Anne McEwen (SA, Australian Labor Party) Share this | Hansard source

I would like to address a few comments to this important bill, the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Bill 2007, which is the third instalment in a range of child support legislation reform that the Senate has been required to consider over the last year. Although Labor has been critical of some aspects of the child support reform, we have supported the previous two packages of reforms and we will also support this one.

Labor’s main concern is the effect of these laws on low-income families. We do not want to see reforms which disadvantage families who need more support to be able to fully participate in the community. We are, of course, most concerned about the welfare of children, whose futures are intrinsically linked to the economic circumstances of their upbringing. While our concerns have been brought to the attention of the government on numerous occasions, we have not been satisfied with the response of government, and Labor will continue to monitor the outcomes of this legislation and other legislation relating to child support.

Labor has long had an interest in the welfare of children from all types of families. It was, after all, the Whitlam government that introduced the single supporting mothers’ parent pension in 1973, in recognition of the fact that women who were divorced or separated were, in the main, left responsible for the care of children, and often without any security of income. The basis of the current child support scheme was originally drafted by the Hawke Labor government in 1988 and was a model for child support schemes later introduced into other comparable countries. The principle of child support legislation is that after divorce or separation both parents should continue to financially support their children if they are able to do so. It is a principle that seems obvious to us today, but that has not always been the case. While the principle of the legislation must be upheld, we also acknowledge that reforms need to be made to the legislation which is, after all, now almost 20 years old, and many things to do with families have changed in those two decades.

One thing that has not changed is that issues of child support are always contentious. That is evidenced by the fact that all senators and members are continually in receipt of submissions from those families which are either paying family support or are in receipt of child support and who are aggrieved by the system that is in place. Indeed, the Australian Institute of Family Studies found that more than 60 per cent of non-resident fathers and 45 per cent of resident mothers think the current system is not working. Those are disturbing figures, and it is obvious that more reform is needed, although it is unrealistic to think that in such a contentious area we could ever get a system that would satisfy everybody. That said, this reform should not be at the expense of the poorest and most vulnerable people in Australia. Custodial parents and their children are amongst the poorest groups in the community and in Australia there are 1.1 million children in whose name child support is paid. We must ensure that any changes to their circumstances are for the better and do not make life even harder for those already doing it tough.

Getting to the legislative stage of these reforms has been a very lengthy process. When the House of Representatives Standing Committee on Family and Community Affairs tabled its report Every picture tells a story in 2003, it made 29 recommendations. One of those recommendations was the establishment of the ministerial task force to evaluate the child support scheme. That task force on child support undertook comprehensive research and analysis of the child support arrangements in Australia, as well as collecting statistical information on the cost of raising children. The report of the task force, known as the Parkinson report, made several recommendations, many of which were enacted in the two reform bills previously passed.

The implementation of a new child support scheme, including a new payment formula, was a result of one such recommendation. Those reforms were supported by Labor, but they were not entirely satisfactory to us. Our concerns were raised with the government then and we raise them again now, as we have not been provided with an adequate response. Research has not been conducted by the government into the effect of the new formula on families. Labor’s constant request for information led to the creation of a stakeholder reference group but this group unfortunately has been found to be ineffective and has met, as I understand it, only once. The group and, more importantly, the government, have failed to respond to the serious and pressing concerns of people involved in the issues of child support.

The new child support formula is having an impact on the lives of Australian families, so we need to know whether the formula has been a success or not. If not, we need to change the formula to advantage families and not further disadvantage them. If the government does undertake the research, the changes will of course need to be examined hand in hand with the new Welfare to Work changes because under that legislation some parents will now suffer income reduction as they move from parenting payment onto Newstart allowance. That, along with the child support changes, could dangerously affect the future of children already living in precarious economic circumstances.

While Labor is closely monitoring the impact of the child support legislation and Welfare to Work on families, we ask the government to lift its game on these matters. These children need to be a top priority of the government and their best interests must remain our focus throughout these discussions and reforms. I understand that many groups involved in these issues believe that their rights are paramount in this issue, but it must always be the rights of children and their welfare that are paramount.

As previously indicated, our chief concern is the effect that the new payment formula has on low-income families. The National Council of Single Mothers and their Children, or NCSMC, made a submission to the recent Senate inquiry conducted by the community affairs committee into this bill. That submission echoes some of Labor’s concerns. I would like to thank the NCSMC—a fine Adelaide based organisation with wonderful people who do a lot of good work to support single parents and their families—for their work. In their submission, the council reported that the:

... formula changes will create increased poverty for children aged 0-12 of separated parents in the households where they spend most of their time.

The council also found:

The “credit for care” discount of 24% applicable to non-resident parents who have contact between 14-34% will also result in increased poverty for children aged 0 - 17 in the households where they primarily reside.

Labor agree without hesitation that non-custodial parents should be encouraged to spend time with their children, and we acknowledge that those parents also face financial difficulties. I understand that this is a very complicated area and one that is difficult to get right, as Senator Moore was saying earlier on in her comments on this matter. However, Labor also believe that more effort needs to be made in getting it right, because every time we get it wrong we are further disadvantaging the children we should be trying to assist.

The current formula provides for payments to decrease at a time when, as any family will tell you, the prices of providing the most basic care and support for children are increasing. Today I noticed, for example, that petrol is being sold in Adelaide for $1.31 a litre and in regional South Australia for up to $1.41 a litre. Petrol is of course essential for most families to be able to conduct some semblance of a normal life and to contribute meaningfully in the community.

Late last year I participated in Labor’s Family Watch Task Force, which entailed surveying families in all states and territories in Australia. Consistently the price of basics such as food, petrol and child care, and school and medical expenses were mentioned by parents as something they were increasingly concerned about and often having to adjust the family budget to accommodate. For many families, particularly single parent families, that meant curtailing social and sporting activities, including school excursions, which was a disturbing result for the task force to find.

Labor does not want a system where parents and children are being left with less than they began with. This is particularly the case when looking at low-income households. Ironically, the people who most need our support are receiving the least, according to the studies of the NCSMC. Studies have also been conducted by NATSEM at the request of the ministerial task force. The studies of the NCSMC, a very well regarded research organisation, show that under the new payment system resident parents on annual incomes of $26,000 or less will incur the biggest reduction in child support payments—that is, families with the lowest incomes are going to find themselves with even less money.

According to the NATSEM studies, that formula will make the poor poorer. It is important to realise that that will not be the case for just a handful of families; according to the Child Support Agency, 75 per cent of families receiving child support are on incomes under that amount per year. It is those people that are being hit hardest by the new formula, which of course begs the question: who is the new system really benefiting? Hopefully we will find that out through government research into the true impact of these laws.

I would like to add a few comments on sections of the bill which Labor can more confidently support. It is an unfortunate fact that many people for too long have used any means possible to avoid paying appropriate child support. Many people in the system who should be paying more have been paying the bare minimum of just $5 a week—barely enough, I would think, to buy a kilogram of tomatoes or a jar of pasta sauce. There has also been notorious difficulty in getting people to pay on time. Recent reforms have led to a crackdown on those parents who do not make their payments, particularly by the Australian Taxation Office. I understand over 35,000 parents who have not filed their tax returns to avoid paying child support have been required to make good on an outstanding $13 million in payments. The Child Support Agency and the tax office should be commended for their job in pursuing that money that is due to our nation’s children.

Another section of the legislation which is encouraging to see is the extension of the Child Support Agency’s ability to collect payments. With more persons now earning their income from independent contractor arrangements, it is important to be able to recover child support payments from those individuals. Currently ongoing child support cannot be collected from parents who earn their income under those arrangements, and that means a lot of children are missing out. The legislation before us will change that so that the CSA can issue notices requiring payments to be deducted from the independent contractor parent’s income and that the payments be forwarded to the agencies. Hopefully that arrangement will mean more children are provided with the child support that they need.

I also note that in the second round of reforms those receiving or paying child support were given access to an independent review of Child Support Agency decisions through the Social Security Appeals Tribunal. That has been a useful thing that my office has been able to assist parents to access—parents who would otherwise have faced significant legal bills trying to challenge decisions of the Child Support Agency.

An amendment that Labor proposed and now supports is the change to the payment of the baby bonus to mothers under 18 years of age. Since the introduction of the so-called baby bonus, a number of concerning stories have come to light—for example, of young women who have given birth to a child for the sole purpose of securing the lump sum. I do not think that that is an approach taken by many young women, but it is disturbing to think that anyone should be living in such circumstances that they would contemplate having a child to gain a cash bonus. It has also been reported by domestic violence services that levels of abuse of young mothers rises about six weeks after birth, coinciding with the baby bonus payment, and there are young women with infants who are handing over payments to abusive partners just to get rid of the partner. This is, after all, a payment designed to assist parents in the first few months of parenthood and not to cause additional problems.

So, clearly, the baby bonus has had some undesirable effects in some circumstances. Although those cases are indeed a minority, they are enough to cause concern. Hence, Labor supports these amendments. I am happy to see, then, that the government will be paying the bonus in instalments to all parents under 18. I acknowledge that there are many loving and responsible young parents out there who will be frustrated by this change. But without it we would be leaving many young women, in particular, in a vulnerable situation. And I hope that cases like those I have mentioned will be stopped from occurring in the future through this change.

This is a good time to reflect on why the baby bonus was put in place, whether it is necessary and whether there are any alternatives. The payment was introduced by the government with some thought to increasing the birthrate in Australia. But I would suggest we have to question whether—given the problems the nation is going to face with environmental sustainability and adequate resources such as water—encouraging fertility is the way to go. We also have to acknowledge that the concept of women as baby factories has substantially changed, I hope, and we should not be doing anything to send us backwards to those days.

Australia’s fertility rate has dropped since the early 1900s but we are living in, as I said before, completely different times and it is unlikely that we will go back to having three or four children per woman, as we were in the first decade of the 20th century. Nevertheless, Australia’s fertility rate between 1994 and 2004 has been relatively stable at between 1.73 and 1.85 births. And, even if it were the decision of the nation to increase the fertility rate, it is unlikely that a payment of $5,000 would make much difference when women work and want to work and, increasingly, have to work to support their families. So, while the baby bonus is a useful contribution to the early costs of child-rearing, real assistance to families means much more than a one-off payment.

It is not surprising to note that countries with high birthrates provide a high level of support for families. Australia lags behind comparable countries in the provision of paid parental leave, and it is one of the great failures of this government that it has done nothing to redress that situation. In Canada, mothers receive 50 weeks paid leave, 35 of which can be taken by the mother or the other parent. And in the United Kingdom—again, a comparable country—mothers receive 39 weeks paid leave from their job. Those countries and others also provide quality, accessible, affordable child care—another area in which the Howard government has an appalling record. If the government were serious about increasing our birthrate, it would address these initiatives and endeavour to provide real, ongoing and practical support to families and especially women.

However, we should not expect too much of this government, which is more interested in blowing billions of dollars on advertising its despised workplace relations laws than it is in assisting families, and we should not expect too much of a government that thinks it is okay to spend hundreds of thousands of dollars on a jewelled coach for the Queen or on a bigger dining table for the Prime Minister. I had to wonder when I was doing the research for this speech how many of the children and parents affected by this legislation could contemplate spending $8,000 for a few drinks and nibbles with the Prime Minister at Kirribilli. So, while Labor supports the legislation, we deplore the government’s outrageous, out-of-control and reckless spending when the nation’s poorest children and their families are wondering how they are going to pay for the petrol to get to work or school tomorrow.