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

This bill, the Social Services Legislation Amendment (Family Assistance Alignment and Other Measures) Bill 2016, proposes a number of technical amendments to strengthen the legislation to better achieve its original intention. It is not controversial.

Schedule 1 amends the date of effect provisions for the calculation of family tax benefit supplements in order to prevent payment of a supplement where an entitlement would have existed had the recipient complied with existing reporting timelines. Schedule 2 consists of contingent provisions, which repeal schedule 1 in the event that the government passes its family tax benefit supplement cuts and the changes in schedule 1 become redundant. Schedule 3 corrects an unintended consequence in the youth allowance rate calculator which results in underpayment of some youth allowance recipients.

As I said, the contents of the bill are not controversial, and so we will support its passage through the parliament. But I do want to take this opportunity to make it very clear that Labor does not support any further cuts to family tax benefit end of year supplements. I have had many, many people email me about this issue, so I want to make it crystal clear—and I am very glad that the minister is at the table—that Labor will not be supporting any further cuts to family tax benefit end of year supplements.

I want to speak briefly about the date of effect provisions in the bill. Family tax benefit is paid in fortnightly instalments, at a rate based on an estimate of adjusted taxable income. At the end of each financial year, reconciliation occurs, and the amount of family tax benefit paid is compared with the amount of family tax benefit that would have been paid, had the actual taxable income been known, with the amount of any part A and/or part B supplements factored in. The reconciliation process therefore can result in either the creation of a debt or a credit. The reconciliation process is triggered by the lodgement of an income tax return or by seeking a review.

When a recipient of family tax benefit is not required to lodge an income tax return, they must notify the Department of Human Services in order to trigger the reconciliation process. The department must be notified within a year of the end of the relevant financial year that an income tax return was not required to be lodged. When notification happens more than a year after the end of the relevant financial year and the reconciliation result is that the recipient is entitled to receive a family tax benefit top-up or supplement, this amount is not paid as a result of the reconciliation occurring out of time. The Administrative Appeals Tribunal has interpreted the date of effect provisions to allow for payment of additional family tax benefit where the department was notified more than a year after the end of the relevant financial year. This is inconsistent with the intention of the original legislation and the practice of the department, and this schedule amends the legislation to ensure that this is not the case. So we do support the intention of the bill before us.

As we are talking about family tax benefits in this bill, I do want to draw the attention of the House to some very dodgy numbers that the Minister for Social Services has been taking around to newspapers, trying to scare people into accepting unfair cuts to vulnerable families. In a recent article in The Australian, the minister used a highly selective example of a single parent family with four children aged between four and 13. First, I would just remind the House that, according to ABS data, only around four per cent of single parents have four or more children. But, more significantly, the minister was completely wrong to say in the article that a single parent earning a salary of around $45,000 would be better off not working. As ACOSS said in a statement, the government's example compared 'apples with oranges'. ACOSS stated that: 'a sole parent with four children is over $20,000 better off when in paid work on a wage earning the part-time median wage of $46,500 and over $25,000 better off when earning the full-time median wage of $61,300.' Greg Jericho of The Guardian described the government's figures as 'patently absurd'. Fairfax's Ross Gittins described it as a 'cock and bull' story. Ross Gittins suggested that the government planted it because it:

… wants us to believe the federal budget is close to bankruptcy but, in truth, it's this government that's nearer to being morally, politically and economically bankrupt.

Cassandra Goldie, the CEO of the Australian Council of Social Service, said the claims were part of a disturbing pattern. She said:

It appears to be a deliberate strategy to generate a story which creates this impression that we've got a social security system which is 'bloated and too generous' when the facts will show it's completely to the contrary.

So what we have here is the Minister for Social Services prepared to twist the numbers, prepared to cherrypick figures to suit his political argument and, I am sorry to say, prepared to scare people with misleading numbers. You might ask: to what purpose? What is the ultimate objective of this scurrilous scare campaign?

I am concerned that it is about frightening the Australian people to try to force them into accepting unfair and unnecessary cuts, like those which we saw in the 2014 budget. This, I think, is the ultimate political objective of this Liberal government—to try to scare people into accepting another round of harsh and unfair cuts. I am pleased to say that Labor certainly will not be letting this government get away with it. Just as we stood up to the cuts in 2014, we will do the same.

I just want to remind the House of the $8.5 billion that the previous Liberal government tried to cut from families. They wanted to remove family tax benefit part B from families when their youngest child turned six. They wanted to freeze indexation of family tax benefits. Every single Liberal member of parliament voted for these cuts. All in all, they would have meant that ordinary Australian families would have been around $6,000 a year worse off. Ten per cent of their income would have been ripped away. Of course many, many people fought against those cuts, Labor included. I am very pleased that many of them were abandoned by the government. Unfortunately, there are still around $2 billion worth of cuts in front of the parliament that this government does want to take from families.

We will support this bill today, as it is a technical bill. But we certainly will not be letting this government get away with a misleading campaign that targets vulnerable Australians. We certainly will be standing up for Australian families and be holding this government accountable for what can only be described as an outrageous scare campaign.

Dan Tehan (Wannon, Liberal Party, Minister Assisting the Prime Minister for Cyber Security) Share this | Link to this | Hansard source

By way of summation on the second reading debate for the Social Services Legislation Amendment (Family Assistance Alignment and Other Measures) Bill 2016, as was noted by the shadow minister for social services, the bill does introduce amendments in the social services portfolio to reinforce the time period for income reconciliation for certain family tax benefit recipients for the 2012-13, 2013-14 and 2014-15 financial years, and to correct an unintended consequence generated by the youth allowance rate calculator.

Amendments will be made to the date-of-effect provisions to clarify long-standing administrative practice in relation to the payment of arrears of family tax benefit. In effect, the amendments will ensure it is clear that an individual cannot be paid family tax benefit supplements and top-ups where they notify that they were not required to lodge an income tax return more than one year after the end of the relevant income year. This will ensure that the legislation is clear so that review agencies such as the Administrative Appeals Tribunal will apply the law as intended when reviewing these matters. The amendments also ensure consistency with the equivalent time frame currently applying to families who are required to lodge a tax return for the 2012-13, 2013-14 and 2014-15 financial years.

While the amendments are technically retrospective in nature, they merely strengthen existing provisions to put their interpretation beyond doubt. It is worth noting that there will be no material effect on the family tax benefit recipients for these years given the one-year time frame has been in effect since the 2012-13 year and has been communicated consistently to recipients since that time. One year is considered a reasonable amount of time for families to notify Centrelink that they are not required to lodge and/or provide details of types of income not included in a tax return in order for reconciliation of their family tax benefit entitlement to occur.

This bill does not prevent extensions to the period of time available for recipients to notify that they were not required to lodge where there were special circumstances that prevented them from fulfilling their obligations on time. Such extensions continue to be available under the current subsection 32J subsection (2) of the A New Tax System (Family Assistance) (Administration) Act 1999. This bill also does not prevent those recipients granted an extension under the above-mentioned subsection from being paid family tax benefit supplements and top-ups as a result of notifying that they were not required to lodge an income tax return more than a year after the end of the relevant financial year. These amendments will ensure that full effect is given to the original 2013 realignments of the time period for income reconciliation budget measure and that the intent of the family assistance program is met, which is to deliver financial assistance to families to help with the cost of raising children when it is needed.

The bill also includes contingent amendments to remove reference to family tax benefit supplements in the event they are phased out as part of the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2016, which is, of course, designed to improve the sustainability of the family payment system. The bill also introduces amendments to correct unintended consequences of amendments that were made in part 3 of schedule 1 to the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015 to the youth allowance rate calculator in section 1067G of the Social Security Act 1991. It is intended that the rate calculator produce a fortnightly rate. Currently, there is an inconsistency in that step 1 of the rate calculator is expressed as an annual amount while subsequent steps are expressed as fortnightly amounts. The result is that comparing the outcome of the subsequent steps from the calculation in step 1 does not generally provide the correct threshold test outcome and, in most cases, will result in a harsh outcome. This error occurred because the introduction of complex maintenance income rules from the A New Tax System (Family Assistance) Act 1999 which are predicated on annual amounts to the Social Security Act 1991, where payments are based on fortnightly amounts. The change that is proposed amends step 1 in the rate calculator to reduce the figure to a fortnightly amount consistent with the original intent of the changes as announced by the government in the 2015-16 budget.

It is also customary at this point to thank members opposite for their contributions. Of course, I do that. I note that the shadow minister, the member for Jagajaga, said that, whilst they are the supporting this bill which is technical in nature, they will not support further cuts to the FTB supplement. I note the use of the word 'further' because, of course, you did not support a range of cuts for those people on incomes above $80,000, which was the complete end of their supplement. The use of 'further' was advisable because the support for that reduction was a reversal of your position, because you opposed that prior to the election. You let millions of Australians believe that your position was to oppose any cuts to the supplements, but in the omnibus savings bill—

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

That is not true.

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

That is in fact true. In all the cameos that the member opposite used when they were talking about cuts, they would recall all of the supplementary cuts that we had made. They reversed their position, just like they did with respect to the asset changes to the pension and just like they did with respect to the schoolkids bonus. So I am sure that people take all of the coldness of the cold comfort that is offered by the member opposite when she says that Labor stood up to these cuts. Yes, they did stand up to the cuts to the pension, until they stopped standing up to the cuts to the pension when it came to the assets test. Yes, they did stand up to the ending of the schoolkids bonus, until they decided not to stand up to the ending of the schoolkids bonus. Yes, they did stand up to ending FTB supplements until they decided to support that measure. In every instance that they said they would oppose something right up to the date of the election, they failed to do that and in the process deceived millions of Australians. In fact, they ran petitions collecting the signatures of Australians against changes to the pension assets test, at the very time that they were supporting that policy. So I thank the member opposite for her interjection because it simply offers another opportunity to point out the unbelievable barefaced hypocrisy of members opposite.

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

You misled the parliament again.

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

'Misleading the parliament' is the accusation being levelled. You misled 24 million Australians by saying that you would oppose changes to the assets test on the pension when you, unfortunately, ended up supporting those, as you did with the removal of the schoolkids bonus and have done, at least in part, with the removal of some of the family tax benefit end-of-year supplement. So I thank the member opposite for her observations.

Finally, the measure ensures that the aim is to align parental means testing arrangements for youth allowance more closely with those of family tax benefit part A. With that, I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.