growth of 34 per cent over the same period. Whilst there was a significant spike around 2008-09, due principally to some of the stimulus measures taken under the previous government, the trend is clear and the trend is up. Under the Rudd government's fiscal stimulus in the form of one-off payments to households, some $20 billion was expended in 2008-09 alone. In fact we saw the social welfare spend in 2008-09 double that of the previous year. What an alarming spend that was. We saw our hard-earned fiscal stockpiles delivered inefficiently and ineffectively across the board. We can all remember the $900 cheques that fuelled little more than a mini exporters' boom for whitegoods out of Asia.

We have failed to make sustainable changes to our social welfare systems and it has fallen to this government, a coalition government, to make the responsible decisions. We have allowed our social welfare system to grow faster than our economy consistently over the past decade. The reality is this sort of growth in our social welfare spend is unsustainable, it is untenable and it is downright unfair. On top of the structural issues we face, we have seen evidence today that some $5 billion of taxpayer funds may have been rorted from our welfare system. The reality is a simpler system is far more easily monitored. The current system is too complex and too convoluted and it lends itself to rorts. Not only is it immoral for Australian citizens to abuse our welfare system but also it is unconscionable that we allow ourselves to take from our children by allowing these structural deficiencies to be maintained. If we allow social welfare spending to outstrip economic performance we are committing a grave injustice on our children and our grandchildren. We must live within our means. That does not mean we cut unnecessarily, nor does it mean we disproportionately hurt those in need. But we must ensure that any additional expenditure is matched by commensurate savings.

We must make our system fairer and simpler, more efficient and more effective, and ultimately more sustainable. We must remove waste and use each and every dollar more wisely and in a more targeted manner. That is why the structural reform delivered in this bill is so important. It is not the complete solution but it is part of it. It is recklessly irresponsible to continue to promise more and more welfare spending without regard for the economic realities confronting our nation, as seems to be the approach of those opposite. We should not look at our social welfare system as anything other than a system that is intended to project recipients into work.

One of the biggest frustrations of the social security system, as expressed eloquently in a report by Patrick McClure entitled A new system for better employment and social outcomes, is that there are far too many payments and allied supplements. Comprehensive? Yes. Complex? No. The intent of a social welfare system is fundamentally to deliver assistance to those who are in need, to maximise opportunity and to unlock the full potential of our citizenry. That is a thoroughly liberal goal and I for one am proud to pursue that agenda. Yet increasingly it has become evident that the system itself is standing in the way of better outcomes for our welfare recipients—it is thoroughly counterproductive and costly to the taxpayer. This bill seeks to go some way towards remedying this problem.

Currently there are some 20 main payment types and 53 existing supplements. There were, of course, 55 but the government has already removed the senior and low-income supplements. We must continue to assist families in raising their children over the long term because it is only through strong families and through delivering opportunity to our children that we will ultimately succeed as a nation. We must fund the necessary childcare reforms this government has designed, thus enabling and encouraging greater workforce participation and national productivity. We know that funding the child care-reforms will encourage higher workforce participation. We have seen some 165,000 families tell us that they would benefit from these reforms.

It is only though a strong childcare system that we can best maximise workforce participation and strengthen families and the economy more generally. Concurrently, we must continue to simplify our social welfare system more broadly and the FTB more specifically, consistent with the recommendations of the McClure review, which highlights the unworkability of a system that maintains 20 main payment types within excess of 50 categorised supplements.

This government is making progress towards a sustainable social welfare system. This bill delivers on our ever-present commitment to the Australian taxpayer to expend their precious taxpayer funds in the most efficient and effective manner possible. We are making the system more efficient, more effective and, most importantly, more sustainable. We cannot afford to falter in our pursuit of that goal. If our children and our grandchildren are to enjoy the quality of life that we do, then we must ensure that we live within our means. We must commit to unlocking the potential of all Australians through our generous social welfare net, which, of course, is a critical component of that aspiration.

It is true that, due to the recalcitrance of those opposite, we have had to amend this bill and strip some measures from it. That stubbornness has been the norm, disappointingly, for those opposite since I came to this place. It is a shame that they have played politics once again with our social welfare system and its sustainability. A system which has, as they know, grown uncontrollably through measures enacted by them in government.

This government, in the face of obstructionism from those opposite—including my good friend the member for Hunter, who is in the chamber this morning—remains committed to a social welfare system that is comprehensive, sustainable, effective and affordable, and this bill is part of that endeavour. This bill is one step on the road to a fiscally-responsible budget position. Another mile on that road which, sadly it would seem, the coalition government will be walking alone. I commend the bill to the House.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I rise to join this debate on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. We have heard this morning that the government has removed from the family payments bill all the measures that Labor opposed. And we have heard from those opposite, and we have just heard, that this is perceived by those opposite as demonstrating that we on this side of the House are recalcitrant and stubborn—I wear both with pride in this chamber today. We have heard that we have been playing politics with the social security net—we are not playing politics; these are people's lives.

My stubbornness in the face of the changes those opposite sought to bring to the family tax benefit regime are motivated by care for my community and the 21,000 families in my community who were set to lose up to just under $5,000 a year and for what that would mean for our local economy with the cumulative impacts as that came through. So, far from being obstructionist, we on this side have stood up for our communities and stood up for families across this country. We stood up for families in Lalor, in Chifley and in Holt, and we stood up for families across the Hunter, and we are proud to have done so.

The only measure that now remains in this bill is one that Labor does not oppose. Today this government has admitted that, because of our hard work, they cannot get these changes through the parliament. We have stood shoulder to shoulder with families since the night of 2014 budget to tell this government and to tell those opposite, as clearly as we could, that fairness matters in this country, that trickle-down economics will not bring us prosperity, and that changing the way this country operates, increasing inequity, will not bring us the better future we all want.

I have said many times in this chamber that when it comes to these changes the community in the electorate of Lalor would be the hardest hit. I have said many times that it is not because people in Lalor are not working—these changes were going to hit hard-working families on combined incomes of $56,000 a year. These changes were not aimed specifically at people to get them to work. Most of the people this change would have impacted on in Lalor are working families. I think getting this straight in the chamber and through the media has been some of the best work that my colleagues and I have done since the 2014 budget.

The first Liberal Prime Minister tried to cut $8.5 billion from family tax benefits in the 2014 budget. Then, this year, in what they touted as a compromise, they tried again, this time with $4.8 billion worth of cuts, and they tied it to changes to early child care and education.

Of course, we all know that the word education has gone missing in all of the rhetoric on that side around any kind of child care arrangements, but on this side it is still important because in electorates like mine it is the education element of early child care and education that is so critical to future prosperity. It is early education and people's access to it that is going to make a significant difference in electorates like mine. Tying the two together—a favourite trick that we have seen several times—was a way of obfuscating what they were actually trying to do, obfuscating the impact it was actually going to have on families and on economies across the country. The tens of thousands of people in my electorate that were set to lose thousands of dollars did not see this second tranche as a compromise. They saw it as a continuation of the first attack. They saw it for what it was.

Labor fought those cuts, and today we can stand here proudly and say that we have protected families across this country. Because of our campaigning, because we worked side-by-side with those families, those cuts are now not before this chamber. Eighteen months and two prime ministers later, it appears that Labor have defeated the harshest of these cuts.

As I said, I represent hardworking, low-income families, and the up to $4,700 less that there could have been in the budgets of 21,000 families in my electorate would have had an extraordinary impact. That is a third of the families that live in a community of over 200,000—a third of the families. We on this side of the chamber understand that those measures were an attack on families across mainstream Australia. They were wrapped in rhetoric about fairness, and we have asked a thousand times: fair to whom? To those in the most vulnerable position?

Those opposite continue to talk about fairness. I heard it today on my way to the chamber. Being 'fair to taxpayers' is how it is phrased. In this country we have a goods and services tax: we are all taxpayers. Everyone is making a contribution to the taxation system in this country. I find it offensive when people try and separate those who are receiving support while they are raising their families and working hard, and those who are taxpayers. We are all taxpayers.

Today we are talking about a win for Labor, really, in getting this legislation amended. Single-parent families and grandparent carers have been spared. Across the country, 1.6 million families and three million children have been spared. They have been spared from cuts to their family tax benefit supplements, cuts to family tax benefit B. Unfortunately, I cannot say that everything has been saved, because the schoolkids bonus cuts are still there, waiting to come into the system, and we still do not know what is happening around early childhood education and care. We still do not have clarity about what this government intends to do in that space. But the schoolkids bonus will go in the middle of next year, and this will be felt by families with children heading to school in 2017. For Lalor, the total amount of schoolkids bonus paid to local families is $17 million. That is $17 million that will not be spent in our local economy. So there are still hard things for people to face. This will still hit families hard.

So, while we are discussing this legislation, I call on Prime Minister Turnbull and the Minister for Social Services to come clean on what their future plans for families are. Are you still committed to those measures? It is not too late. You could still reverse that, continue with the schoolkids bonus. You could still do that. And will this be the end of it, or will we see these come back in another budget? If the government is committed to these cuts further down the track, then families deserve to know. It is time this government came clean with families—completely clean—on what its intentions are.

We have been having this conversation over the last few weeks in this place. In my electorate, the conversation we have been having is about our local economy. We have been in a two-year conversation about the measures in the 2014 budget and whether they are gone or whether they will come back in another form. We are still waiting for the failed GP tax to come through in the indexation freeze; we are still watching that work its way through the system and measuring the impact that that is having on our local economy.

The rhetoric that this government uses around 'lifters' and 'leaners' is another thing that needs to be discussed in this place. I have an email with me that I received during question time a few weeks ago, after the family tax benefit cuts became clear, and I think it sums up the impact of these cuts to people. It reads:

Dear Ms Ryan

Firstly, I am a single parent of 2 teenagers 15 and 13. Secondly I study a course full time, work 2 part time jobs and also studying another course part time. I volunteer at church and struggle to make ends meet.

I rely on my family and friends to assist with driving my children around to school and various activities.

I also got caught in the last lot of activity changes by the government and in the last 3 months have applied for over 150 jobs and wasted numerous hours sitting in my job agency. I have no idea how I can fit anything else in my life, yet am easily targeted as a welfare bludger. I am baffled by how out of touch Mr Porter and the government is about single parent families.

It is highly offensive, that the government continually targets single parents as easy target. The society assumption that single parents don't want to work and sit and watch soapies all day is continually being perpetuated by the government.

I for one would so love not to receive any money from the government, however in reality there is one of me.

My fear is that in 10-15 years I will be totally burnt out and not able to do anything at all. (I might add I have private health insurance). What good will I be to society then? Ask it is my children are already saying they hardly see me, the guilt I feel leaving them home alone while I work is hard, but what other options I have. With school fees at a public school costing over $1k each and the government taking away the school kids bonus and now trying to take another $2.5k a year off me. The future is bleak.

I say today to the person who sent me that email that I proudly stand here as a member of an effective opposition holding this government to account. I proudly stand here as a member of an effective opposition, led in the area of families and social services by the member for Jagajaga. I am proud to stand here and thank her for her email because it is emails like this that make it easy to get up every day and do what needs to be done in this job—to come into this chamber and defend families across this country. It is emails like this that remind everyone in this chamber who it is we are talking about. These are not numbers. This is not about playing politics. This is about people's lives. It is really important that those opposite come to understand the nature and shape of electorates like mine. They are the epitome of mainstream Australia: families working hard every day to raise their children. The family tax benefits are about supporting those families to ensure that they can get the things they need while they raise their children. It is incumbent on every member of this place to understand that, when they sit in committee hearings and look at numbers, at the end of those numbers are families—people working hard every day to ensure a future for their children. It is about families who are looking to us to provide the levers that are going to ensure that their children get the education they need, the skills they need and the agility of mind they need. It is incumbent on us in this place to be agile of mind, but it is also incumbent upon us to be empathetic and to seek to understand how people on the ground live their lives.

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

I, too, rise today to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. It is marvellous how you can get a debate in this place when everyone is actually agreeing on a bill. Anyway, that is the nature of what happens here. I have been listening to some of the contributions from members of the opposition this morning. I was in my office, tolerating the member for Blair's contribution in the background. He was suggesting that the members of the National Party should have no influence on what policy comes into this place and that anything that is of benefit to the people that they represent is somehow a sop to the parliament. I might just remind the member for Blair that the 'scandalous indulgences' that we agreed upon, with the change of Prime Minister, were such shocking things as a commitment to help students get tertiary education, a railway line from Melbourne to Brisbane, more funds for parents who want to stay at home with their children in their first year of life and a telecommunications fund so that people actually had a phone that worked—all those scandalous things that those in the National Party seem to think the Australian people have the hide to actually expect that they should have and which the electorates that they represent take for granted. So I have had about enough of the lectures from the Labor Party on empathy and fairness this morning.

I admire the member for Lalor's contribution and her commitment to the people in her electorate, but we should not forget the underlying reason that this legislation was brought in in the first place—and, quite frankly, a lot of the original changes in it were taken out, and, today, we have the proposed legislation that both sides of the House agree on. It was not so that the coalition could be complete and utter mongrels and create harm, pestilence and unwellness for people in Australia. It was all about conserving our future. The member for Lalor gave a good example of a young mum with two kids and the importance of the schoolkids bonus. But it is important to note that the schoolkids bonus is money that is borrowed from overseas. We are borrowing money to pay the interest on last year's schoolkids bonus and the one from the year before. We are still paying that off and the interest—and the $900 cash handouts that Kevin Rudd put out willy-nilly. One of the RSL clubs in my town had a $50,000 bonus put through the pokies that week. All those things are on borrowed money. If we had money in the bank, we could afford to be more generous to the Australian people. But this is a time in our history where we need to reset our country so that we are sustainable. The greatest disservice we could do to those two boys that the member for Lalor spoke about would be to impact on their future so that, as adults, they were still paying for the programs that we put in place and that they had no say in. We need to come back to a point where we are sustainable. You could mount an argument that nearly every dollar spent by the government is worthwhile, but we never hear from the Labor Party how they are ever going to pay for anything. It is the magic pudding that seems to keep on giving that they can afford to be so generous with. But we need to make some adjustments, and we are now at a point where I think nearly half of our population are actually net noncontributors—that is, on payments from the government or welfare payments.

This bill is one of the first steps towards that sustainability and what we have an obligation to do. My electorate of Parkes has one of the lowest per capita incomes of all the electorates in Australia. No-one knows about the impacts on low-income families more than I do, but what we need to do is have a vibrant economy so that when young people like those which the member for Lalor was talking about leave school there is a worthwhile job for them to go to. This is so that when their parents need care in years to come, when the baby boomers need care, we have the strength in our economy to handle the challenges that are coming our way.

The government has proposed amendments to this bill to remove measures that do not have Labor support, and we have just talked about that. The government wants to help families find affordable child care, and this bill goes towards helping to find the funds for that. I will not go over what other speakers have said, but one of the programs that the government is supporting through these changes is the Nanny Pilot Program. I have heard the mockery from members of the opposition about this program, but this is a very well-received program. There is a lot of interest in this program in my part of the world. A lot of people who work in occupations that are not regular nine-to-five jobs—police officers, healthcare workers, aged care workers and abattoir workers; people like that who work irregular shifts—are looking for an opportunity to find care for their children that fits in with their work programs. This measure would help them overcome the difficulties they have now. The other group of people who are also excited about the nanny pilot are those who live out of town and are concerned that in many cases their children are spending up to 100 kilometres a day in a baby seat. Mostly, the mother is driving them to and from a day care centre in a country town. The parent then goes to work and then they all drive home. Not only is there an inherent danger in doing that on a daily basis; it is incredibly wearing on children to be involved in that amount of travelling. For people who live and work in more isolated areas to have access to child care that fits their needs is a very welcome step.

I do support this bill. I will not be made to feel guilty for the decisions that I make in this place by those sitting on the opposition benches. This is not a job that I come to where no tough decisions are made. This is a job that comes with great responsibility. This is a job that comes with an eye to the future. Every parent wants to have a country that is a better place for their children to grow up in than what they had. As a baby boomer, I am a member of the most privileged generation that Australia has ever seen, and I want to make sure that my children, grandchildren and great-grandchildren have an opportunity to have the same things in life that my generation has been able to take for granted. Unless we take stock of where we are going with our economy and make some tough decisions now, we will look like the countries that some of our European friends have at the moment, with some of the shocking difficulties they are facing because tough decisions and correct and courageous decisions were not taken when they needed to be taken. I support this bill.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

In following the contribution made by member for Parkes on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015, I have some very interesting observations to make. I think they will give an insight into the reason why every time the Turnbull-Abbott government want to make a saving they attack the most vulnerable. They look to the social security system to make savings, or they look to the health system to make savings. What they do is target those people who they think are the most vulnerable. One of the comments made by the member for Parkes that I found highly, highly offensive gave me an insight into the way he thinks about this issue. He talked about the time when people in his electorate received the $900 payment during the financial crisis. He said that poker machine revenue rose. This shows that he believes people who receive family tax benefits or who are pensioners just squander and waste the money that they receive. He does not get it. He just does not get the fact that people rely on their family tax benefit and the support that they receive through Centrelink to be able to live a decent life.

He said that he wants his children and grandchildren to be able to enjoy the same lifestyle that he has enjoyed. I do not think it would be a shock to say that any member in this House knows that they will—they absolutely will, because he comes from an advantaged, privileged background. Similarly, my children will have had the benefit of a good education and support, and they will be able to look towards a very comfortable future. But there is a role for government to provide support for those families who look to government to provide them with support. That is what I find so disappointing. Every time when those on the other side want to make savings, they attack the most vulnerable. They do nothing about the issue of high-end superannuation or any other areas. They could have asked people who are a little better off to make some contribution to the savings.

After that, I would like to congratulate the government on adopting the amendments that they have here today. They are sensible changes. That was the position that Labor took at the time that this bill was introduced into parliament. It has taken the government some time to realise that they will not have the support to get these draconian changes through the parliament. They do not for one minute think that these are draconian changes, but in reality they are changes that really would have an enormous impact on families.

In the Shortland electorate, I have worked closely with a number of grandparent carers. They tell me their stories. I go along to grandparent groups. A grandparent group was being funded and provided support for grandparents who care for their grandchildren—usually, the children were quite traumatised—but, unfortunately, the Abbott-Turnbull government took away the funding for grandparents in these groups. Thanks to local churches and the Samaritans, the group is still going, but they are not properly funded. These grandparent groups struggle from day to day. They do not have enough information and they rely on any assistance they can get from Centrelink, but those on the other side of this House want to make it harder for those grandparents. Those on the other side of this House want to make it harder for single parents. Those on the other side of this House just do not understand. They do not understand how hard it is for people. They do not understand how people rely so very much on their family tax benefit.

The Senate conducted an inquiry into this matter and, overwhelmingly, senators heard how important this is to families. Even The Australian newspaper, which tends to be quite supportive of government policies, highlighted the fact that there would be almost 140,000 single parents and 76,000 couples who would lose their family tax benefit part A. We on this side of the parliament are supportive of couples ceasing to receive family tax benefit part B when their children reach 13 years of age. That is one aspect of this bill that we are supporting. What the government are seeking to inflict on families is unconscionable.

The Sydney Morning Herald sent a little message out on 11 November that the government were looking at breaking up the family tax benefit legislation so they could get some of it through parliament. The opposition and the crossbench knew how unfair this legislation was and we were originally opposed to it. They decided that they would split the bill up and that is why we are supporting the changes today. In saying that, we have to look at the motivation of this bill. The government are splitting it up to get some of the savings through parliament. What guarantee is there that these draconian measures will not be brought back to this parliament in another form? The government will be working to try to get support for those changes and the government will get them through. They are changes that will hurt Australian families, they are changes that will hurt single parents and they are changes that are totally unacceptable. The changes that we support would save the budget $1.4 billion over four years.

Once again, I highlight the fact that this government only ever looks for changes in the areas of social security—areas that are going to hurt pensioners, families and carers. They look at supporting those people as a budget burden rather than looking at it as an obligation and a role that government plays. There is an expectation that, when somebody is doing it a little bit harder, they can look to government for support. If somebody has a disability, they look to government for support. When somebody has children, we support the family during the time the children are growing up. The reason we support families is that we know that, if families have the financial resources to enable their children to attend school, get a good education and be properly cared for, Australia as a nation will benefit into the future. It is not about handouts; it is about ensuring that, as a country, we have a sound future. If we have families, single parents and grandparents looking after children, we need to make sure that they have the resources to deliver what I was just talking about. Their children will be able to go to school and will be able to learn; they will not go without and live in poverty. The children will be able to get the education that they need and then be real assets to Australia.

As I said, we are supporting the change to the family tax benefit part B. That will save $1.4 billion over four years. Now I ask the government if they can go back and see if they can come up with some savings by looking at the high end in superannuation. It is not only The Sydney Morning Herald, The Australian or The Canberra Times that have highlighted the unfairness of this. ACOSS has described the bill that has been amended as unfair and it has called for packages that include an indexation payment for wage movements and new payments benchmarked for children. ACOSS knew that these changes were going to hurt the most vulnerable in Australia. ACOSS also highlighted the fact that family payments play a vital role in combating poverty.

I have to say that it appears to me that those people on the other side of this parliament just do not understand that. I know. I have families come to visit me in my electorate office. I listen. I listen to what they are saying. I know how they struggle with the costs of living. I know that, if this government imposes a GST on fresh food, health and education or increases the base rate of the GST, those struggling families will really find it hard to make ends meet. This is a government that is absolutely focused on removing any support that is given through government to families and is moving away from its responsibility to support those in need. It is a disgrace that any minister or any government could have even thought of bringing in the legislation that was before this parliament to the House. It shows just how out of touch this government is, how unfeeling it is and how it has a total disregard for the needs of families.

I am pleased that the government have come to their senses in amending the legislation. I congratulate the shadow minister, Jenny Macklin, for the work that she has done in this area. She highlighted the unfairness of it. In conclusion, I would like to say that we have won this battle but I am very worried about the war. I am very worried that this government will try some sneaky little trick to bring back this legislation and will be out there negotiating with the crossbenchers in order to try to get it through the parliament in a different form in 2016.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. The original bill that was introduced was designed to do several things. It was designed to introduce a new rate of payment for family tax benefit part B for families with children under one. It was designed to cease the family tax benefit part B to dual-parent families when the youngest child turned 13. It was designed to reduce the FTB part B to single-parent and grandparent FTB part B families with children between the ages of 13 and 16. It was designed to include the cessation of FTB part B for sole-parent and grandparent carers whose youngest child is 17 to 19 and in full-time secondary school. It was designed to phase out the family tax benefit A and B end-of-year supplements over two years, doing that in two stages. The family tax benefit A supplement would be reduced to $602.25 from 1 July 2016 and then down to $302.95 from 1 July 2017 and then abolished entirely from 1 July 2018. It was designed to end the family tax benefit B supplement over two years, first being reduced to $302.95 from 1 July 2016 and then to $153.30 from 1 July 2017 and then abolished entirely from 1 July 2018. The final measure in the bill was to increase the standard rate of FTB part A by $10 per fortnight for all families receiving more than just the base rate of FTB part A.

All of these measures impact on individuals. They impact on real people and families out there that are dealing with their family budgets, paying their bills, getting their groceries and filling up their cars every week. They are not just statistics and numbers that we are talking about. We have heard from the government plenty of times that these are savings, but they actually impact on families.

There are 140,000 families with children under one that would receive an increase of $1,000. This is essentially bringing back the baby bonus that Labor abolished when we were in office. We put the baby bonus payment into paid parental leave because we thought that was a better spend of funds. So it is ironic that in a savings measure we have a spending measure bringing back the baby bonus.

There are 76,000 couples with children over 13 who will have their FTB B cut entirely in 2016. There are 136,000 single parents with children aged 13 to 16 who would have their FTB B reduced to $1,000 in 2016. There are 3,900 grandparent carers with children over 13 who would have their FTB B reduced to $1,000 in 2016. Single parents with children over the age of 16 would have their FTB B cut entirely in 2016. While 1.2 million families in Australia would receive a small increase of $10 a fortnight, 1.5 million families would lose their FTB A supplements of $726 per child.

This bill would have impacted families and individuals right around the country if it had gone ahead in the way that it was designed. Of those families, 650,000 of them are single parents. Around 500,000 of these families are on the maximum rate—that is, they have a combined income of less than $51,000. So we are not talking about high-income families here. We are talking about 500,000 of these families on $51,000 a year or less that are currently receiving this family tax benefit supplement.

The government today has introduced amendments to this bill. We are really pleased to see that the government is amending the bill. We have been fighting cuts to family tax benefits now for more than 18 months, since the Abbott budget in 2014. This is the second lot of family tax cuts that have come to the parliament, and we are pleased to see the government has amended the bill. But we remain really concerned, because these cuts were linked, allegedly, to a child care package that we have not seen. What the government was proposing to do was take money away from some poor families and give some money back to some other poor families, but they would not release the details of the accompanying child care package that is supposed to be related to this. I am not quite sure why it wanted to relate it to it. Obviously they wanted to try to convince some families that they would be better off, but we know that so many families are getting cuts to their family payment. So it will be interesting to see, given that the government had this proposal and was trying to link the packages, what the government is planning to do now. Is the government going to make a third attempt at family tax cuts that will impact families right across Australia? We do not know if that is the case.

We fought family tax cuts because they were fundamentally unfair. We hear a lot from the new Prime Minister about fairness, how things need to be fair and all that sort of stuff, but, clearly, taking money off families who are earning less than $51,000 a year is not fair. These families are relying on these funds to pay their bills and groceries and to fill up their cars. As I said earlier, we are pleased to see that the government has backed down on some of these cuts, but we remain really concerned about what that will mean into the future and down the line. These cuts would have seen families thousands of dollars a year worse off and, in some scenarios, up to $4,000 a year worse off. I have not heard from the government how they expected these families to make up that difference or what they expected these families to do to cut their expenditure. There has been no inkling from the government about how they would have compensated these families.

Interestingly, in the fairness debate that we have been hearing from the Prime Minister of late, we have the GST issue being raised, and they have been saying that they would not increase a GST without compensation for families. Before the parliament we have a bill to cut family tax benefits while the Prime Minister is talking about a GST and compensation. One could expect that what they were trying to do was cut family tax benefits, introduce a GST, then compensate families and try to tell families that they were no worse off. But we know the families were worse off because they already had the cuts. I think that that is what the government was planning to do. I think it was all a bit of trickery and a little bit of accounting to try and say to people, 'We will cut the payments now and then we can give you some compensation later' and then go out and say, 'You are no worse off.' But they would be worse off. They would be worse off if you increase the GST or broaden it, and they would be worse off because they are getting a cut to family tax benefits.

The government will need to explain to families, particularly low-income families, in the lead up to Christmas what they intend to do with the family tax benefit cuts. We now have families doing their budgets, trying to work out Christmas presents and what they can afford to spend on their children and their families into the future, and they do not know what next year is going to bring in terms of their family tax payments. I hope that the government, in coming in here and moving amendments today, will tell people what its future plan is for family tax cuts. This money, as I indicated earlier, is really important to these families. It is really important, particularly to low-income families. It will make a massive difference to them on how much they can spend on things like Christmas presents, because Christmas presents are one of the few discretionary items that some of these families have.

We are one parliamentary week away from Christmas. I hope in that time that the government has the guts to stand up here and explain to families what its future plan is for family tax cuts. Perhaps they would also like to tell us the details of their childcare proposal, which they have also been keeping under wraps and which they keep trying to link to these family tax cuts, although I am still not convinced about why they need to link them and why they intend to take money off some poor families and then try to give it to other poor families. It does not seem to add up at all.

We have had some criticism from those opposite during speeches in the chamber today that spending is out of control in terms of government support payments. These are vulnerable people. They are vulnerable people who get government support payments because all Australians think that people in this country deserve a fair go and that those people that are doing it tough should get support. When we are talking about 1.2 million families, with half a million of those families on incomes of $51,000, we are not talking about wealthy families here. We are talking about families that are really doing it tough—and I think the government needs to go back and have another look at this.

The government cannot say that Labor has not been prepared to support some really tough measures, because we have. To date we have supported around $2 billion in cuts to family tax payments. We have supported the FTB A large families supplement changes. We have supported the lowering of the FTB B income threshold, the removal of the FBT A per child add-on and the ending of the large family supplement. That is $2 billion in savings that Labor have already agreed to. We have said that we will agree to the one change that will still be in the bill after the amendments on this bill are moved later today. We have said that we will reluctantly support that. So we are prepared to have a discussion, as the shadow minister said, about reforms. We are prepared to talk about some changes. But we are not going to sit around and allow the government to attack vulnerable low-income families, because that is what it is doing. If it wants to stand up, talk about fairness and say it will not do anything that will affect low-income people, it needs to understand that these cuts do exactly that.

Today, we are pleased to see these changes, but those opposite still need to explain to families what their future plans are, because, as I said, families are out there making decisions in the lead-up to Christmas about what they are going to be spending on the families in a tough time when they do not know what government's plans for their future payments are. I think that the government really needs to come clean with families now that it has made these changes, which we are really pleased to see, and tell families what its future plans are. At the same time, perhaps, it should unveil some of its childcare package, which it keeps talking about. The government keeps saying that some families will not be worse off because, while the government takes some family payment off them, it will make it up in child care. It is a bit hard for us to judge that when we have never seen the details of the package. The package has been talked about for several months now, and we still have not seen the detail of it. We have seen some of it leaked to a newspaper, but we have not been provided with any detail on it. The government really needs to explain to the parliament and to the people of Australia what its future plan is when it comes to families and supporting low-income and vulnerable families in our community.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

The Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 started its life with the 2014 budget decision to slash family payments to vulnerable families in communities like mine and, I suspect, in communities like yours, Deputy Speaker Kelly. Since the 2014 budget, Labor has been fighting hard against the Liberal coalition plans to cut to cut family payments and other payments. These plans are falling upon the most vulnerable in our community. Labor has fought these changes because they were fundamentally unfair. They would have seen low- and middle-income families lose thousands of dollars every year. That is money that is supposed help them and money that is relied upon—particularly at this time of year when the bills are coming in, the expenses are mounting and people are wondering about whether they will have enough money left over to buy a few modest presents for their kids and for family members at Christmas time. So this is important legislation and it is important that Labor does its job of holding the government to account and ensuring that they do not succeed with these devastating cuts.

The member for Franklin made this point, and it is worth repeating: over a week ago the Prime Minister stood at that dispatch box and said in relation to his plan to introduce a new GST that no government in their right mind would introduce a GST that would harm families and low-income Australians without putting in place compensation. That makes sense, but the compensation that he was talking about would have to be compensation such as that which is provided through family tax benefit parts A and B. Is there any wonder that Australians do not trust this government, this Prime Minister and this Treasurer when they propose to provide compensation to families and compensation to low-income earners when they introduce their GST? Is it any wonder Australians do not trust them when they see legislation such as this, the flipping and the flopping, and the constant changes between one Prime Minister and another? Legislation such as this is designed to rip family payments and benefits away from some of the most vulnerable Australians, who rely upon them.

I know a fair bit about this because in my electorate there are lots of vulnerable families who rely on their family tax benefits to help them meet their household expenses. In fact, there are over 10,500 people who receive family tax benefit part A and another 9,400 families in my electorate who are relying on family tax benefit part B. So we are relieved on their behalf that, at the very last moment, the government has pulled away from this reckless proposal to rip thousands of dollars from the pockets of families such as these in my electorate. These are the communities who are at risk and actually relying on government to reach out, understand and provide them with a little bit of support at this time of the year.

In July this year we saw two high-profile studies. You may have seen these, Deputy Speaker Kelly, because they touch on electorates like yours and mine. The studies confirmed what many of us already knew—that disadvantage remains a real and ongoing challenge for many in our community. The studies have told us that the coalition's first and second budgets have hit low- and middle-income earners the hardest. The NATSEM report which I alluded to recognised that those households worst hit by the coalition's first two budgets were those that could least afford it. NATSEM found that families on the lowest incomes with children were bearing the highest brunt of the federal government's budget cuts. What about high-income families? That same independent report found that they will be actually seeing their disposable incomes increase, albeit slightly, over the next four years. What this means is that this government is addicted to regressive budget measures. Whether it is its plan for the GST, its plan for slashing family benefits or its plan for slashing income support for people who are looking for a job, it is addicted to regressive measures.

The second budget was supposed to be a little gentler on people who reside in electorates such as mine, but it was all a ruse. The authors of the NATSEM report found that the last budget did little to reverse the unfair redistribution of its first budget. In my own electorate, the worst hit areas—like Berkeley, Warrawong, Warralong, Windang and Warilla—are the households where average householders would lose between $500 and $550 in the period between 2018 and 2019. These are not high income households. These are households that rely on modest support from the federal government. These are households and the suburbs that have been hardest hit by these regressive measures.

The report I referred to was followed by a second report. I note there are many in the coalition parties who are very critical of the NATSEM report. They suggested this independent academic body is somehow a tricked-up branch of the Labor Party research. They find it very difficult to make those same claims about the report that was produced by Jesuit Social Services and Catholic Social Services Australia. That report—you may have read it—was titled Dropping off the edge 2015. It was just as damning. Those opposite should pay careful attention to this: it found that entrenched locational disadvantage is actually getting worse, not better. The poorest communities are not catching up. In fact, many families are falling further and further behind, and they are suffering under real pressure. Nothing that this government has proposed in its first, second and, I warrant, its third budget has anything to provide any relief to those households and those families.

The Dropping off the edge 2015 report was particularly alarming for MPs who represent electorates like mine. That is because in my electorate of Throsby, as it currently stands, suburbs like Warrawong, Port Kembla and Berkeley are listed some of the most disadvantaged in the state. In fact, they are in the top five per cent of disadvantaged postcodes. This includes rates of criminal convictions, unemployment, domestic violence and lack of internet services—the basic services that people in electorates like the Prime Minister's take for granted. These are things they can only dream of in some of the suburbs I am referring to.

The suburb of Warrawong, in particular, has a high proportion of people on Newstart, looking for work. It has lots of students not meeting the minimum maths and reading standards and large numbers of residents who regrettably have left school before the age of 15. These are the households, areas and schools that need intensive support, and they are just not getting it. Is it any wonder that they have got some of the highest rates of psychiatric hospital admissions and some of the highest rates of chronic diseases and other preventable diseases? There are households on less than $600 a week, and a high proportion of residents in these areas are struggling on Disability Support Pensions. These are the areas that this government does not have the slightest clue about; otherwise, they would not have proposed the sort of measures that we have seen in the bill being debated before the house today.

We call upon all of those opposite to make their plans clear. This flipping and flopping over cuts to family tax benefits is not good enough. Households need some certainty. They want to be able to budget for the year ahead. They want to know as they are going into the Christmas break that they are going to be able to afford the bills that they know are going to be coming in next year. They take no relief from the fact that the Prime Minister wants to have this broad ranging debate about tax reforms and introducing a GST, offset by compensation, when they see initiatives such as this in the last budget, and the budget before that, which are ripping out payments to those who can least afford it.

Labor opposes the coalition's plans to cut family benefits, because, just like the 2014 measures, they fail the fairness test—that is what it has to be all about. That should be the touchstone of all of us in this House: is it fair and is it sustainable for those households? Clearly, the answer that to that must be no.

With those comments, we look forward to hearing more details of what the government's plans are actually going to be. We see that, as we draw towards the close of the parliamentary year, the legislative agenda is as haphazard at the closure of the year as it was at the beginning. We see bills put on the agenda only to be withdrawn. We see a legislative agenda that that is absolutely barren for weeks, and weeks, and weeks on end. We have the Senate up there virtually twiddling their thumbs because the government has not made its mind up about what it wants to do. But when it does make its mind up about what it wants to do, it changes its mind again.

It seems that the changes they have had in the leadership in last few months has done absolutely nothing to put any more certainty in either the legislative agenda or the conditions that families, in electorates like mine, are struggling under. I call upon all of those members opposite to do some deep reflection over the Christmas break to ensure that measures such as this never see the light of a legislative day again.

Bruce Billson (Dunkley, Liberal Party) Share this | Link to this | Hansard source

I rise to add a few thoughts about the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 and to put on the record my disappointment that Labor has chosen, in its so-called year of big ideas, to oppose a very important reform package—a range of measures that seek to support families, to support and underwrite early childhood support and to give families the best prospect to be their best selves, by providing targeted assistance and encouragement to take advantage of opportunities that may be within their reach. This is what the bill is all about. You have heard the Labor members in the year of big ideas not able to produce one idea about the important public policy area that we are discussing. This is about families, child care, ambitions for the future and getting the policy settings and programs in place so that they can pursue their goals, improve their circumstances and know that there is predictable and reliable support to accompany them on their way as the government also seeks to repair the budget damage and hardship that Labor inflicted on this government. It seeks to do that in a number of ways, and I will come back to the specific parts in a moment.

You would remember, notwithstanding what an absolute standout the small business package was in the budget and how well that was received, another key part of the budget was the Jobs for Families childcare package. Senior figures from Labor, including Jenny Macklin and others that have thought about child care and advocated on it for some time, mouth welcome words about the need for reform of child care. We know the former Minister for Early Childhood, Childcare and Youth, who is at the table, had money to encourage union recruitment through United Voice, and that was a poor substitute for childcare reform. It did not do anything for families.

It is well understood that there is a need to bring about change. To bring about change is to provide the right financial incentives and support for people to be able to access child care as they pursue employment opportunities. They improve their own skills through training and the like. It is understood that this is an area that needs to be fixed. Like other members in this place, I constantly hear people describing how bewildered they are about the current childcare support arrangements and how those arrangements can vary, depending on where people enter the system and what their incomes are and the like.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Mr Deputy Speaker, I raise a point of order. The member needs to talk about the legislation which is before the House. The government has not produced any childcare legislation. This is about family tax—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

There is no point of order. This is a very broad bill on tax. The member for Dunkley has the call.

Bruce Billson (Dunkley, Liberal Party) Share this | Link to this | Hansard source

I understand there are some sensitivities about highlighting why we are having this discussion and how it fits together as part of a coordinated strategy to support families to be their best selves and work towards better opportunities for themselves and their children into the future. This is what this bill is about. It is not only about the ambition and the need and the public policy goals that even Labor luminaries articulate; it is about assembling the means, the resources and the funding to do that in a way that is sustainable. That is the second part of it. You need to be clear what it is you are trying to achieve and set out those objectives and the public policy initiatives that enable you to achieve those goals, and then you need to find the funding. Part of the funding is what we are talking about today, if I can help the former childcare minister understand it. It is not just about spending money. I know Labor are spectacular and world champions at that, but you actually need to raise the money as well. I know it is a novel idea and that it did not trouble the former Rudd-Gillard-Rudd government too often. They were happy to just keep spending it. They never had to worry about where to raise it. Well, this is the other side of the agenda. This is the other side of the profit and loss. You have to raise revenue and find the resources to be able to spend it, former Minister. It is not that complicated. You need to raise the resources to be able to deploy them, and that is what this discussion is about. It is about prioritising key areas of expenditure to support families as they seek to improve their circumstances. It is about having a Jobs for Families childcare package that encourages people—

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Where is it?

Bruce Billson (Dunkley, Liberal Party) Share this | Link to this | Hansard source

Isn't it interesting—the former minister has so much to say about these things now but she had so little to do when she actually had the responsibility. She knows the package, she knows the changes and she knows how there is better targeting of support. I could spend more time talking on that, but I imagine she would jump up and say, 'That's not what the bill's about.' It is the motive of this bill; it is the purpose; it is the goal, and the bill seeks to bring about some of the resources to achieve those goals.

What is troubling is that the original proposition the government brought forward was a crucial $4.7 billion down payment on that Jobs for Families childcare package. It was an enormous commitment, a reprioritisation of resources, all aimed at increasing the overall support that was there for families but also aligning it with families that seek to improve their own circumstances and to have the policy settings in place to do that.

We are having to amend that bill, so when you hear Labor saying, 'What are they talking about?' we are here today because Labor are standing in the road of measures that would fund the Jobs for Families childcare package. We are here today because they have refused to support certain changes, and they are the same side of politics who unilaterally decided single parents should go off those payments and onto Newstart. This is Labor's formula, with very little support to assist the transition—and they have the hide to come in here and attack the government for very sensibly and in a measured way trying to put in place the support that families are looking for so that tens of thousands of family members—often women—who want to go and engage in the economy, to raise revenue and income for their families and to provide a wonderful statement about the capacity of family members to participate in the economy can do so. It is a great single signal to children, who would then see that investing time and energy in the economy, pursuing livelihoods and improving oneself through training and education are things that are valued and important in that family environment.

Why is that important? I know from my own community, where there are intergenerational issues about unemployment, that often it is about breaking that cycle. It is about putting before people new incentives and new support, such as the Jobs for Families childcare package, so that those in the family think: 'I can take some steps in my life and improve my circumstances and improve my prospects for higher levels of income in my family. I can model the kind of behaviour that I hope for from my children.' That is fantastic. It is transformational. That is the way in which you can inject new possibilities into families that might have been challenged by intergenerational unemployment. That is what the public policy goal is. And what is Labor's response to that? 'Yes, there need to be changes, but you have to pay for it.' That was the member for Jagajaga's contribution: 'Yes, these reforms are needed, but you need to pay for it.' Two things are relevant here. What is Labor's childcare package? They have got none. In the year of big ideas, they have come up with three new taxes.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

You haven't got one, and you are in government!

Bruce Billson (Dunkley, Liberal Party) Share this | Link to this | Hansard source

The member for Adelaide has been so distracted not to know that this is all articulated in the budget. I can make sure the responsible minister can share that material with her if she is looking for a briefing. If she is so detached from the subject that she has not caught up with what is in the budget, I will personally ask the minister to give the member for Adelaide a briefing—that is how helpful and collaborative I am. But the point is that Labor have no policy, just obstruction, in this year of ideas.

Not only do we have the forward agenda and the improved policy settings; we have mapped out how we plan to fund it, because today we as a country are going to borrow another $120 million. And you know what? We are going to do that tomorrow as well and we are going to do that for at least a couple of years. That is off the back of borrowing of around the same order for about the last five years. This month we as a nation will spend $1 billion on debt servicing, just to pay for this constant borrowing, because we have not shown the wit to be able to pursue important policy objectives and live within our means.

This bill aimed to do both—put in place a better policy setting and a better arrangement for families looking for support, encouragement, incentives and certainty about the help and the financial assistance that they would get from a childcare package people could actually understand. You did not need a PhD in government program feng shui to work out what it is you were entitled to. You could plan with predictability about what the support is. That is what the goal is and we needed to fund it. What we were doing was better targeting family assistance payments as part of that goal, so that when children are of an age where they are probably pursuing goals of their own—I know when I was around 13 I would be out every night playing tennis or getting involved in sport or other activities—there is an opportunity for the level of direct care from a parent to take on a different shape. You know this yourself, Deputy Speaker Kelly. It is a chance for those parents to have a clear run to achieve their goals and their ambitions, with support.

Originally this package was around $4½ billion, as a reprioritisation and an increase in the total amount of support going to families. It refocused that. Labor took single parents off their payment and onto Newstart, unilaterally, with no support during the transition, with no thought to the impact on households and no idea of opening up new opportunities so that people could pursue goals themselves. We have not done that. It is a cooperative package, but we needed to fund it. Labor has decided that, of that total funding package of $4.7 billion, it will agree with $500 million. As that great philosopher Maxwell Smart would say: 'Missed it by that much.' It agreed to $500 million when we needed $4.7 billion to fund a clear plan designed to give tens of thousands of people, mainly women, an opportunity for full engagement in the economy, opportunities to improve their prospects and their income, opportunities for their families, opportunities to invest in themselves with training. It would have child care seen not as a welfare measure but as an economic and personal achievement and ambition measure. It would properly align that, and the funding was there, but no.

Labor not only have no plan for it; they have no other suggestion on how you would fund it. So they are just going to stand in the road of $4.3 billion of funding. That is standing in the road of increased payments going to a family with one child, with one parent working full time and the other part time, with a three-year-old daughter. These are called cameos; they are examples of real households. One parent works full time and earns around $85,000 a year and the other parent works three days a week and earns $51,000 a year. The child attends the local day care centre on the days when mum is at work. Under our comprehensive package, which Labor seems not to know about because they have been too busy—I do not know what they have been doing but they have not been doing policy work in the 'year of ideas'—that family will be $43 better off a fortnight in 2018-19, if the full package is implemented.

There are other case studies: a single parent—a single mum, if you will—working two days a week with a three-year-old son. The child is in long day care those days. Mum earns $34,000 a year. This is the package that Labor is standing in the road of, in the name of some concocted idea about fairness. Fairness is about enabling everybody to achieve their full potential. Isn't that a picture of fairness? Isn't that the story of our country? We are here to support everybody to achieve their ambitions and aspirations and their full potential. It is unfair to stand in the road of the machinery and the tools that help people achieve that. In that cameo, that single mum would be $38 a week better off. A family with two children—a newborn, three months old, and a two-year-old—where one parent stays at home while the other works full time and earns $51,000 a year, a modest income, under this package would be $60 per fortnight better off.

What is going on here? It is some parallel universe where there is $4.7 billion of additional and reallocated funding to go into a most visionary program of reform, to have child care support jobs, family ambition and higher incomes, and Labor comes in and say, 'No, we're not going to let you fund that.' And then they have the hide to say, 'Well, what's your plan?' We have a plan and we want to get on with it. The tens of thousands of families who would like a fuller engagement in the economy and every opportunity to achieve their best selves want us to get on with it as well. But to do that we need the whole package to pass. Instead of what we were hoping for, $4.7 billion, Labor has agreed to a $525 million down payment. That sounds unfair to me.

I would like my families to have the opportunity to be their best selves. Your postcode does not determine your potential, but some of these policy settings can inhibit you achieving that goal. We wanted to fix that. That is what we are trying to do here, and Labor is playing cheap politics, with no ideas in this 'year of ideas'. Why stand in the road of what this government wants to do? It is so meaningful. It is so thoughtful. It can be done and it can be funded. Why not do that?

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

I rise to continue the argument for the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. What a tremendous contribution the member for Dunkley has just made. He succinctly put the case for this measure but he also cast our minds back to the reason we find ourselves in this position. The member for Adelaide had a little bit to say in her contribution, but oh how the memories of those on the other side of this parliamentary chamber have become so short. The government has proposed amendments to the bill to remove measures that do not have Labor support, but we are still here fighting the good fight for a good cause—finding the savings that are required to enable us to invest in much-needed reform for our child-care sector for the 21st century. Labor has turned a $4.7 billion package covering child care into a $525 million downpayment. To steal the words of the member for Dunkley, they 'missed by just that much'. We should not be surprised by that, because we had six years of a government that missed by just that much.

Those who are listening and watching need to understand that every morning when your alarm clock rings and you wake up for another great day—any day you are breathing is a great day—the taxpayers of Australia will have to find $100 million just to pay the interest on the debt left by the previous Labor government. And they missed by just that much—$100 million is an extraordinary amount of money that we have to find every day just to pay the interest. I continue to say to the Australian people, focus on that. You elected a government to bring the finances of your country back into line so that we can leave things in a better state for our children and grandchildren than is currently in prospect at the moment. We were elected with a mandate to do that, and it is fair to say that at pretty much every turn in the last two years of this democratically elected government we have found ourselves continually bashing our fiscal head up against the wall.

We hear a lot in this place about fairness; we hear a lot about being equitable. I ask those opposite what is fair about loading up my children, the grandchildren I do not yet have and everybody else's families with massive debt? We would not tolerate it in our own family but we think that this democratically elected government should tolerate it forever and that we should continue to put our expenditure on a massive trajectory. Maybe Labor just want us to ratchet up taxes to pay for it. No, we need to make sure that this country remains productive and competitive. Continuing to raise taxes just to pay for undisciplined, out of control expenditure is not acceptable in anybody's language—certainly not the language that we on this side of the House speak. We hear a lot about being equitable. What is equitable about an opposition, a Labor Party, that claims to be the alternative government running a protection racket each and every day for militant unions at the expense of the remaining 85 per cent of the non-public service workforce who have to pick up the tab? I do not see much of a protection racket being run by those opposite for the farmers and the small businesses. They have their favourites—they continue to pander to and reward those favourites but it is at the expense of those people who are the ultimate economic contributors and wealth makers of this country.

The government wants to help families find affordable child care. I am sure that sentence will resonate with most of the hardworking families of this country. They need us to help them find affordable child care. This is an extremely important productivity measure that will boost female workforce participation, that will be an economic enabler across our nation. We as a government stand ready to invest almost $40 billion over the next four years into child care. This includes the extra $3.5 million for the Jobs for Families package, to make child care simpler, more flexible and more accessible. The government is committed to supporting parents raising children. We are also committed to ensuring the family and childcare systems remain targeted, sustainable and effective into the long-term by reforming the family tax benefit system.

We on this side of the House spend a great deal of time looking beyond today. That is what we are elected do. It is not about political survival, it is not about my political tenure as the local member for Braddon, it is not even about the Liberal or National parties. I thought that we were all elected to do what was best for the country, to ensure that this nation's prosperity is sustainable and effective. We cannot continue to be either sustainable or effective with massive debt over our head and an undisciplined approach to expenditure which will ultimately lead to ongoing deficits—every budget spending more than we earn. Any person with a modicum of common sense would know that that is unsustainable. I accept that in any change of government policy there will be people across the nation who are impacted more than others, but I have not been elected, the government has not been elected, to develop policy for individuals. The government is elected to develop policies for the prosperity and the betterment of the nation as a whole.

That is what this bill is about. It is about taking advantage of the need to find funds for a childcare system that is absolutely in need of reform. Our welfare system is growing beyond the reasonable capacity of taxpayers to pay for it. Again, to those watching or listening, hear this: the taxes paid by eight out of every 10 persons who takes home a pay cheque this week or this fortnight go to pay the welfare bill of the nation. The taxes of eight out of every 10 hardworking taxpayers taxes go to pay just the welfare bill of the country.

The welfare system in this country should be a safety net—that is what it is about. Any fair-minded Australians would agree that their taxes should and can be used with their blessing to protect the vulnerable. This country is great like that—they get that. But, what they do not get, is their hard-earned taxes sustaining a system that is inherently not there as a safety net but has become some system of, shall I say, support that some people think just now is to be expected each and every day.

Under this bill, from 1 July 2016 couple families eligible for FTB B, other than grandparents, will receive the payment only while the youngest child is aged under 13 years. This replaces the 2014-15 budget measure, which reduced payment eligibility to the age of six. The government will continue to provide vulnerable families, such as single parents and grandparent carers, with FTB B assistance, until the youngest child turns 13. These changes will enable us to invest more heavily into giving Australian children the best start in life.

As a result of the new childcare package that we have spoken about, families using childcare services from July 2017, and with incomes of between $65,000 and $170,000, will be on average $30 a week better off. The Jobs for Families package has several components, including a two-year national nanny pilot program to support around 10,000 children in families finding it difficult to access standard childcare services.

As the elected member for Braddon, I know that some in my electorate—not the majority but a significant part of my electorate—are in geographical locations that make it very difficult for them to access child care. The member for Adelaide obviously knows my electorate better than me, by the look of the squint I just got from her across the chamber, but I think I know my electorate. Can I say that the nanny pilot program, which is designed to provide care to 10,000 children, will be warmly welcomed in my electorate. It will open up possibilities that do not currently exist for mums and dads across my electorate.

The government wants to provide creative choices for people to find the childcare system that works for them. The Child Care Subsidy will simplify what is currently a very complicated system by replacing three payments: the Child Care Benefit, the Child Care Rebate, and the Jobs, Education and Training Child Care Fee Assistance. The Child Care Safety Net will provide targeted support to vulnerable families and childcare services in disadvantaged communities. There will be stricter immunisation requirements for receiving childcare subsidies and support, under the Australian government's No Jab, No Pay policy.

As I wrap this up, can I just say that the government is absolutely committed over the long term to continuing to assist families to raise their children. But can I stress 'long term', because I want to go back to a point I made earlier. Good government policy has an eye to the future. It is not about our political fortunes today. It is not a Band-Aid fix that we are looking at. We are looking at generational change to a policy that is currently out of date, far too complicated and does need some serious reform. But we are committed to families in the long term. I say to the people of Braddon: if you want a sustainable welfare system that is there as a safety net, if you desire effective child care, for not only your own children but shortly, probably, your grandchildren, it has to be affordable. The nation's finances have to be in order and sometimes governments need to make decisions that will be taken advantage of by our political opponents.

I think the Australian people—and certainly the electorate that I represent, and I am sure the other 149 electorates are exactly the same—seriously understand the need for this government to get the finances of the country under control. They have a view that they are prepared to do what is in the best interests of the country, if we explain it and if we find a national fairness about it. But it is not helped by the deceit and the militant action of some, who just seek to destroy the future of our country. I say to those opposite: get with the program, stop thinking about today and start thinking about tomorrow.

Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I thank all the members for their contributions on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015. Perhaps the most useful way to commence in this particular summation of the contributions is to note some points of procedure and the path in which the government is going to approach the present bill, in regard to the position of the opposition. That is, essentially—and there are amendments before the House that will be dealt with shortly—that there is a single portion of the bill that is agreed to by members opposite. The bill does several things and what is agreed to by members opposite is merely one thing and one part of an overall suite of measures. What will occur is that we will amend the existing bill down to simply that portion with which the opposition agrees.

I must note for the record and for the House that the remainder of the issues that are dealt with in the bill as it presently stands, prior to any amendment, will in their substance be brought back before the House. They maintain their status as general policy of the government, and the position will be put that they represent appropriate savings that the family tax benefit system can garner in the context of a necessity to pay for very substantial reforms to the childcare sector.

By way of summary of what is presently in the bill—so that exactly what members opposite are agreeing to and, therefore, what this bill will be amended down to can be delineated—I note that there are, I think, three issues that need to be raised by matter of description.

The first is that there is a major saving in the bill which revolves around the reform of family tax benefit part B rates. In essence, the bill proposes that FTB part B payments, which are per family, should cease when the youngest child of a family in the FTB B system turns 13, but with some mitigatory and compensatory spends attached to that policy, which are twofold—first, that there should be an additional $1,000 paid for the youngest child aged under 12 months in an FTB B family; and, second, that there should be a compensatory payment to two groups of FTB B families, those being single-parent families and families where there are grandparent carers of a child at and then over the age of 13, and that amount is also $1,000. Overall, in fiscal terms, those proposed changes to family tax benefit part B rates would be about $1.4 billion over four years.

The second group of measures and the largest proportion of the expenditure restraint in this bill is the phasing-out of FTB end-of-year supplements, both in FTB A and FTB B, such that the supplement in part A would be reduced from its present amount to $600, then down to $300 and then, in the third year, extinguished and no longer payable; and the part B supplement would be reduced to $300, then to $150 and then down to zero and no longer payable.

The third area is actually an area of spend—and again it is meant to be a compensatory and mitigatory measure in the overall savings package—whereby we would increase the rate of FTB part A and youth payment fortnightly rates by the amount of $10.08 a fortnight. That would involve, over the relevant period of spend, about $585 million. So the major saving in the bill comes from the ending of end-of-year supplements, and that is a matter I will return to shortly. That would achieve a saving of about $4.1 billion.

What members opposite have indicated publicly that they are agreeable to is ceasing family tax benefit part B for families when the youngest child turns 13, but not for all families. Members opposite would not agree to ending that payment for grandparent-carer families or single-parent families, but they did agree to ending the FTB B payment to couple families when the youngest child turns 13.

As is appropriately and properly the case, these debates revolve around notions of fairness. We on the government benches would argue that fairness is always a matter to be considered in context. There are two important contexts in which to consider fairness in this instance. The first is that the approach we are taking is to link, in a practical sense, the savings reforms contained in this bill to a very significant expenditure which would very significantly reform child care in Australia. Indeed, the expenditure on the reforms to child care would amount to $3.5 billion. So this would adequately pay for that and allow for some budget repair along the way. But, as has been noted, only one portion of the bill and one aspect of the savings elements of the bill has been agreed to by members opposite. The second context in which we say fairness needs to be taken into account is that the savings that we propose would not merely pay for sweeping reforms in child care; they would also allow a modest contribution to budget repair and assist the nation to return to surplus.

Again on the context of fairness, I raise this point: when a nation is in both debt and deficit, which is the situation that our government undeniably inherited, any expenditure that cannot be restrained today or avoided today is effectively paid for by borrowings. So we are talking here about savings which, if denied by members opposite, will be paid for with borrowed money. That is a very important context in which to consider fairness. That is because, in any family that might by virtue of this legislation be subject to a reduction in FTB B when their oldest child turns 13, that child will in a very fulsome sense very quickly enter the tax system and, because we are presently borrowing money to pay for a welfare system in terms of incremental spending that we cannot avoid today, that child's taxes will be required to not only contribute to and pay for the welfare system of their own day but retrospectively pay for the welfare system that we maintain today. As a matter of intergenerational equity, there can be no characterisation of that as a fair situation.

We argue strongly that any issue of fairness has to be considered in the context of the deficit that we inherited and the debt that we inherited that require any responsible government to engage in expenditure restraint, because expenditure that cannot be restrained today is paid for in borrowings, which effectively means it is being paid for by taxes that have not yet been paid by young people that have not yet reached their fulsome contribution to the personal income tax system and other taxes.

It is worth analysing at least briefly, I think, what members opposite argue is fair and have agreed to as a proportion of the savings measures in this bill, whilst they argue that other portions are unfair. What members opposite are essentially agreeing is that it is fair to end family tax benefit B for couple families when their youngest child turns 13. We would say that that is fair in the context of deficit, issues of intergenerational equity and what we wish to apply the savings to, which is sweeping reform of the childcare sector.

It is interesting to analyse an argument that it is fair to remove family tax benefit B from couple families but unfair—as is proposed by members opposite—to remove it from grandparent carers or from single-parent families. If you compare the pair, so to speak, the reality is that grandparent carers are much younger than their name would suggest. You can well have a situation where there is a grandparent carer couple in their mid-50s on a particular income whom the opposition say it is unfair to have family tax benefit B removed from, but in the case of a comparable couple who are simply a couple family with children in their mid-50s, on exactly the same income, members opposite now agree that it is fair for their FTB B to end when their youngest child turns 13. There may be no material difference between the two families in income or any other economic measure, but members opposite are tacitly agreeing that it is fair for the FTB B payment to end in one circumstance—for the couple family—but not fair in the other circumstance, for the grandparent carer family.

Similarly with a single-parent family: a single parent may be in exactly the same economic circumstances as a couple family. Members opposite are agreeing to the removal of the FTB B from the couple family but not from the single-parent family. While, in context, the savings in this package in their entirety could be argued to be fair, with what members opposite have agreed to, couple families now face a situation where their family tax benefit B will end when their youngest child turns 13—but where other families, who may well be in similar or precisely the same circumstances economically, will not have to make a similar contribution. I think this simply goes to the point that judging fairness, at certain points in time in certain arguments, particularly from members opposite, becomes a situation where the goalposts move very rapidly indeed. Those couple families might ask themselves why it is fair for them to lose a payment but not fair for other families to lose it.

When we look at the other measures in this bill, some further things are worth noting. The childcare reforms, which the savings in this bill are intended to pay for, will replace three separate payments with a single payment. There will be hourly caps on the provider, which will ease some of the inflationary drivers that exist in the present system. There will be a very generous activity test. As a whole, those childcare reforms will provide very significant economic benefits to families engaged in child care or desiring child care, and they will drive participation. It is also interesting to note that the overwhelming majority of the savings in this bill which are not agreed to by members opposite arise from ending FTB end-of-year supplements. That is the major saving in this bill which is not agreed to by members opposite. It will be brought back to this place in a separate bill.

The McClure report noted that the Australian welfare system has 20 different categories of welfare, with up to 55 different types of supplements, subpayments, bonuses and add-ons, creating an excruciatingly complicated system. These end-of-year supplements which we suggest should be removed—and which would be removed if this bill were supported in its entirety—came into being in 2004 during the time of the Howard-Costello government. The official reason for introducing these supplements in 2004 was to mitigate the risk of debt at end-of-year reconciliation. In the years prior to 2004, in some instances families who were receiving fortnightly payments, particularly under FTB A, were incurring debts at the end of the year because of understating or underestimating their income. In the years preceding the introduction of these supplements in 2004 there were higher numbers of people who had incurred those debts. Those levels of indebted recipients stabilised and they are now much lower than they were during the period up to 2004.

The supplements were introduced at a time when there was an estimated $13½ billion dollar surplus. They were specifically designed to mitigate the risk of debt, which was higher then than it is now—and we believe that, with the advent of the single-touch payroll system that will be rolled out in three years time, the risk of debt can be very substantially reduced. If, in a situation of debt and deficit, we are unable to avoid the expense of FTB end-of-year supplements, we are in effect borrowing money to pay for supplements to mitigate debts that the overwhelming number of recipients do not in fact have and which will be substantially eliminated in the very near future by a technological solution being developed by government. That has to be considered in light of fairness and issues of intergenerational equity—whether it is wise to borrow that money and expect a future generation of taxpayers to pay it back while also paying for the welfare system of their time. If we as a House cannot agree to phasing out supplements that are no longer fit for purpose, that were brought into being during a period of massive budget surplus and that were designed to mitigate debts that no longer exist, then we clearly have a very difficult problem. Nevertheless, there will be amendments and we would hope to progress them.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

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

Message from the Governor-General recommending appropriation announced.