Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

In the few minutes that I have left I would like to finish reading the email that I received from Sharon. Sharon is somebody who is very concerned about this government's attempts to again cut family tax benefits A and B. In her email she pleads for this House not so support the measures in this bill. She says that the impact of cutting family tax benefit B would reduce her income to $290 per week and it is simply not enough for her and her 13-year-old daughter to survive on. She says that she has worked hard to try to find work in central Victoria but there are not a lot of jobs available for single parents that fit with caring arrangements. She said: 'As you know, central Victoria is a region of high unemployment, and I continue to look for work and apply, have the interviews and get rejected.' She has tried to do vocational training, but with the closure of some of our TAFE courses it is hard to get the extra training she requires. She says in the conclusion of her email: 'Please do not humiliate and punish my daughter and me any further, or thousands of other single parents. We need your support and not your cuts or these cruel measures.' I agree with Sharon, and she is brave to speak out and raise these issues. She and so many other single parents are the people that this government continues to attack with these harsh measures.

Since the 2014 budget this government has tried multiple times to cut family tax benefit A and family tax benefit B, which would push more single parents and more low-income families into poverty. Approximately 1.5 million families are going to lose family tax benefit A supplements, a cut of $700 per child per year. That is around 600,000 single-parent families and 500,000 families that are on the maximum rate, meaning their combined family income is less than $51,000 a year.

The average income in the Bendigo electorate is $53,000 a year. So lots and lots of families in the Bendigo electorate will be affected by this cut. One point three million families will lose family tax benefit B supplement—a cut of more than $350 per family per year.

These cuts being put forward by this government demonstrate one thing: it does not matter who the Prime Minister is; they are still mean and tricky. It does not matter who the Prime Minister is or who their front bench is; they are still going to go after those on the smallest of incomes in our community.

I cannot understand why there are not more regional Liberal and Nationals MPs speaking up against these changes. In the regions there are more of the families that will be affected by this change than in other parts of Australia. As I mentioned at the beginning of my speech, there are just under 20,000 families that will be affected in my own electorate, and 20,000 families in the seat of Mallee and the seat of Murray, and over 20,000 families in the seat of Wannon. That is a lot of regional Victoria that will be affected by these cuts. That is on top of already losing the schoolkids bonus, which will cease after this year. It is also on top of the government going after these workers' penalty rates and saying that people who work on a Sunday can cop a 37 per cent pay cut. This is on top of the increasing costs of the basics—the cost of electricity going up; the cost of rent going up; the cost of fuel going up. This government is also proposing a 15 per cent GST—a tax on a tax when it comes to the fuel excise.

People in central Victoria, in regional Victoria, do not trust this government when it comes to their incomes, and they have a right not to. These bills should be voted down. People in regional Victoria cannot afford these cuts, and the government should withdraw them.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

It is the first time I have seen no member of the Labor Party on the other side of the chamber—with the exception of you, Mr Deputy Speaker Mitchell. We hear the same lines as always from Labor. They are even still talking about a GST increase which the government has never advanced. They are trying to paint the Prime Minister falsely, according to old lines from six or 12 months ago.

The one consistency amongst all this is that the Labor Party always is the roadblock to the future of this nation. The history of the six years of their government was one of taking this country from a black ink position, where there was money in the bank and there were surpluses being run, and taking this country down into the red. You would think that there would have been lessons learnt from those days, but at every turn now we see—today in the MPI and today in question time we saw—the same old Labor Party: the Labor Party that will get in the way of every attempt to fix up the budget situation for the country. Labor has no credible savings plan. They plan to extort and raise massive amounts of money from those who are addicted to smoking—there is certainly that plan. But, really, when we talk about trying to reduce outputs—to reduce expenditure on the federal budget—the Labor Party is always in the way of trying to fix these problems up.

The member for Bendigo talked a lot—both before she was interrupted and at the conclusion of her remarks after the MPI—about the 20,000 families in every electorate who she says will be affected by the measures included in this bill. Well, I worry about a future where every family around this country will be impacted by our inability to get the budget under control. That is the future I worry about.

When I look at kids in the length and breadth of Cowan—whether it is those young kids just starting this year in kindy at Hawker Park Primary School in the west of Cowan, or those all the way over in East Beechboro Primary School and Lockridge Primary School in the east of Cowan, or those at Tapping Primary School in the north, and even Emmanuel Christian Community School's primary kids right in the south of Cowan—I worry about their future, when I see the debt that faces us and the interest payments that face us now. If we cannot get more savings and if we cannot reduce expenditure, I worry about what their future is going to hold.

I understand that currently it is something like $12 billion to $13 billion just in interest payments for the debt levels of this country's federal budget. Unless we get some assistance from the other side, what is that going to look like in 15 years' time when those young people are going to be paying taxes? What is that interest payment going to be then, and what won't be able to be afforded then? They will look back upon this time and say, 'Why were we betrayed?' If they want to look back in the history books, they will be able to see what happened at the time. But they will want to know why they were betrayed—why their future was sold out, because no-one wanted to actually fight the fight here and no-one wanted to take some decisions here.

The Labor Party has been very good at saying to people, 'Just think about yourself. How evil is the government for trying to cut the money the taxpayers give you! How cruel the government is! How unfair and terrible the government is!'

In 15 years from now or 30 years from now, one or two generations in the future, what is going to be the Australia they inherit if there is crippling debt that was not reined in because this parliament—mainly the Senate—refused to do what needed to be done? Let's live now with handouts and those payments continuing, but what will happen in the future when future governments say: 'Actually, we don't have any money left for age pensions anymore.' There are not going to be any schoolkids bonuses in the future when interest payments get to $30 billion or $50 billion per year. Unless something is done, unless we get some cooperation or some realisation from the other side of politics that there is an issue that must be addressed, I do worry about the future. It will be my kids, your kids, your grandkids and my grandkids and, in the end, they will not be thanking us for what has happened in the last seven or eight years. So we have a responsibility and we recognise that on this side.

We can talk about the promise from the other side for Gonski. What happened with Gonski was that for four years there were modest increases in school funding that the other side of politics promised before the 2013 election and then they said, 'But in years 5 and 6, the ones that we don't have to include on the balance sheet, that's when the money goes sky-high.' Then we came to government and we realised that the payments in those years were not affordable. We are trying to pay for the NDIS, we are trying to pay for Defence spending that is necessary to replace ageing equipment and we need to pay for our welfare system. We cannot afford everything.

The bill is about trying to restore the budget and it is also about trying to improve the economic productivity that is going to come through a readjustment of $3 billion for the Jobs for Families Child Care Package. This has certainly been a focus of the government. It is important to put the resources in places where economic benefits are going to add value to the future, where Australian families and businesses can benefit whilst, at the same time, the economy grows through greater participation and productivity. It is absolutely the case that, through the childcare package that we are trying to finance, this will further add to the circumstances that we currently see, where female participation is at an all-time high. Productivity and participation rates—this is a good moment. A lot has been achieved and more needs to be done. Currently, the family support payments cost $28 billion a year. That is a very large figure. It comprises the family tax benefit at $20 billion, the childcare benefit currently stands at around $6 billion and there is about $2 billion in the Paid Parental Leave scheme. Nothing is actually unfair about the measures proposed in this bill.

There are three elements to the bill and they include an increase of $10 per child for family tax benefit part A fortnightly rates up to the age of 19, a change to the rules and rates for family tax benefit part B, and a phased end to part A and part B supplements. There is no doubt that this is about an emphasis on those in most need, but it also acknowledges that there is a system that needs to be sustainable. It is not the Labor way, of course, to have a program that is sustainable, but that must be the way we proceed from here.

With regard to the government's plans, what is actually going to happen? As we recall, with the assistance of the opposition there have been some limits placed on family tax benefit part B for couple families, other than grandparents, when their youngest child turns 13. We are proposing to make these changes from 1 July 2018, so that will give people plenty of warning of the changes to come. As I said before, the first element of this legislation is to, from that date, increase family tax benefit part A fortnightly rates by around $10 and also, in order to help align with family tax benefit part A, increase the fortnightly rates of youth allowance and disability support pension. It is in this case that, by the start date, there will be an increase to 1.2 million families around the country.

Obviously, as I said before, what we want to do is try to increase participation rates. More support is provided under family tax benefit part B when the children are born and more is asked for when the youngest child is older. From 1 July this year, family tax benefit part B, for those with a child under the age of one, will get a $1,000 per year increase. As previously announced, there will be a continuation of current standard rates for families with a youngest child aged between one and 13. Recognising the challenges for older parents, those standard rates will also be held for single parents 60 years and older and for grandparent carers and great-grandparent carers with a youngest child aged between 13 and 18. Where a parent is under 60 years old, there will be a reduced standard rate of $1,000, and that is in the case of a single-parent family where the youngest child is aged between 13 and 16. We know the role of parents and the importance of parents in raising their children properly. They should have support, but it must be targeted and based upon their abilities, and that must be sustainable as well. Ultimately, it must be paid for and it must be affordable.

As I said at the start, we also have the proposal to phase out the end-of-year family tax benefit supplements. The supplements will be reduced in 2016-17 and 2017-18 before being abolished in 2018-19. They were created to reduce the risk of unexpected debt repayments due to what amounted to difficulties with predicting income levels over the financial year. Technology has moved on and in the coming years more accurate reporting of real income will eliminate or greatly reduce the risk of any such debt.

I say again that none of what is proposed is unreasonable. It is not unfair. What would be unfair is imposing massive debt on future generations or possibly there being no safety net or family support in the future because of debt and deficit levels. As the minister has already said, it is great that Labor has supported the changes to family tax benefit part B for couple families, other than grandparents, but $520 million in savings is not enough to get the job done. All the savings are required to fund the childcare package and to help restore the budget. Targeted savings, a plan to increase productivity and participation, while at the same time helping to fix the budget, is what this country really needs now and what future generations expect of us.

I go back to where I started. Looking to the future, we need to act now. We need to fulfil our responsibility to those who follow us so that they do not look back upon this time and ask, 'Why did they sell our future for the gains of the moment?' It is time to live within our means and do something for the future of this great country, so I commend the bill to the House.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I rise to oppose this bill, the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. In doing so, I join my Labor colleagues in calling, as we have been doing since 2014, for this government to go back to the drawing board on family payments and to come back with fair savings that will not target and hurt low- and middle-income families.

This bill that we are debating today demonstrates that, while we might have a new Prime Minister, nothing has changed. It is 2014 all over again. This is still the same government making the same cruel cuts that target low- and middle-income families. In fact, the Prime Minister's new cuts to families will leave some families worse off than the former Prime Minister's cuts would have done.

I remember 2014. I remember that hideous budget. That budget attacked and cut at the core of what Australia is all about. It cut at our values. I remember that around the time the budget was released I went and did a number of mobile offices to take the pulse of my community and get a sense of what Canberrans were thinking about the budget. It was shocking seeing how many Canberrans were terrified about the plans of the then Abbott government in its 2014 budget and its incredibly harsh cuts. The harsh cuts targeted low- and middle-income families and the most vulnerable in our community, such as those on the disability support pension, single mothers and families doing it tough. That budget targeted them and many others. As I said, I remember doorknocking at the time and discovering that Canberrans were terrified. They were fearful. They were in shock that a government could do this to them and that it could cut at the values that Australians value so strongly and into the very social fabric of our community.

There was one woman in particular I remember. She was a single mother. I knocked on her door and said, 'I would be grateful for your feedback on the budget.' She said to me, 'No, I really don't have much to say.' Then obviously she collected her thoughts because she came running down the street after me in tears. She talked about the fact that she was terrified about what was going to happen to her and her child. She was terrified about the fact that she would not be able to send her child to university. She was terrified about the fact that she would not be able to support her child through school. She was terrified, running down the street in tears to pass on her views and have her say. That is what the government did in 2014 to Canberrans and other Australians. I am sure her experience was not unique.

It is absolutely outrageous that this government, as it did then, continues to target low- and middle-income families. Under this bill, 1.5 million families are going to lose their family tax benefit part A supplement, a cut of more than $700 per child every year. Around 600,000 of these families are single-parent families. We are talking about the size of the Tasmanian population plus an extra 100,000. Here in Canberra we are going to reach a population of 400,000 shortly, so that is the population of Canberra and 200,000 extra. Around 500,000 of these families are on the maximum rate. Many are on a combined family income of less than $51,000 per year. About 1.3 million families will lose their family tax benefit part B supplement, which is a cut of more than $350 per family every year. Single-parent families will be hit even harder, having their family tax benefit part B reduced to $1,000 per year when their youngest child turns 13 and then cut entirely when their youngest child turns 16. Age 16, when things start getting really expensive when it comes to clothes and shoes, is when the family tax benefit part B will cut out entirely.

When it comes to fairness, this Prime Minister, as I said, is no better than the former Prime Minister. He still refuses to make multinationals pay their fair share in tax. He still refuses to curb generous tax concessions for wealthy superannuants. Instead, he would rather take money from the pockets of ordinary Australians in low- and middle-income families and then slug them with a 15 per cent GST. Of all the cruel cuts that those opposite have inflicted since coming to government— and I just recall again that hideous, harsh and cruel budget of 2014—to me this one feels especially personal.

I have spoken many times in this place about growing up in a single-parent household, about my father walking out on us when I was 11, leaving me, my two sisters and my mother with just $30 in the bank. I have spoken about how hard this made life for my mother, my sisters and me, especially in those early years. In the early years, just after he left, mum had $30 in the bank and was not working at the time. We were eating dinner out at the homes of friends and family every second night because Mum could not afford to put a meal on the table every night of the week. So I thank our dear friends and our dear family, who I acknowledged in my first speech in this place. They helped us out during those very, very difficult times. It was not just for a short period of time; those difficult times went on for about two years, when we were eating out every second night at the homes of family and friends. Again, I thank those people. They know who they are. I love them dearly, and I again want to thank them for getting us through those tough times.

I was reminded about how my sisters and I could not afford to go on school camps and about seeing friends go off on school camps but Mum could not afford to send us. I know what it is like to be the child of a single mother, and I know what it is like to be the child of a single mother who is doing it tough. That is why I oppose this bill and these cruel cuts, which are targeted at single-parent families.

In the last couple of weeks, children across Australia have gone back to school. As we celebrated the start of the 2016 school year, I reflected on my own back-to-school experience growing up. Despite our financial hardship, my mother would save all year so at the start of the school year my sisters and I would get a new pair of school shoes. At the time, as a young girl, this annual shoe-shopping trip was not a pleasant experience, because I was filled with envy and despair—envy of my friends who got the fancy Mary Janes with the little heart shapes on them or the school shoes that left tiger paw prints on the ground as you walked; I think they were called Adventurers and the Mary Janes with the little hearts were called Lipsticks. I really, really coveted those shoes. Despite that, my shoes had to last for a whole year—as did my sisters' shoes. So we got the very sturdy and the very utilitarian basic issue shoes with laces and round toes, and that was about it. There was not much excitement about our school shoes. They were the most economical school shoes that mum could afford, and they had, as I said, to last for a full year. So, each night, we had to polish them and we were not allowed out the door if they were not polished. I talk about these sorts of experiences because they really do make me empathise with those people who are going to be experiencing these cuts from this government. It is only really as an adult that I realise what enormous sacrifices my dear mother had to make for us to meet the most basic school needs.

As I said, I know all too well the pressures of a single-parent household. Yet a lot has changed since that time. When my father left, there was no such thing as the Child Support Agency let alone the family tax benefit. So we relied, as I said, on the generosity of friends and family. But what we do know—what we all hear every day when we are out and about in our electorates—is that single parents are still doing it tough. Just last month I received an email that exemplified this from a single mother. She was writing to me about the cost of parking at her work, which had recently increased. This increase was going to be enough to break her carefully planned, carefully managed weekly budget. Now in her email she was despairing at this increase in the cost of parking, but what I read was that the parking was simply the straw that broke the camel's back. If your budget is so tightly configured that an increase in parking costs can break you, then times are tough. There are many people out in my community, as there are right throughout Australia, for whom an increase in parking costs can send them over the edge. It is really painful to receive those letters and to speak to those people—women, particularly—who have all their budgets mapped out in an Excel spreadsheet. A number of them that I speak to have spent time talking with their mother or their father to try and get their budget under control. Every penny is accounted for; every penny is saved. They are just trying to do their best by their kids, they are just trying to get them through school, they are just trying to keep a roof over their heads and they are just trying to keep food on the table. They do it tough, and every penny is watched.

As I said, this is the reality for many single parents today. I am sure that every member in this place from every side of the chamber knows this. They have met those single parents in their electorates who are struggling to make ends meet, and an increase in parking costs can send them over the edge. Yet with this legislation, this Turnbull government is seeking to make things even tougher for single-parent families. Under this bill, there will be a reduction in family tax benefit part B for single-parent families when their youngest child turns 13. There will be around 136,000 single parents with children aged over 13 who will have their family tax benefit B reduced to $1,000 in 2016—a cut of around $1,700 a year. Single parents with children over the age of 16 will have their family tax benefit cut entirely, and that means they will lose $3,100.

Some of my colleagues have pointed out—and I agree with them—what will this mean for the 16-year-old child? Will they stay in school, or will they feel pressured to leave school to start work to earn some much needed money for their family? I echo my colleagues' concerns that this measure could be a disincentive for 16-year-olds to stay in school for their final two years. This government goes on about the innovation nation. So much for an innovation nation when people are having to pull out of school and cannot even build their skills to take part in that future in an active and productive way.

But it is not just single-parent families that are being targeted with this bill. Over two years, there is also going to be a rapid phase-out of family tax benefit A and B end-of-year supplements. The family tax benefit A supplement will be reduced to $602.25 from 1 July this year, then to $302.95 from 1 July next year and abolished entirely the year after. This will impact 1.5 million Australian families, and we know that around 500,000 of those families are on combined incomes of less than $50,000 a year. The impact of these cuts will be compounded by cuts to family tax benefit part B, which will be reduced, as I have mentioned, in a range of ways.

But, among all of the cuts in this bill, we can also see the reintroduction of the baby bonus—a new baby bonus in the form of a new rate of family tax benefit part B that will be introduced for families with children aged under one. Despite all of this government's rhetoric about simplifying the welfare system, despite the government's rhetoric about budget repair, despite the rhetoric and that famous line that 'the age of entitlement is over'—a new baby bonus! Deputy Speaker Mitchell, can you believe it? This bill just defies logic.

Labor has demonstrated time and time again that we are not opposed to fair and reasonable changes to family payments. We have already accepted around $2.5 billion in savings from the family payments system since the 2013 election. We have also agreed to $500 million in savings that restrict eligibility for family tax benefit part B. But we will not support those measures that target the most vulnerable in our community—and this bill does just that. Labor has fought hard to protect these families and we will continue to do so, because the measures the government has proposed are fundamentally unfair. Because of Labor's campaign, the government has backed down on two of the measures from last year's budget—their plan to freeze family tax benefit rates and certain eligibility thresholds. And because of Labor's pressure, the Turnbull government finally scrapped its appalling cuts to grandparent carers, which was absolutely outrageous.

I want to echo the words of my colleague the member for Jagajaga, who, in her contribution on this bill yesterday, implored the Prime Minister that 'enough is enough'. Enough is enough, Prime Minister. These changes to family payments will result in families being up to $5,000 a year worse off. How is this fair? How is this equitable? This bill demonstrates just one thing: it does no matter who leads the Liberal Party, the policies remain the same. We have seen again and again that the policies of this government target those who can least afford it. This government targets low- and middle-income families and, in this case, single parent families. Think of the children of those single parents. They are being targeted as well. Enough is enough, Prime Minister! Labor will not support these cruel cuts and nor will the Australian people.

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

It is always a pleasure to follow the member for Canberra, who, despite being on the other side of the chamber, is a good friend. Some of the comments made by the member for Canberra require a little illumination, because the interesting thing about this debate on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015 is that nowhere have those on the other side mentioned the purpose for which the supplement was introduced in the first place.

The supplement was originally introduced for the purpose of minimising the amount of debt people got into as a result of fluctuations in, or overestimations or underestimations of, their earnings during the course of the financial year. The supplement was utilised to ensure that they did not finish up with a debt at the end of the financial year if they did not properly calculate the income they were going to earn. So the supplement was there for a very specific purpose. It was not there to become part of or a fixture of the family tax benefit part A or part B system. The necessity for these changes has been well articulated by my colleagues on this side of the House in terms of their seeking to repair the damage to the budget and the finances of this country left by those opposite after their six years in government—the Rudd-Gillard-Rudd government.

This bill contains three measures that are, importantly, aimed at creating long-term sustainability for our family payment system while continuing to deliver help to families who need it most. It was mentioned by a colleague earlier that our family support system totals some $28 billion a year—$20 billion in family tax benefits, another $6 billion in child care and some $2 billion in paid parental leave. I think it is safe to say that we live in a country where we are lucky to be able to support those people in our community who need it most. I think it would be fair to say that our family support system of family tax benefits, childcare benefits and paid parental leave is one of the most generous and broad ranging in the world. I recognise that there are many families in my electorate who rely on family tax benefit payments to assist with the day-to-day costs of raising their children. We as a government well recognise the importance of families being able to raise happy, healthy children, because they are the next generation of this country. As the next generation that is going to take this country forward, one of the things I do not want to see happen is it being left with an enormous burden of debt. That is part of the reason for trying to get the budget back into order now. It is so that we can continue that process of budget repair and not leave future generations a legacy of debt and deficit. Not only that; the savings generated through this bill are not being squandered, as they probably would have been by those opposite, but rather they are going into another package of measures to support families.

Just to cover off on some of the changes in the package: the first measure is to increase the family tax benefit part A fortnightly rate by around $10 for each family tax benefit child in the family aged up to 19 years of age. The second measure amends the rules and introduces a new rate restructure for the family tax benefit part B. The third measure will phase out the family tax benefit part A and part B supplements. This family payment reform package will, as I have said previously, greatly assist in the important task of repairing the budget, and it will also help pay for the government's $3 billion Jobs for Families child care package. With the many things that the government are doing, you have to look at the totality of the packages that we are putting together to improve the budget and the services and support that we provide to families—it is not just one or the other.

This bill seeks to continue the budget repair process. The government has already passed a number of changes which limit family tax benefit part B for couples, other than grandparents, when the youngest child turns 13. I acknowledge that those opposite have contributed somewhat to the task of budget repair; but, as we all know, there is far more to be done in terms of the savings that we have legislated through this House and that have been held up in the Senate

If they saw fit to pass those bills, it would continue to make the process of budget repair so much quicker and more efficient for everyone concerned.

As I touched on, this bill proposes to increase the Family Tax Benefit Part A by around $10 a fortnight from 1 July 2018, as well as increase the fortnightly rates of Youth Allowance and the Disability Support Pension to align with the new Family Tax Benefit Part A fortnightly rates. Around 1.2 million families across Australia, including those on income support, will receive the fortnightly increase to assist them with day-to-day living expenses. Under the second measure of this bill, the Family Tax Benefit Part B payment structures will be reformed to provide more support to families when their children are born and better encourage workforce participation when the youngest child is older and their ability to participate in the workforce is enhanced. From 1 July 2016 the standard rate for Family Tax Benefit Part B will be increased by $1000 a year for families with a youngest child under one, helping some 142,000 families. The current standard rates will be maintained for families with the youngest child aged between one and 13. The standard rates will also be maintained for single parents who are at least 60 years of age and grandparents and grandparent carers with the youngest child aged between 13 and 18. A reduced standard rate of $1000 will apply to single parent families where the parent is under 60 and the youngest child is aged between 13 and 16 to encourage better workforce participation.

The government acknowledges the important role of parents as the primary carers of their children, and, as I have touched on earlier, it maintains a range of programs and payments to support them—all up, at a cost of some $28 billion per annum. We continue to focus on ensuring that we provide these support systems to families in our community, as it is incredibly important that they have that there.

The third measure the bill proposes is to phase out the Family Tax Benefit Part A and Part B end-of-year supplements. These supplements will be reduced in 2016-17 and again in 2017-18 before being abolished in 2018-19. For the benefit of those opposite, the supplements were introduced to mitigate the risk of debt after reconciliation of people's financial affairs at the end of each financial year, but with the introduction of the single tax payroll in 2019-20 most employers will be participating and the need for the end-of-year family tax benefit reconciliation will be greatly reduced. The single tax payroll will be rolled out through 2017-18 and 2018-19, and this will result in the reporting of families' real-time income. We believe this will minimise the risk of underreporting income and subsequent debts. Therefore, we see the supplements, which were there to mitigate the risk of debt, as no longer required.

The government believes these are sensible changes aimed at ensuring sustainability of the family payment system and continued support to families who need it most now and into the future. It is by continuing to focus on ensuring that we maintain a sensible, long-term system not just for those who are receiving benefits today or tomorrow but for those who will or may require those benefits in the years to come. In addition, these savings are being reinvested in a childcare package to support families and encourage work force participation. I commend this build the House.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It is always a great pleasure to follow my colleague, although I do feel sorry for the people in the gallery—they must be pretty bored after that presentation. This bloke could bore for Australia; he could get gold medals—whereas, as the assistant minister knows, I always provoke a reaction from the other side of the House. That is because I like to point out this government's problems. We know they have a problem. Since they have been in power, they have basically attacked families, attacked the working class, attacked the middle class and they have turned their backs on progressive voters everywhere.

Look at their agenda. A GST—they have flown the GST kite; it has gone up, spun around a few times and then the Prime Minister brought it down; it hit the ground and now the Treasurer is trying desperately to stick it up in the air again. We know what they want to do on penalty rates; they want to go after people's penalty rates. We know that is part of their agenda, and we know that they are after Medicare—cuts to pathology and now they want to privatise the administration of Medicare. Believe you me, that is just the beginning of their attempts to privatise it. We know about the horror 2014 budget—$80 billion worth of cuts and Medicare under attack by GP co-payment. That GP co-payment would have cost $7 not only every time you saw the doctor, but every time you went to the pathologist or every time you went for a blood test or a scan. They were going to charge $7 dollars a time. Now they have resorted in the latest budget to cutting GP rebates, and so they are doing it by stealth. They are forcing every general practitioner and every pathologist in the country to turn into a de facto tax collector by cutting the rebates they get.

We have the slowest wage growth since I do not know when, but it is slow—ask anybody out there on the street about their wages. We know people who rely on penalty rates for their weekly income—and when banks ask for that as part of your loan application you know that it is an important part of people's income—we know the government is giving no security about that. Pensioners also came under attack; we saw the pre-reformed version of this government go after pensioner concessions. I mean how bad do you have to be to go after pensioners and their concessions? In South Australia we saw some $18 million in concessions ripped out. Interestingly enough, one of the manifestations of that is the suspension of the train between Adelaide and Melbourne, because the ripping away of those concessions destroyed the market for that train.

This is a completely divided government with a menacing agenda for the Australian people. We heard this lot's rhetoric before the last election; we heard about the perils of divided government—and I have been on the record in this House many times before as saying you should not remove a first-term prime minister. They swore they would never do it—they ran around the country telling us all about the great sin of removing a prime minister in the dead of night—and then they removed not only a prime minister but also a treasurer, an industry minister, a defence minister and the majority of the National Security Committee of Cabinet. And they shuffled various other people around. There is a new communications minister and there is a new infrastructure minister. I cannot keep count. We also lost a couple of ministers over Christmas—and we are looking down the barrel of getting a hat-trick. So we know that this government's record is simple terrible.

And what are they doing in this bill? They are trying to balance the budget. The former Treasurer, Mr Hockey, is now the Ambassador to the United States—and we all wish him well there. But what did Mr Hockey try to do? He tried to balance the budget on the backs of working people. What did he say before the election? He said that he would get us back into surplus straightaway. I think that is the impression he gave. Certainly, that was the impression that was given in my electorate—that he would just click his fingers and we would be back in surplus, that we only had to vote Liberal and the rays of economic sunshine would descend on us all!

But what do we get now? They have pushed up debt and borrowings. The budget has blown out. We heard a lot of tough talk before the election. But what are they doing after the election? They are cutting people's incomes. Under this bill—

Mr Ewen Jones interjecting—

This is just a preamble! It is nice to know that I have got at least one fan, the member for Herbert; and we often have a bit of a debate in this building. But, would you believe it, this bill is actually worse than Tony Abbott's bill; it is worse than some of Mr Abbott's cuts. So 1.5 million families are going to lose their family tax benefit part A, a cut of more than $700 per child every year. Around 600,000 of those families are single-parent families. I grew up in a single-parent family. My mum was a teacher. It is very tough when you are a single-parent family. It is interesting. I will give you some figures later about how this might affect my electorate. This is a very cruel thing to do to families who are working very hard. And we know that they do their best to remain in the workforce and literally raise their children single-handedly. Around 500,000 of those families are on the maximum rate. That means they are on a combined family income of less than $51,000 a year. And 1.3 million families will lose family tax benefit part B, a cut of more than $350 per family every year. Of course, single-parent families are again hit harder. They will have their family tax benefit part B reduced to $1,000 per year when the youngest child turns 13 and entirely cut off when that child turns 16.

Think about the consequences of that in the real world. Anybody who has actually lived in the real world, anybody who has tried to get by on a working income or tried to raise kids, would know it is incredibly tough. But I will tell you who is not in the real world, and that is our new Prime Minister. He has been in power for all of 141 days, thanks to the cowardice and betrayal of those opposite. And we know how they all plotted—not the people in the room at the moment. I do not think the member for Herbert was part of those shenanigans. No doubt he was sunning himself up there in Queensland, and he is a pretty straight shooter. But I can tell you that there are some people sitting on the frontbench who are not straight shooters. They all met at in Queanbeyan like a pack of thieves in the night.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

The bill?

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I will tell you about the bill. But there is an interesting thing first. In the electorate of the member for Wentworth, the person they installed as Prime Minister, there are 3,003 recipients of family tax benefit part A and 2,712 recipients of family tax benefit part B. In my electorate, there are 17,008 recipients of family tax benefit part A and 14,676 recipients of family tax benefit part B. My electorate is the real world; it is not where the Prime Minister lives. With all due respect to the member for Wentworth's electors, who I am sure are lovely people, they do not live on the edge—where family incomes are so precious, where people live from week to week.

When you represent one of these electorates, you are constantly aware of just how tight people's budgets are. So you would not try and balance the budget on their backs; you would not put the burden of revenue raising or of making efficiencies in government on their backs. Yet this is what this government is doing. And we know what they promised at the last election. They promised that there would be no cuts and they were going to get rid of the carbon tax and the mining tax. The carbon tax lost about $6 billion in revenue. They gave that away. They were going to have a budget surplus.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Fix the budget.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

They were going to fix the budget—thanks very much. And we were going to have 'adult government'. That was a promise I remember. And what have we had? We have had a divided government. We know what the Prime Minister, the member for Wentworth, did when Mr Abbott was Prime Minister. We know what he did at the cabinet table. Mr Abbott was coming up with one crazy idea after another—$80 billion worth of cuts. What did Malcolm Turnbull do? He just sat back in his chair. When Mr Abbott wanted to introduce the GP tax, what did Malcolm Turnbull do at the cabinet table? He just sat back.

I understand that people were so relieved to get rid of the member for Warringah, who will be seen forever as a kind of accidental Prime Minister—people will always regard him with this kind of odd, 'What was going on there?'—and see Malcolm Turnbull turn up that they were inclined to give him the benefit of the doubt. But we now know that he does not deserve it at all, because what is he trying to do? He is trying to alter the GST. And who does that affect? It affects people on fixed incomes—pensioners, who were robbed of their concessions—and low-paid workers who are not in the tax system. They are not in the tax system in effect because Labor tripled the tax-free threshold and took thousands of workers out of the tax system. People who are working hard but earning less than $18,000 a year cannot be compensated for the GST at all, and some of those people are the families in my electorate that I mentioned before who are in receipt of these family tax benefit payments.

You have to remember that these payments—family tax benefit A and family tax benefit B—were introduced by the Howard government. Their predecessor, the Hawke government, brought these things in. There has been a long history of Labor in government making payments to families to make sure that family budgets are secure, and that is good for the country. Interestingly enough, John Howard knew it was good for the country too. He knew it was good for the stability of the family unit.

What do we have here from the government—this divided, treacherous bunch, who cannot keep their word and who have not fulfilled one single commitment that they gave to the people at the last election? They promised a united government but gave us a divided government. They promised an adult government but we have these juvenile games. They promised to balance the budget but they did not balance the budget. They promised not to change the GST, but will probably—maybe, I do not know—be changing the GST. They said that workers' wages would be okay, but of course they are after your penalty rates. They said that Medicare was okay but of course they are hacking into doctors' rebates. So we know what those opposite are up to.

Steven Ciobo (Moncrieff, Liberal Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I'm getting depressed.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

The minister says that he is getting depressed listening to me. I would be depressed. Frankly, I would be embarrassed if I were him. Assistant Minister, are you in line for a promotion? We know there is going to be a reshuffle when the Leader of the National Party finally has enough numbers to knock off Barnaby or at least to install some restraint upon him.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

You have 90 seconds left, Nick.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Yes, 90 seconds. So the reshuffle is in train. I know my good friend opposite will be one day a minister. He was in the shadow ministry many years ago. He was unfairly turfed out.

Steven Ciobo (Moncrieff, Liberal Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I'm actually a minister now. I didn't bother correcting you.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Are you a minister now? You are an assistant minister though, aren't you? That is not a minister; that is a parliamentary secretary, that is what they actually call them. But to return to the bill: this is an egregious attack on families. No amount of interjection and comedy from those opposite—and we know the member for Herbert is a comedian—and no amount of chicanery or joviality will mask that this is an attack on families. It is an attack on their budgets. It is an attack particularly on people who live in my electorate and work hard and rely on every dollar every week just to get by. That is why this bill is being opposed by the Labor Party and that is why it should be opposed by the Australian people.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Just to clarify: Mr Ciobo is in fact the Minister for International Development and the Pacific.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I like the member for Wakefield. I am always glad when I am in here with him, but he said that the member for Forde had bored him to death when the member for Forde spoke to the bill—he understood exactly what the bill was about and had reasoned debate about the bill. We also sat here as the member for Wakefield did his best impersonation of the member for Shortland—15 minutes of fill; 'Can we get through to half past six so we can all go to dinner?' That is what the member for Wakefield did. No-one in this country is any wiser after those 15 minutes. I would rather put out cigarettes on my eyes than go through that again.

I rise to speak on the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. The package includes increasing family tax benefit part A fortnightly rates by about $10 for each FTB child in the family up to the age of 19. It also seeks to amend the rules and introduce a new rate structure for FTB part B and to phase out the FTB part A and part B supplements. These are the changes we are making but in my contribution today I would like to concentrate on supporting the notion that governments must live within their means. I see no better example of where governments can do this than our work on the family tax system. This is the part of our social security system that people in my electorate raise with me most regularly. Those who have it do not want to lose it or have it changed and those who have never got it cannot see the sense in it. This is one of the reasons I came to this place. The reforms in this package must be at the forefront of any message we as parliamentarians—not just in the Liberal Party or the LNP—send to our constituents when it comes to living within our means.

The family tax benefits scheme, which we are dealing with here, was a Howard government initiative. It was his government's way of saying thank you to the people who had done the hard yards when it came to repaying the $96 billion Labor black hole from the Keating period. These are the families who backed the Howard government when it came to the introduction of the GST. These are the people who went about their work and did the heavy lifting to get the budget back into surplus. We need their help again.

Whilst we have an economy that remains in good shape we have a country that seems down on confidence as we transition from the construction phase and the mining boom. My city of Townsville is a prime example of that. We also see a budget that is under great strain and we have structural issues around this budget that must be addressed. And this is part of it.

Just like every family, government should live within its means. There are times when you will spend more than you earn. For those of us who have children, you know what I am talking about. The member for Wakefield spoke about being brought up in a single-parent family. I was a single parent for a very short time myself and when I remarried we had a child straight away, so we had an extended period where we only had one income. I understand. It hurts. It does not matter what your suburb is, it hurts. For government, the first stimulus package when the GFC hit is a prime example of spending more than you receive but for a purpose. We spent more than we earned but it was for a good reason. Now, however, we need to get our budget back in order.

I do not want to oversimplify the issue. Our budget is a very big deal and incredibly complicated. But we also have an opposition that talks a good game, when it comes to savings measures, but it opposes just about everything we do to bring order back into the system. Here is a prime example: all of us, here, want the budget to be in order or, at least, we should. I discount the Greens and the crossbenchers. They do not, really, have a role here. But there are two sides of this parliament who get control of the Treasury benches. They are the ones who believe, in the long term, that you should live within your means and grow in the term of the cycle.

We all understand that we have philosophical differences on how to get our budget back into order. That is the nature of the place and that is the system of our politics. That is why people change governments, from time to time. But when you win an election with one of your four key pillar promises being to fix the budget mess, you should not be unduly hindered in your work to do just that. Let the people decide what sort of job we do—not the Senate.

This is the central issue in the debate today. We were elected to fix the budget. To that end, there are two sides to any budget—be it a multinational conglomerate, a small business, a family, a P&C or a single person. There are just two sides to your budget that need to be addressed: you have income and you have expenditure. That is all. Anyone in business will tell you that the only thing you can control is your expenditure. What we are trying to address, here, is sustainability of support now and into the future. Budget repair is vital.

Getting people ready to work and supporting them in that pursuit is also vital. This bill works alongside our $3 billion Jobs for Families and childcare package. I understand the other side has a philosophical bent against this but, gee, we won the election, guys, and you should be prepared to back us on that. There are those who believe that the family is sacrosanct and should be supported. There is certainly a case for that. But, at the end of the day, what we as the government must do is use our best judgement. We earned the trust placed in us by the people of Australia to right this ship and get it heading in the right direction. We deserve to exercise that right. What we as a generation must do is decide if we are to be the ones who draw the line in the sand and say, 'We can fix this. This is our job.' Or do we just continue down the path of borrowing each and every day and run programs that allow people to not work or participate in our society?

From my perspective, just because the Whitlam, Fraser, Hawke, Keating and Howard governments drove down the road handing out cash to everyone—for everything—it does not mean we should, could, or even can do the same. We speak a lot about the lives we want to make for our children, the next generation. We can start with this. Our system of social security benefits and family payments has become a nightmare for all who try to navigate the system. As a one-time participant in this, it is an absolute nightmare. All of us in our electoral offices are besieged by people with problems with this system. The poor men and women at Centrelink are continually challenged to explain our latest manifestation of the social security system to a population who just stand there, with their eyes glazed over, getting more and more confused by this system. The money handed out through the social security system is taxpayers' money. It is not earned by the recipients. It is not free.

Since being elected, the word I have come to hate the most is the word 'free'. It drives me deadset batty. We want free internet. We want free education. We want free health. We want free access to roads and bridges. We want it all for free. But nothing is free. Even our opinions come at a cost to the education system. It all costs cold hard taxpayers' cash. The cost of our social security system is over $150 billion each and every year—and growing. And I am using round figures, here.

The average Australian wage in 2015 was $74,724. That means that our social security budget is more than two million times that of the average wage. That is every year! The biggest ever Australian Lotto jackpot was $80 million. Our social security budget is 1,875 times larger than our biggest ever Lotto win. That means that if you were lucky enough to win $80 million in the Lotto each and every week you would have to do it 1,875 times—in a row—to get one year's social security payment. That is more than 36 years of winning the Lotto—at $80 million a week—to equal one year's social security. And that is just this year. We, simply, have to do better or we will lose this fight.

I have three children. My eldest is telling me that she is not really interested in superannuation or social security. Her reasoning is that no matter which side is in power, eventually, we will just see it as a big bucket of money and tax the living daylights out of it. She is 22

When I was 22 I reasoned that by the time I was 65 there would be no pension, and superannuation was vital. It looks like I might be wrong on the prediction about the pension, but I was right on superannuation: it is vital. But the message we have got from people out there who should be interested in this thing is that it is all too much. We have made everything so complicated and so overwhelming for people. It is time to send the basic message from government that we can live within our means.

We are not helping anyone by deferring the decisions on our budget's sustainability. If we lose our ability to run our own budget, the ability to run the country is lost soon after. That is a long way down the track, so I do not want to sound alarmist here. But it takes a long time to turn a big ship around. It will take hard work as well.

What we are after here is a change in the mix and the reason for people receiving the benefit. What we are after here is participation in the workforce. That is why the payment system must be addressed. That is why we need to look at how we, as a government, do business and work our capital. We should be asking ourselves these questions every day: are we doing everything we can to get people in work; are we working government capital hard enough; is this capital washing through or is it just some levels of our economy which are getting the benefits?

These are the areas on which we must focus. These are the areas we need to address if we are to live within our means. Saying it is too hard is too easy. You will see the other side continually say that they are for working families and it is all too hard and we have got to find other areas and we will put it off and it will be a tobacco-excise-led recovery and all that sort of stuff that they will go on. At the end of the day you have to pony up and make the decisions. Telling each other that others can pay and that it is all right for you to keep on getting it but somebody else can pay is all so easy. What is hard is standing up and saying that we are all part of the answer. We can all be part of the solution, but it will mean that we have to make decisions. The hard part about making decisions is that some will not be happy with the outcome.

The family tax benefit scheme was a fantastic way of saying thank you to families who stood with John Howard and his government and did the hard yards from 1996 to 2007. In those days our government was assisted with rising terms of trade and the first mining boom. We had rivers of gold coming into this place. We have a different set of circumstances today and we must recognise this and act accordingly. This is where the hard work must be directed.

These changes are necessary. These changes are fair. They recognise where we are in the economic cycle. They encourage participation in the workforce. They are, to me, a good start.

Before I commend the bill to the House, I would just like to make one final point. Yesterday on one of these other social security measures we had the member for Denison and the member for Melbourne divide on a bill that had bipartisan support. We divided on saving $40 million out of the social security budget over the forward estimates. That is $10 million a year that they were prepared to say is too much out of a budget of around $160 billion. That is what the crossbenchers are up to here. It is the ultimate in populism to sit there and say, 'We voted against it because we think everything's fine, and if we could just get multinationals to pay an extra $2 billion everyone would be okay.' The numbers are a lot bigger than that and a lot tougher than that, and if we do not start the work it will never get done. If we keep on passing the buck to the next parliament it will never get done. This is a good start, and I commend the bill to the House.

Justine Elliot (Richmond, Australian Labor Party) 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 (No. 2) 2015. This bill is yet another example of the Turnbull Liberal-National government's continuous attack upon families. We see it on so many different occasions, and this comes on top of many other harsh measures that have impacted families right across the country. In fact, this bill continues the trend of budgetary cuts affecting families and, indeed, the most vulnerable in our community. At the base of it, these cuts are fundamentally unfair. In terms of the impact on families, these measures comes on top of other harsh cuts such as the government's $80 billion cuts to health and education.

These cuts are particularly detrimental for those people living in regional and rural areas. If we look firstly at health costs and the cuts to the health budget, we know that when it comes to health the costs are much higher in the country areas. So those cuts of over $50 billion to health are very damaging in terms of accessing services for those in regional and rural areas. We tend to feel that so much more than people in the cities.

As for the education cuts, the $30 billion in cuts means that children just cannot get the education they deserve—or the opportunities that they deserve as well. That is why our plan that has been announced, 'Your Child. Our Future', is so important for the future educational needs of our nation's children. We need to make sure that they are able to access their full educational opportunities. We are fully funding the Gonski reforms on time and in full, investing more than $37 billion in this particular plan, because we understand how important it is to invest properly in the educational opportunities for our children into the future.

We also have many concerns that we have mentioned many times in this place about this government's plans for $100,000 degrees. Again, it makes it so much harder for students from regional areas. It is already hard for them to access university, and this makes it so much harder.

So much of what we see from this government is blatantly unfair. We have heard the Prime Minister say not too long ago that his approach to family payment changes would be all about fairness. In this legislation single-parent families will be around $5,000 a year worse off. It is another case of saying one thing and doing another. We seem to be seeing a lot of that lately.

How can you then trust a Prime Minister when he talks about fairness yet wants to take $5,000 away from the budgets of those low- and middle-income families? It is for those reasons that those of us on this side of the House will be opposing these cuts and opposing this bill. We oppose it because we believe in fairness. That is what we believe in. That is what we are fighting for. We believe in putting people and families first. We believe it is important to do that.

As I said, this is a Prime Minister who always says one thing and does another. The potential increase in the GST to 15 per cent is a great example that we have seen, particularly over the last few weeks. He may have pretended to say in the last week that he was not convinced about it, but how could you trust him? Every day he changes what he says. We know that those on the other side of the House want to see an increase in the GST to 15 per cent, but how could you trust this Prime Minister and the government to keep their word about anything after their record in the past 2½ years? They are all over the place most of the time. Families in my electorate of Richmond, on the New South Wales North Coast, are very concerned about the government's plans for the GST and how it will impact and hurt them, particularly many people on fixed incomes. Over 20,000 pensioners are very concerned about the potential increase in GST to 15 per cent—a GST on everything really does worry them so much. Indeed, so many families are concerned about an increase in their costs of living.

We have seen from the government over the last few days complete and utter chaos when it comes to their plans for a 15 per cent GST. They have so much internal division and such a chaotic approach to all forms of tax reform; they are just all over the shop. Yet, yesterday, the Prime Minister said in question time he would not rule it out, so we know it is back on the table again. We have also heard the finance minister and the Assistant Treasurer refusing to rule out a 15 per cent GST. The reason they are not ruling it out is that it is on the table; it is what they want to do and intend to do. No matter what sorts of weasel words they use here and there and their chopping and changing, they will not rule it out, so we know it is on the table, just like so many other of their harsh measures.

When it comes to these harsh measures—the attack on family payments or the cuts to health and education or the 15 per cent GST—in my regional area, on the far North Coast of New South Wales, people blame the National Party. As I have said before, National Party choices really do hurt regional and rural Australia, and a 15 per cent GST will definitely hurt the people in my region, just as the $80 billion in cuts and the cuts to family payments will hurt. Let us remember that the National Party represent some of the lowest income electorates in this country, and yet National Party members are prepared to take thousands of dollars out of the pockets of those people on those lowest incomes. The fact is that this is going to come out of the pockets of some of the poorest families across the nation. That is where it will come from if the National Party get their way.

The measures contained within this bill will hurt families, and that is why Labor will be opposing it. Labor has always stood up for families and will continue to stand up for them against the current government. Since their first budget, in 2014, we have been fighting the Liberals and Nationals' unfair cuts to families. They just seem to keep on going. In the 2015 budget, the government again went after families with a range of very savage cuts. Again we fought those changes because they were fundamentally unfair. They would have seen low- and middle-income families lose thousands of dollars each year. We have been very proud to work very closely with so many sections of the community to fight against the government and force them to back down on many of the measures in last year's budget. We were very proud to stand with the community and force the government to back down. Another example is that, because of Labor's pressure, the Turnbull government had to finally scrap some of the appalling cuts to grandparent carers that were contained in the budget. Because of this pressure, Australian families are being protected from some of these harsh and unfair cuts. I think measures like this and the plans that the government had for cuts to grandparent carers really show how out of touch the government are with the concerns of ordinary Australian families, but I am pleased to say that Labor have been able to get some concessions from the government. We were able to get exemptions for around 4,000 grandparent carers from the cuts to family tax benefit B, which would have applied when the youngest child turns 13. But we should not forget for a minute the rather appalling way in which the government were prepared to treat grandparent carers. Of course, the members over there voted for this. They supported it and, indeed, the Minister for Social Services stood up in this place during question time and told grandparent carers that what they needed to do was go out and get a job—that is what he told them. It was very offensive and out of touch. That certainly seemed to be the government's approach, and, indeed, it still continues.

The Prime Minister's cuts continue to fail the fairness test. Since that first budget, we have been calling on the government to go back to the drawing board when it comes to family payments and come back with some fairer savings that will not impact and hurt so harshly those low- and middle-income families that the government seem to be after all the time. This latest version of cuts to family payments, quite frankly, still is not good enough. They again fail the fairness test. The Prime Minister's new cuts to families will leave some families worse off than the previous Prime Minister's cuts would have done. This is despite the many promises we received before the last election. We all recall those Liberal and National party candidates running around saying there would be no cuts to education, no cuts to health, no cuts to family payments and no increase in the GST—all those sorts of things—yet all we have seen since then is a massive array of cuts. No wonder people feel very betrayed by the government when they look at the extent of their cuts.

Let us have a closer look at some of the changes in this bill. One point five million families are going to lose their FTB A supplements, a cut of more than $700 per child every year. Around 600,000 of these families are single parent families. Around 500,000 of these families are on the maximum rate, meaning they are on a combined family income of less than $51,000. Three hundred thousand of these families will not get the increased FTB A per-child amount, which does not start until 2018, two years after the supplements start to be reduced. One point three million families will lose their FTB B supplements, a cut of more than $350 per family every year. Single parent families will be hit even harder, having their family tax benefit B reduced to $1,000 per year when their youngest child turns 13 and then cut entirely when their youngest child turns 16. This impacts around 136,000 single parents with children aged 13 to 16 with a cut of around $1,700. Single parents with children aged over 16 will have their FTB cut entirely in 2016, a cut of more than $3,100. So the measures in this bill are quite harsh.

When it comes to fairness, this Prime Minister is, in some ways, probably even crueller than the last. When we look at it overall, this is a Prime Minister who is refusing to make multinational companies pay their fair share in tax. He refuses to curb very generous tax concessions for wealthy superannuants. These are very reasonable policies that we put forward, but, no, instead over there the Prime Minister and his government would rather be taking money from the pockets of ordinary families and then hitting them with a 15 per cent GST on everything. That seems to be their plan.

Many organisations have spoken out about this bill and its impact upon the most vulnerable in our community. Jo Briskey, Executive Director of The Parenthood, said in October last year:

… the new package still leaves thousands of families losing a significant amount of support that they currently depend on.

She went on to say:

We remain fundamentally opposed to the notion that you have to take from one family in order to give to another …

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.

…   …   …

Families cannot afford to lose out here and nor should they.

In responding to this bill, ACOSS has urged against looking for budget savings in family payments for single parents and low-income households. The ACOSS CEO said:

Single parents and their children have already been hit hard with cuts over the last few years which have reduced their safety net significantly.

On the latest analysis, there are over 600,000 children living below the poverty line and children in single parent households are in poverty at over twice the rate of children living with two parents.

The proposed changes will also hurt low income couple households, including those without paid work. The $5 per week increase to Part A will not offset the losses for these families.

We are also disappointed that the proposed package does nothing to address the gradual erosion of family payments as a result of indexation to prices.

So a range of different groups are really concerned about this government's harsh changes and the impact they will have particularly on single parents. Many workforce experts—such as the National Foundation for Australian Women, Equality Rights Alliance, economic Security4Women and the Work and Family Policy Roundtable—have stated that whilst this latest bill is less appalling than the government's original proposals, the revised reforms are unlikely to have a significant effect on workforce participation, particularly in those states and territories with high unemployment. This is especially true in regional and rural areas where we do have very high levels of unemployment. It is only going to make it harder for so many of those people, and single-parent families will be in a much more difficult position.

Labor have demonstrated that we are not opposed to changes that are fair and reasonable, and we would be happy to work with the government if they did have fair and reasonable changes, but we are not going to support unfair and cruel measures such as the ones outlined in this bill. That is the reason that we will be opposing this bill. As we have said, it is not just the attack on families; it is the cumulative attacks that we have seen from this government right from their very first budget. We have seen it with their cuts to health and education. Speaking as a member from a regional area, the government's cuts and plans are so much more severe for areas like mine.

One area that we have not touched on yet is this government's plans for cutting penalty rates, which will severely impact on families in regional areas. So we have got the cuts to health, education and family payments coupled with their plans for a 15 per cent GST and their plans to cut penalty rates. Those things impact families across the nation but they impact families in regional and rural areas a lot more harshly. They are the ones who will be feeling it the most, and it is the opportunities for future generations that are taken away. This government seems absolutely committed to making it harder and harder for people, and I can tell you that people in regional and rural Australia are struggling. It is the National Party choices that hurt the most, and in the country we blame the National Party for its harsh attacks upon families.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015. I just listened to the member for Richmond speak to the bill, and I would remind her before she leaves the chamber that we are spending $12 billion a year on interest from the Labor debt, which could be well used to support the families of Australia. That is the legacy they left us. It is interesting to note that most of her speech was focused on the proposal around the GST, which is not what this bill is about.

This bill introduces a package of new reforms that will secure the future of family support payments for those who need it the most while also encouraging parents' participation in the workforce. As the minister said:

The new package will supersede measures stalled in the Senate, including:

maintaining FTB payment thresholds, where savings were estimated at $525 million;

maintaining FTB payment rates, where savings were estimated at $1 billion;

limiting FTB Part B to families with children under six, where savings were estimated at $1.8 billion; and

revising the FTB end of year supplements to their original value of $600 and $300 per year, where savings were estimated at $1.3 billion.

The minister went on to say:

The two bills anticipate withdrawal of the measures relating to FTB from the 2014-15 budget and instead propose changes which focus squarely on the principles of structural reform of the social welfare system by simplifying the payment structure of family tax benefits. At the same time, the bills provide more assistance to families when they need it most and is, therefore, fiscally responsible.

Through structural reform of the social welfare system, this bill simplifies the payment structure of the family tax benefit system and generates some savings in the process. At the moment, our social services system is a bit like maze with overlapping schemes and measures. It is a complex and convoluted system which has grown out of control.

It is worth remembering that family benefits are a substantial area of federal government expenditure. Currently the government spends around $28 billion each year on family support. I just had a call from Robert in my electorate, who is an independent retiree, and he talked to me about his thoughts about where his taxes go. He received a notice from the government that advised him that 37 per cent of his taxes end up in social welfare payments, which he was not that impressed about. Then I spoke to him about the actual figures, and I said that currently the government spends around $28 billion each year on family support, including $20 billion on family tax benefit, $6 billion on childcare benefit and the childcare rebate, and $2 billion on paid parental leave For the purposes of comparison, the projected budget deficit for 2015-16 announced in the Mid-Year Economic and Fiscal Outlook is $37.4 billion. So we can see that the family payments do constitute a significant chunk of our budget. We know that Australia has been in a budget deficit position since Labor came to power in 2008-09, some eight years ago, and the Australian government's spending is simply not sustainable at current levels.

The government wants to continue providing support to families, and it is important that it does, but reforms are needed to make this an affordable area of government spending into the future. This involves some better targeting of available funds at those that need it most.

There is a budget repair job being undertaken by the Treasurer and there are some savings provided for in this legislation. Some of these savings will go to budget repair and some will go to the Jobs for Families Child Care Package.

There are three measures in this bill, which phase out the family tax benefit part A and part B supplements, increase family tax benefit part A fortnightly rates by around $10 for each FTB child in the family aged up to 19, and amend the rules and introduce a new rate structure for FTB part B. The supplements will be reduced in 2016-17 and 2017-18 before being abolished altogether in 2018-19.

These FTB part A and B supplements were introduced at a time when, under the Howard government, the surplus anticipated in the 2004-05 budget paper was $13.6 billion. I notice the member for McEwen over there; he does not know what a surplus is. I think it was in 1989 that that side of the House last delivered a surplus. How many years is that? It is nearly 20 years. If you just go back over the Howard years you will see all the budget surpluses you could want to see. I remind the member for McEwen of that. I am sure he will bring that up during his retort as well.

It is worth noting that a substantial use of the supplements was to offset potential overpayments arising from underestimates by recipients of their FTB relevant annual income. In the near future, the Australian Taxation Office is introducing a single-touch payroll system. By 2019-20 most employers will be participating, and the need for the end-of-year FTB reconciliation will be reduced. Single-touch payroll will be introduced and rolled out from 2017-18 and 2018-19, resulting in the reporting of a family's real-time income, which will minimise the risk of underreporting of income and the subsequent debts that go with that.

I know other MPs have spoken about this previously so I will keep this brief, but in the report by Patrick McClure entitled A new system for better employment and social outcomes it is made clear that there are far too many payments and allied supplements. There are some 20 main payment types and 53 existing supplements, and that second figure of 53 existing supplements has been reduced from 55 because the government has already removed the senior supplement and the low-income supplement. This package will reduce the number of supplements in the system, as indeed will the associated reform measures in child care. 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 an excess of 50 categorised supplements.

With these savings we can secure the future of family payments for the people who need it most, as I said. I would like to reiterate that: it is for the people who need it most. And there are families out there that do need the support, including in my electorate of Swan.

Bentley, in my electorate of Swan, sits within the first decile in Western Australia on the ABS's index of socioeconomic disadvantage in its Socio-Economic Indexes for Areas. Its neighbouring suburb of Karawara sits within the second decile, and several other suburbs in my electorate sit on the third and fourth deciles.

The City of Belmont holds the second-lowest SES ranking of any local government area in Perth. I know that the local government of Belmont, in the work they do for their local community, are striving hard to lift that second-lowest SES ranking. We are seeing changes in the City of Belmont that are worth noting, and I support and applaud the City of Belmont for the efforts they are making to get out of that second-lowest ranking.

These are the families in my electorate that are struggling and need assistance for the long term, and the second two measures in this bill which provide targeted support are aimed at these families. If this legislation is passed, the family tax benefit part A fortnightly rates will rise by about $10 for each FTB child in the family aged up to 19. This means that around 1.2 million lower-income families will receive higher payments from July 2018.

The government will also increase the fortnightly rates of youth allowance and disability support pension to align with the new FTB part A fortnightly rates. A new rate structure and rules will be introduced for family tax benefit part B. The maximum standard rate will increase by $1,000.10 per year for families with the youngest child aged under one year, helping around 142,000 families. The overall effect of these two measures is to continue providing day-to-day financial assistance to low-income families and also to build in some choice.

Having a support network makes a big difference to parents, and 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. The government also recognises that grandparent carers take on a large responsibility when caring for children. Grandparent carers are usually less likely to be working and more likely to be retired. From the contact I have had with the grandparent carers in my electorate I would say that the majority of them came from lower SES areas as well, and they really struggle. So the government has recognised that and recognised the work they do for their grandchildren through the circumstances that are thrust upon them. I applaud their efforts, and this government seeks to support them and help them as well.

The tax benefit part B will be available for single-parent families and grandparents with a youngest child aged 13 to 16. This will help grandparent carers meet the costs of raising their grandchildren.

At the same time, the government recognises that sometimes it is difficult for single parents to transition to work, even when their youngest children are in upper school, and this is why we are applying different payment assistance for these categories once the child turns 13, providing them with some additional appropriate assistance while they prepare to re-enter the workforce.

Part of the savings of this package will be used to help pay for the government's $3 billion Jobs for Families Child Care Package.

The key elements of the Jobs for Families Child Care Package include the childcare subsidy commencing in July 2017. The new childcare subsidy will replace the current childcare benefit and childcare rebate with a single, means-tested payment. It includes the childcare safety net, with some elements commencing in July 2016. The childcare safety net will provide targeted assistance for disadvantaged communities and vulnerable and at-risk children and their families to ensure they get a strong start while supporting parents to enter the workforce. The package represents the government's response to recommendations from the Productivity Commission inquiry into child care and early childhood learning which took into account a wide range of input from families, service providers, early childhood education professionals and businesses.

It is not news to anyone that childcare reforms are needed. Hourly caps on the provider will be introduced which will ease some of the inflationary drivers that exist in the present system. A more affordable, flexible and accessible childcare system is needed today as we see many families making the decision for both parents to work. The government understands the importance of providing a quality childcare system. My electorate of Swan is home to many young families, and those here with young children will understand the struggle it can be to put children into childcare. Sometimes the cost is more than the parent would make re-entering the workforce and decide it is not worth it.

As a result of this package, families using childcare services with incomes of between $65,000 and $170,000 will be, on average, $30 a week better off. The Jobs for Families Child Care 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. These reforms will give these young families more choice: a choice to utilise childcare and return to work. It will encourage workforce participation and national productivity. It is only though a strong childcare system that we can maximise workforce participation and strengthen families and the economy. In summary, these are sensible changes aimed at ensuring the sustainability of family payments and ensure that the system provides support to families who need it most now and into the future.

The package enhances support for families with their day-to-day living expenses and helps them support their children—the future of Australia from birth through to education to the transition to independence. While it is comprehensive, our system is also one of the most generous, but it needs sustainable changes so it can help those families who need it most. This package will make our system fairer and simpler, more efficient, more effective and more sustainable. We will be removing waste and will be using the dollars more wisely. This government is making progress towards a sustainable social welfare system. This bill ensures that we are making the system more efficient, more effective and, most importantly, more sustainable. It is my view that the intent of social payments is to provide assistance to those who need it most. This package will do that. As we know, welfare payments have always been part of a safety net. Through this bill we are making progress towards a sustainable welfare system. This bill ensures taxpayers that their taxpayer funds are being used to better the lives we live and make our country a more sustainable place.

As I wrap this up, I want to make clear that this government is extremely committed over the long term to continuing to assist families to raise their children. This reform and the package is not just a quick-fix for the now. This will assist families in the long term. This will help shape our future. So I say to those on the other side: support the package, support the government's support of the families of Australia and make sure that we pass the bill this time. I commend the bill to the House.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak against the Social Services Legislation Amendment (Family Payment Structural Reform and Participation Measures) Bill (No. 2) 2015. I say from the outset that the reason we oppose this bill is its inherent unfairness, plus the fact that every member of the opposition knows, and what the families in my electorate of McEwen that I represent have learned in a very short space of time, is that you cannot trust a word that the Turnbull government says. It offers something with one hand, but then takes it away with the other. It promises to do one thing and then does the complete opposite. How can the families in my electorate believe that the proposed changes to family tax benefit parts A and B, as outlined in this bill, will not hurt vulnerable families?

The Minister for Social Services tries to put a bit of gloss on it. He has tried to convince the Australian people that he is willing to compromise on measures in the bill, keeping in mind that 'we still have to save enough money to pay for changes to child care'. These are the long overdue childcare measures which we have not yet seen in parliament and we are expected to just take their word and support it. It is not going to happen. We do not know what the childcare measures are actually going to mean. We do not know who will benefit. We do not know who will not benefit. We do not know how much the Turnbull government's proposed childcare measures will cost. In fact, we know nothing about them. Cuts to family payments appear to be a convenient way for the Turnbull government to pay for its so-called new policy announcements.

How can anyone reasonably consider whether the benefits of picking on the low-hanging fruit, such as cuts to family payments, would yield the greatest benefit to the Australian community when the key policy announcement about what they say it is for is not even on the table? Let's not forget that cuts to family payments are the low-hanging fruit for the Turnbull government, because it refuses to consider tax reform to ensure big multinational businesses pay their fair share. Instead, you have the Turnbull government asking the opposition and Australian families to trust them and just agree with the changes outlined in the bill. No, thanks. The Turnbull government is playing a dishonest game. It is using sleight of hand to tell Australian families that they will be better off under the proposed changes. On one hand, the changes would supposedly see families have a small increase to the fortnightly rate of FTB A. Meanwhile, the changes would see the FTB A and FTB B supplements being cut. The loss of these supplements means that the rates of both family tax benefit A and B are reduced overall, leaving families worse off.

I have listened to families in my electorate who have told me what the possibility of losing thousands of dollars in family tax benefit means to them. It means less money to save and prepare for school. There is no money for school shoes or uniforms—and we all know how fast kids grow—or for school camps and excursions. In the first version of this bill, it was obvious that the Turnbull government thought that ripping money away from vulnerable families would be a walk in the park. The Prime Minister was mistaken. Labor opposed the first version of the bill and we are doing it again. We argued that the changes were fundamentally unfair. We forced the government to back down on two of its measures: their plan to freeze family tax benefit rates and to freeze eligibility thresholds. We successfully argued to get payments to grandparent carers back on the table. They would have been cut in the previous bill by the Abbott-Turnbull government. Why would you go and attack grandparent carers?

We will still fight on. This version of this bill is not good enough. Even the Parliamentary Joint Committee on Human Rights is of the same opinion. With scrutiny of this bill from Liberal, National, Labor, Greens and Independent MPs and senators, it said that this bill fails the fairness test. In its report from November 2015, the Parliamentary Joint Committee on Human Rights found the proposed measures in the bill were not able to be justified. The report from the Parliamentary Joint Committee on Human Rights released on 2 February this year showed that nothing has changed between the previous version and this version of the bill. This means that the committee's questions on the veracity of the bill were not answered by the minister.

Can the Turnbull government actually grasp the meaning of the word 'fairness'? Let's see how we go. The new cuts to families in this bill will leave some families worse off than the cuts in the previous version of the bill that the Abbott government proposed would have done. That is unfair. Asking 1.5 million ordinary Australian families to accept the loss of more than $700 per child every year by losing their family tax benefit part A supplement is unfair. About 600,000 of these families are single-parent families, and 500,000 of those are on the current maximum rate of family tax benefit part A. This means their annual income is less than $51,000.

In the electorate of McEwen, these cuts to the FTB part A would impact on more than 17,000 families. 1.3 million Australian families will lose their FTB supplements, a cut of more than $350 per family every year. The 600,000 single-parent families I mentioned before are in for a very rough ride. Not only will these families have their FTB reduced when their child turns 13; it will then be cut entirely when their child turns 16. In my electorate, almost 15,000 families will be directly affected by this attack.

I say to my colleagues on the other side: if you have not caught on yet, none of the proposed measures in this bill represent fairness. How bad is Turnbull doing that he makes Abbott appear more humane and fair? The Minister for Social Services cited one of the recommendations of the McClure report in his press conference. He focused on the report's recommendation to simplify the system. by reducing the number of payments and supplements. Rationalising the system in this way would be a good start to structural reform if—and this is key—appropriate checks and balances, including fairness, were transparently applied. But we simply cannot trust the Turnbull government to be transparent or to ensure that the interests of ordinary Australian families are looked after.

For example, what about the other recommendations of the McClure report? Why were they so selectively ignored? One of the recommendations was that family assistance should increase with the age of children. This recommendation was based on research into the cost of raising children and identified key points in the life cycle—starting primary school, starting secondary school and the final two years of secondary school. I am sure if you talked to any parent they would agree with the research outcomes. A comment made in the McClure report was really interesting, and I cannot wait to hear the views of one of my Liberal colleagues on the other side on why the recommendation was disregarded. It said:

Payments for low income families with children and young people should support children to finish their education and transition to the workforce.

Well, the measures in this bill definitely do not do this. Family assistance payments will be cut by the time a child reaches the age of 16 when they still have two to three years of critical schooling left.

I wonder what Australian families will take away from this. Will it be that the Turnbull government believes that only kids from middle- to high-income families should finish school? They have seen the Liberals support $100,000 degrees, so maybe they will not be surprised. When it comes to fairness, the Turnbull government is no better—in fact, it is worse—than the Abbott government, and that is a pretty tall order. It is a different leader with the same policies. They promise not to do something to get elected and then implement it anyway. I am sure this is in the back of Australians' minds when it comes to the GST.

There is a clear distinction between Bill Shorten's Labor and Malcolm Turnbull's coalition. Labor fights for the majority—the millions of Australian families, workers and business owners trying to get ahead with a handful of dollars—whereas the Turnbull government stands by the handful of people with millions of dollars. After all, the Turnbull government refuses to make multinationals pay their fair share of tax and gives superannuation tax concessions to the people who are for the people in the top one per cent income bracket. Instead, the Turnbull government would rather take money from the pockets of all Australians, hit them with a 15 per cent GST for good measure and then tell them that they are better off because of changes to their personal income tax rates.

We still have not seen the Turnbull government's tax reform package, so this assurance is not going to pay the bills in the meantime, is it? This bill should be pulled. If we really want to see fair structural reform in the area of family payments, we should start again. Labor is not opposed to structural reform of family payments, as long as it is fair and reasonable. The Turnbull government's bill views Australian families as the bottom line of a spreadsheet. The Parliamentary Joint Committee on Human Rights did not endorse the previous version of the bill. It sought justification from the minister for the proposed changes. Its questions still remain unanswered in this bill. The losers in this bill are the single parents and families with children in their last two years of schooling. That is why they are relying on Labor. They know Labor can be trusted to stand up for Australian families.

We have also heard members opposite in this wide-ranging debate—I do not know how joint strike fighters got involved, but somehow they did—saying, 'We've got to repair the budget mess.' December's interest debt this financial year was $1.352 billion—$43 million per day. Gross debt since this government removed the debt ceiling limit has gone over $400 billion. That is up 47.2 per cent from when they first got elected. Net debt is now $274 billion. That is now up 57 per cent since those opposite got elected. They like to come in here like peacocks—the Prime Minister fluffs up, puts his tail out and talks about economic credibility—but the numbers do not lie. This government has increased debt, it has increased deficit, and we have been every day watching this government attack Australian families and Australian people at the same time it protects those at the top end of the scale. That is why it took things like the low income superannuation contribution—a measly $500 for people earning less than $37,000 a year—off people. The Australian people know that this is not right. They know that the Prime Minister is not right. They know that the government is not right. They also know that Labor is there to stand with them against these unfair cuts.

Lucy Wicks (Robertson, Liberal Party) 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 (No. 2) 2015. I am pleased to be supporting the Turnbull government's legislation today, which is part of the family payments reform package and backs up our Jobs for Families initiative, which has been so well received in my electorate on the Central Coast. It is a strong demonstration of the government's commitment to families, providing additional help to families where they need it the most—with day-to-day expenses.

Many of the measures in this revised package of bills bring forward items related to the family tax benefit, which is the family assistance payment that helps with the many and varied costs associated with raising dependent children. Specifically, this bill will see fortnightly rates for family tax benefit part A, which is paid to the parent or guardian, increase by about $10 for each child in the family aged up to 19. I am advised that this amount adds up to an extra $6,000 over the lifetime of a child in eligible families. Around 1.2 million families, including those on income support, will receive these fortnightly increases, which will assist them with the day-to-day living expenses all families incur. There will also be around $10 more per fortnight for youth allowance recipients under the age of 18 who are living at home. This is part of the fairness of these measures, and helps to simplify the processes, for families to be able to understand more easily.

The bill will also amend the rules and introduce a new rate structure for family tax benefit part B, which is paid to sole parents or couples who have one main income, and where one parent stays at home or balances paid work with caring for children. Under this legislation, family tax benefit part B payment structures will also be reformed to provide more support to families when their children are born, and encourage more workforce participation when their youngest child is older, thereby enhancing their ability to work. From 1 July, the standard rate of the family tax benefit part B will be increased by $1,000 per year for families with a youngest child aged under one, which is forecast to help around 142,000 families, including families in my electorate. I am advised that the current standard rates will be maintained for families with a youngest child aged between one and 13. Standard rates will also be maintained for single parents who are at least 60 years of age, and grandparent and great-grandparent carers with a youngest child aged between 13 and 18. A reduced standard rate of $1,000 will apply to single parent families, in situations where the parent is under 60 and the youngest child is aged between 13 and 16.

One of the great strengths of this country's social services program is how it provides such a diverse range of programs and payments to support parents, the primary caregivers to children and their families. But, unlike those on the other side of this chamber, we need to acknowledge that we have to secure the long-term sustainability of this family payments system. The government spends a significant amount of money in three main areas of family support each year. Figures I have received from the department suggest that the investment is around $20 billion spent in family tax benefit, around $6 billion in child care benefit and child care rebate, and around $2 billion in paid parental leave. So, even from this snapshot, it is obvious that the government's commitment to supporting parents in caring for their children must be balanced with the responsibility to make sure that family assistance and social security payments are well targeted and sustainable into the future.

One way this legislation acts on this need is to phase out family tax benefit end of year supplements, which are gradually being reduced over the next two financial years before being abolished in 2018-19. The supplements were introduced to mitigate the risk of debt after reconciliation, but the introduction of single touch payroll means that by the time this supplement is abolished most employers will be participating and the need for this payment will be reduced. This measure will save more than $4 billion over the forward estimates, and it is clearly a sensible reform. The supplements were introduced under the Howard government when there was an anticipated surplus of $13.6 billion in 2004-05.

We have heard in this debate many complaints from Labor about these changes, but Labor had a chance to do something about this during its chaotic six years in government—including six long years on the Central Coast, where its local Labor representatives failed to deliver for our region and its future. The reality is our social services bill represents about a third of the Commonwealth budget and it is growing faster than any other area of government. The minister has advised that this year we will spend around $20 billion on family tax benefit parts A and B, which represents the second biggest item of expenditure in the social services portfolio and the fourth largest in the entire budget. Without further restraint, our welfare bill is expected to grow from $149 billion in 2014-15 to $277 billion in 2025-26. As the House can see, in this legislation this government has a plan that is fiscally responsible and is targeted at families who need it the most. The changes are also consistent with the critical reform recommendations of the McClure review, which urged the government to make it easier to navigate the system to get the right assistance; for example, a system that has 20 main payment types with in excess of 50 supplement categories is just about unworkable.

But Labor has no such plan and never had. In fact, I have been advised that Labor's record in this policy area is a far cry from what it has claimed during this debate. In 2008, Labor means tested family tax benefits part B and introduced a means test on the baby bonus. In 2009, Labor froze indexation for the full payment of family tax benefits part A and B, the baby bonus and the dependant spouse rebate, and announced an income test for the Commonwealth seniors health card. In 2010 Labor capped the childcare rebate and paused the indexation of the childcare rebate for four years. In 2011 Labor froze indexation for family tax benefits A and B supplement payments. In 2012 Labor cut the baby bonus. Then, of course, Labor introduced the carbon tax, which did nothing but drive up the cost of electricity bills for residents and businesses in my electorate. I would also emphasise the point that, while Labor are busily opposing our legislation, they are not proposing how they are going to fund the ever-increasing social services budget. What is more, Labor refuse to acknowledge that the size of their budget black hole is $48.4 billion. And not only that; they continue to block the government's budget repair measures, which will only drive the deficit higher. In contrast, this bill is a great example of how we are responsibly getting the budget back into shape.

This package is designed to support the government's $3.5 billion Jobs for Families childcare package, which will provide greater choice for more than 1.2 million families by delivering a simpler, more affordable, more flexible and more accessible childcare system. This is critical for my electorate. The Central Coast is a region where this need is particularly pressing because of the large number of commuters—around 30,000 to 40,000—which impacts around one in three families in my electorate of Robertson. Many parents have to leave early in the morning for work and return home late at night to their families because their job opportunities in Sydney or Newcastle take them elsewhere. In the case of my husband, this is a 4½ hour round trip every single day—representing the experience of tens of thousands of 'coasties' every day. As a mother of two young children growing up on the Central Coast, this need for flexibility is therefore essential, and it resonates very strongly with other mums and dads that I talk and meet at the school gate or, last year, when I met them at my local preschool day care centre. They often contact me, asking what the government is doing for families. This Turnbull government wants to encourage these families with more opportunity, because workforce participation is fundamental for creating prosperity into the future. In fact, the minister cited a figure in his earlier speech that 165,000 Australians described child care to be of critical importance for them to be able to return to work, increase their work hours and grow their household wealth.

So, part of our Jobs for Families childcare package is to establish a new and simpler childcare subsidy from 1 July 2017. Families using child care in 2017, with family incomes of between $65,000 and $170,000,will be around $30 a week better off. Those on higher incomes will, on average, continue to receive the same level of support. We want our local families to be able to choose to work. We do not want that choice denied because of complex, inflexible and unaffordable childcare arrangements. Contrast this with Labor, who, when in government, allowed childcare costs to balloon by around 50 per cent.

In summary, without any change, the cost of our social security system will continue to rise while the number of working-age taxpayers will continue to decline. That, coupled with the debt and deficits which were left by the previous government, means we have to take the necessary steps to address this issue. I commend the bill to the House.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Last week the Prime Minister came into the House and said that he had been Prime Minister for 141 days and, to quote his words, 'nothing seems to have changed'. I can tell the Prime Minister that he has now been the Prime Minister for 147 days and, again, nothing seems to have changed. If you look at the policies that have been brought before this parliament in the form of legislation it is very clear that, while we might have a new Prime Minister and while the deck chairs might have been moved around, the fundamentally unfair, harsh policies that were introduced immediately the Abbott government was elected in 2013 are still on the table—sometimes rebadged, sometimes just with minor changes having been made to them. However, the same harsh policies are still before us in this parliament, and that is why we on this side of the House will continue to oppose those harsh policies, such as the ones related to the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No. 2) 2015, which we are currently debating.

I have listened to the contributions to this debate by members opposite and almost universally they have come into the chamber and simply tried to justify why these cuts are necessary. Very few of them have given any good reasons as to why this is good policy. They simply try to justify it, knowing full well that they are perhaps arguing an unarguable case. In fact, every one of them came in and talked about how it was all Labor's fault that the country was in this financial 'mess', as they put it. None of them at any point in time acknowledged that, under a Labor government, we had to work through the global financial crisis and that we did so with this country keeping its head above water, with a strong economy. Indeed, we have had 25 years of consecutive growth, and those 25 years included the period in time when we went through the global financial crisis; but, again, members opposite seem to conveniently forget all about that when they talk about the country's deficit.

I acknowledge that there is a deficit. We had a plan in place at the time we lost office to try and manage that deficit and slowly reduce it—and we would have done that. But, since coming into government, members opposite, the coalition government, have actually increased the deficit. We know that this year it will hit almost $38 billion—twice what they originally anticipated it would do. The truth is that much of the deficit blow-out has occurred under their watch because of their policies. The coalition government came into office and were not even able to contain the deficit they inherited. They have actually doubled it since coming into offic Rather than continuously trying to blame the previous Labor government for the financial state of the country, coalition members should perhaps have a much closer look at their own policies and how much they have contributed to the budget deficit, which they are now in charge of and which is their responsibility. Similarly, they cannot continuously say, 'Look, it is not our fault; it is the commodity prices that have crashed and therefore the income would otherwise have been coming to government is no longer there.' It is as much their foolish policies that have caused a drop in taxation revenue and in turn put the government in the mess they are in.

I want to touch on another point which members opposite have again consistently made when they come into the chamber to argue the merits of this legislation. They continuously say that Labor has not supported any of the cuts that are required in order to get the budget back into the black. That is simply not true. Labor has already supported nearly $9 billion of cuts to family payments and child care payments which have been proposed by the Turnbull government and which have, as I understand it, got through the parliament. So where the cuts are at least reasonable, we have been able to support them, but clearly where the cuts are very harsh and unfair we will not.

Having argued that we have a major budget crisis and therefore we have to look for cuts in the budget, none of the members opposite has come in and responded to this very simple question: if there is a budget deficit to be managed, then why not look at other areas where the government could perhaps raise additional taxes or, for that matter, perhaps even make cuts that would not hit families so hard? Why do we only look at hitting the lower income earners of this country—families, single householders and single income earning families—when we are looking to make cuts? Those are the policies of the current Turnbull government; it was the same when Prime Minister Abbott was in control. They are the policies that we will oppose, because we believe that there are other options should the government wished to look at them. We have articulated those other options time and time again. In fact we have talked about tax avoidance across this country and across the world that could be tackled and that is currently robbing governments around the world of billions and billions of tax, including the government of Australia. We also know that there are very generous tax breaks for the very wealthy people of this nation, and again some of those wealthy tax breaks could be looked at. We have in fact put forward propositions in respect of these tax breaks for the very wealthy and their superannuation accounts.

There are other options and, if those other options had all been exhausted and there was nothing left, then you might at least think, 'Well, perhaps they have run out of ideas and options and therefore this is their last resort.' The foolishness of all this is, in my view, that if you want to balance your budget your best option is to grow the economy. If you grow the economy, then you can ultimately balance the budget without inflicting the pain on families that this government is prepared to do and is doing. And yet by cutting payments to families the government is doing the exact opposite; in this case by cutting payments to families we are talking about a total cut of $4.2 billion over the next four years. My understanding is that it runs to about $10 billion, and perhaps even more, in years to come. That is money that is being cut from the budgets of ordinary Australians; money that they will not spend; and if they do not spend it then the economy slips backwards rather than grows. My view is that cutting those payments in the long term will do the budget more damage than good.

But it goes further than just these cuts, because this government has torn down industry in this country by abandoning many of the funding programs that we had in place to support industry and by turning its back on the automotive industry—one of the biggest industry sectors in the country. We have also seen them do exactly the same thing to research funding across the country. Right now we are seeing the CSIRO and the climate scientists up in arms because their jobs are being threatened due to the cuts to CSIRO, and the CSIRO is just one of the valuable research institutions of this country that has had funding cuts. My understanding is that about $1 billion has been cut from all of those institutions together.

The truth of the matter is that the government members who come in here and talk about fixing the budget mess should perhaps look to fixing the Turnbull government's budget mess by adopting different policies to those they have adopted. This legislation hits struggling families the hardest and it is quite frankly unfair. For a Prime Minister who continuously talks about fairness, this legislation does the exact opposite. The Prime Minister—I think the Australian public is slowly waking up to this—is perhaps not the person that he portrays himself to be through the words he utters in this parliament. It is not what he says that matters any more; it is actually what he does. I made the point earlier that this particular proposition will take $4.2 billion over the next four years out of the pockets of Australian families and over the next 10 years—I will correct the figure I gave earlier—it is $16 billion. It is not $10 billion; it is $16 billion. The member of Jagajaga quite clearly outlined the effects that these cuts will have on Australian families. I am pleased to say, as other members from this side of the House have made clear, that at least we have seen the 4,000 grandparents who would have lost about $2½ thousand in here protected because of the stands that Labor talk on this legislation.

I want to go through this proposition to show what it does. It increases the standard child rate of Family Tax Benefit Part A by $10 a fortnight for all families receiving the base rate. I understand that about 140,000 families will be better off. It also introduces a new rate of payment for Family Tax Benefit Part B for families with a child under the age of one. I understand 1.2 million families may be affected by that change.

Those are the pluses, perhaps the wins. However, it comes at a huge cost. There will be a reduction in family tax benefit part B for single-parent families with children aged between 13 and 16, and the legislation will abolish the payment for single-parent families whose youngest child is aged between 17 and 19 and in full-time secondary school. Some 136,000 single parents with children aged 13 to 16 will have their family tax benefit part B reduced to $1,000 in 2016. That is a cut of $1,700. Single parents with children aged over 16 will have their family tax benefit part B cut entirely in 2016, and that is a cut of more than $3,100. Family tax benefit parts A and B end-of-year supplements will also be phased out over the next two years. Family tax benefit part A supplement will be reduced to $602.25 from 1 July 2016 and to $302.95 from 1 July 2017 and then abolished entirely from 1 July 2018. Family tax benefit part B supplement will be reduced to $302.95 from 1 July 2016 and to $153.30 from 1 July 2017 and then be abolished entirely from 1 July 2018.

Some 1.5 million families will lose family tax benefit part A supplements of $726 per child. Around 650,000 of those families are single parents; around 500,000 of these families are on the maximum rate, meaning they have a combined family income of less than $51,000; and 300,000 of those families will not get the increase to the family tax benefit part A per-child amount, which does not start until 2018—that is, two years after the supplement starts to be reduced. And 1.3 million families will lose their family tax benefit part B supplement of $354 per family.

If those cuts were made in isolation, a skerrick of an argument might be able to be made in support of them. But the truth is that they come on top of a range of other cuts being made by this government, including the cut to the schoolkids bonus of $430 for a primary school student and $850 for a secondary school student. That comes on top of the $30 billion of cuts to schools around the country. That inevitably means school fees will go up. So again parents will have to fork out more money for their children to go to school. That comes on top of the $60 billion in cuts that we talked about in the MPI today that this government is also trying to push through the parliament. These cuts will affect the cost of GPs, pathology tests and diagnostic imaging. And the cost of private health insurance has also gone up. These are all costs that directly impact on families.

On top of that, families are either losing their job because of the cuts being made in the public service and industry around the country or losing hours of work and not getting the same amount of income at the end of the week—in other words, their take-home pay is going down. Their take-home pay is going down and the cost of keeping their family is going up. That is making life incredibly hard for them. That is why this legislation is unfair and unjust. Frankly, members opposite should be ashamed of coming into the chamber and supporting legislation which hits families so hard.

Debate adjourned.