Rachel Siewert (WA, Australian Greens) Share this | Hansard source

The Greens recognise that child support reform in Australia is overdue. We also recognise that the changes contained in the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006 make some significant progress in addressing reform. The current system has been in place since 1989 and creates injustices for many families, both for payees and payers. To that extent it creates conflict and despair and inevitably it is the children who end up losing out. While the bill does introduce changes that improve significantly on flaws in the current system, we believe there are some issues that need to be addressed via amendments to the bill. I will be moving amendments along those lines. Many of these issues were acknowledged in the Senate committee’s report, but the report did not go so far as to recommend amendments.

The Greens are putting forward sensible and non-controversial amendments based on recommendations by the chair of the Ministerial Taskforce on Child Support and Professor Parkinson. We propose to support the legislation subject to our amendments being accepted. Our children are our future, and the better we support them and ensure that they have the opportunity, the safety and the confidence to grow and to realise their full potential, the brighter their future can be. The Greens believe that our children must be our No. 1 priority. This is a fundamental principle that we will return to time and again in addressing this proposed legislation. The Greens support the majority of the legislation, but we hold serious concerns about the potential impact of the bill on low-income households, particularly when the impacts of the new formula are considered alongside the income cuts that many of these same households are already experiencing, or could experience, under the Welfare to Work legislation.

To the extent that growing up in poverty reduces the opportunities offered to our children and restricts likely outcomes, it diminishes us all. The Greens are particularly concerned about the over 10 per cent of Australian children who could be said to be growing up in poverty. This is across all family types, but single parents are the most likely to be living in poverty. We are worried that the new child support formula could have the effect of increasing the number of children living in poverty and are suggesting changes that will address that.

We are concerned about the very short time frame that the committee had to consider this legislation. People who made submissions to or appeared before the committee commented on the extremely short time frame they were given to consider what we all acknowledge is an extremely complex piece of legislation.

The principle that should underpin our approach to child support is: the wellbeing of the child comes first. Children should be safe, secure, well fed, clothed and sheltered. Both parents have a responsibility to contribute to the wellbeing of the child. Also, where it does not compromise the safety of the child, parents should have the opportunity to maintain an active and ongoing role in the lives of their children. Shared parenting is beneficial to both the child and the parents. There should be a fair balance between parents in providing for a child’s upbringing. We believe this balance should include both the financial costs and the unpaid or ‘opportunity’ costs of providing care.

Finally, we believe that the CSA, Child Support Agency, needs to be competently administered and sufficiently resourced. In the past some problems have occurred because the CSA has lacked resources, particularly for enforcement of nonpayment. Strong enforcement and compliance measures are needed to ensure that obligations of parents are met and the needs and the rights of the child are defended.

As I said, the Greens are particularly worried about the potential financial impact of the new child assessment formula on low-income households. Low-income, single-parent households are among the most disadvantaged group in our society. Of all family types, they are most likely to be living in poverty. The Australian Housing and Urban Research Institute estimates that 46 per cent of sole parents with dependent children live on very low incomes. The Brotherhood of St Lawrence social barometer suggests that young people from low socioeconomic backgrounds are more likely to engage in smoking and substance abuse, to develop mental health problems, to fail or disengage from school and to be unemployed or worse off in the labour market.

NATSEM research shows a strong correlation between economic disadvantage and social exclusion. Kids growing up in disadvantage effectively miss out on many of the opportunities our society has to offer. This can lead to entrenchment and intergenerational disadvantage. It can produce an underclass and can greatly increase the level of disharmony and conflict in our society. Research by ACOSS released on Monday indicates that 77 per cent of Australians are concerned that the gap between rich and poor is growing.

A smart and caring society invests in its children. The big question we must ask ourselves about child welfare and child support policy is: what kind of society are we creating down the track? The ministerial task force that I referred to earlier admitted that most single-parent households would be worse off as a result of these formula changes. Professor Parkinson, who was the chair, said that it is estimated that between 55 and 60 per cent of low-income families or single-parent families may be worse off.

He presented the argument that previous child support payments taken together with other support payments, including child care and PBS et cetera, had been generous by world standards. However, this seems to contradict the statistics that show single parents in Australia make up a significant percentage of those living in poverty and it ignores the fact that welfare payments are also changing and single parents on welfare are losing many of the entitlements that were factored into the formula by the task force. The formula did not take into account accommodation, transport and education costs, because these were said to be too complex. However, the Family Court uses a different formula that does take these into account.

The overarching concern is the impact of the proposed changes on child support and the way it interacts with the wider welfare reform agenda, specifically Welfare to Work. The committee heard evidence that single parents can now expect to face further income cuts on top of the reductions that occurred when Welfare to Work was implemented by the government in July 2006. As far as we are concerned, this may be a double whammy. We are deeply concerned that some families may face further financial hardship.

During the inquiry, the Australian Institute of Family Studies indicated that no work had been done to model the combined impact of the welfare changes and the proposed reduction in child support payments on single parents. In other words, the impact of Welfare to Work has not been modelled in combination with these proposed changes. In his evidence to the committee, Professor Parkinson indicated that, while the task force was aware of the general direction of the government’s Welfare to Work reforms, they had not been aware of the details. Furthermore, he indicated that modelling took into account the already generous benefits given to single parents on welfare, which, as I said, included rent assistance and pharmaceutical assistance. However, under the new system, a parent who is with a half-time child and who is not designated as the principal carer cannot claim principal parent support and, therefore, is moved onto Newstart but loses the other eligibility criteria such as a pensioner concession card, telephone or pharmaceutical allowance. Only one parent in a shared parent arrangement can claim being the principal carer; therefore, one parent in this arrangement will definitely be worse off. They do not receive the support that they used to get as a carer or as a parent, and they may potentially be receiving less child support.

The National Council of Single Mothers and their Children suggested that up to 60 per cent of resident parents will receive lower child support payments under the new formula. The calculation by the National Council of Single Mothers and their Children took into account the reduced child support, the reduced Welfare to Work payments and the increases in the family tax benefits. That still came out as a lower payment to lower income families. This is extremely concerning to the Greens. We are very concerned that this modelling has not been undertaken and that we do not have a clear idea of the total impact on low-income families.

The committee was told that the CSA will assess all client payments under the new formula once the bill has been passed and before it comes into effect on 1 July 2008. We believe that a full and proper analysis that takes into account the complexities of the interaction between child support and the welfare systems should be done. We are proposing an amendment to that effect. We believe that, once this legislation is passed and before 2008, new calculations can be made on the combined impact of both the child support formula and the changes to the welfare system. The government needs to look at how it tops up or supports single-parent families that are going to be severely impacted by these changes.

Debate interrupted.