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

I stand to make a contribution to the debate on the Family Tax Benefit (Tighter Income Test) Bill 2014. This bill proposes to change the family tax benefit A income test from 1 July next year. It probably will come as no surprise to Senator Leyonhjelm that we will not be supporting this legislation. We think that, if we are going to be targeting how we actually make savings in the budget, there are other ways to be doing that than once again having a go at low- and middle-income families in Australia, and I will go into where we think we should be getting more revenue during my contribution.

This bill, as has been pointed out, will adversely affect 5,530 families who have incomes between $50,000 and $65,000 and are in receipt of child maintenance payments, and 242,070 families with incomes over $65,000; most of these incomes are between $90,000 and $95,000. The bill proposed by Senator Leyonhjelm continues to pursue, basically, the government's agenda of asking low- and middle-income families to bear the brunt of cuts and lets the big end of town once again off scot-free. This bill cannot be seen in isolation and needs to be seen in addition to the range of budget measures that the government is proposing that will make life harder for Australians. We have the GP co-payments and sweeping changes to the social security safety net, increasing the retirement age, targeting young people, reducing pensioner supports and, of course, removing the pension education supplement. These all combine to hit many Australians and those that are doing it toughest. The federal government is clearly willing to cut some citizens adrift and to see them hit by this budget. We are deeply concerned that this bill basically does the same.

I tabled yesterday in this place the report of the Senate Community Affairs References Committee inquiry into income inequality. That gives us a picture of what is happening in this country. We called it Bridging our growing divide: inequality in Australia, and that is because we have seen from that inquiry that income inequality, as gauged by various measures, has increased. There are various ways that you measure income inequality, but these studies show that income inequality has increased from the mid-1990s to now. Yes, there have been little steps, little dips and increases over that period of time, but the data shows that income inequality has increased in Australia. The study also showed that the likely impacts of the budget measures would be to exacerbate income inequality and poverty in Australia. There is substantial evidence from the inquiry into the social security budget measures about the impacts of the cuts on individuals and families, and the cumulative impact of these budget measures was a recurring theme during the public hearings for the social security bills and also in the income inequality inquiry.

The fact is that we do have growing inequality in this country. Income inequality has deleterious effects on people, and there are numerous studies to show that. Richard Wilkinson's report clearly shows the impacts of inequality around the world on people's health, people's access to opportunity—and I will come back to that—and in fact on productivity. Even the IMF—and the Greens are not always known for quoting the IMF—are now thoroughly convinced of the impacts of growing inequality. They did a paper earlier in the year on redistribution, and also Christine Lagarde has made several comments about the impact of income inequality and inequality on productivity.

This issue, from my perspective and our perspective, is not only a fairness and moral issue, an ethical issue, about not leaving people behind. If you do not get that argument—and I am distressed that people do not—listen to the productivity argument. Listen to the argument about the fact that income inequality and inequality have an effect on productivity and have an effect on our economy. In these days when the government keeps talking about the need to tighten the belt and get us out of deficit, increased productivity will address income inequality, because that is one way that you start addressing productivity and helping our economy. For the Right in particular, if you are not engaging with that argument about the need to ensure that we have a fair and just community, if you are solely concentrating on the argument that economics brings everybody up and raises all the boats—and we know from the income inequality inquiry that in fact just improving the economy does not raise all the boats, and I will go into that in a minute—we know that, if you are growing the economy and increasing productivity, you need to be making sure that you are still putting in measures that make sure that all the boats are floated and that just 'fixing the economy' does not do it. The point that is clearly being made by the IMF is that you need to make sure you fix inequality to fix productivity and to help fix the economy. It is not just a one-way issue there.

In the income inequality inquiry—which I think is very important in this debate, when you are talking about income inequality; I have already been into the issues around impacts on productivity—we looked at the impacts that inequality has on people's access to opportunity, the entrenching of inequality and the entrenching of poverty and what that does to people's social mobility. And that is also linked to access to opportunity. What the research shows is that, by not addressing income inequality, you are actually impacting on people's social mobility and access to opportunity. In other words, people are not able to access education, adequate health services or affordable housing.

The issue around affordable housing here is extremely important, because what we have seen—and Senator Ludlam, who is our spokesperson on housing and homelessness, knows this very well—and what has come out very strikingly during the income inequality inquiry is that access to decent, stable, affordable housing is critically linked to income inequality. The fact that people are not able to have safe, sustainable, decent, stable, affordable housing is intimately linked to their capacity to gain employment. To have stable accommodation is linked to being able to have a job and gain access to employment and other services.

The issue around affordable accommodation is two things. One is supply. We do not have that supply yet, and there are a number of reasons for that. One of those is that the federal government now seems to be extracting itself from issues around housing and homelessness and has now put off dealing with housing and homelessness to one of its Federation discussion papers. But the federal government is critical in the supply of affordable housing, because it has the policy levers. It has money, obviously, and we want it to be investing money, but it has the policy levers as well. So it is critical.

The point here is that there is the supply issue but there is also the affordability issue. People on low and middle incomes cannot afford accommodation. The evidence to the inequality inquiry showed that people can be spending up to 70 per cent of their income just on rent. So, if you are spending 70 per cent of your income on rent, how can you afford some of those other basics? Then you have utilities and essential food, and that is, of course, one of the issues that drop off, because that is where you have some control over your spending. You have a bit of control over your spending on food, so that gets dropped off. Then, of course, how do you and your family afford all those extras that kids need to address their education and their extracurricular activities? We also know from the evidence received that it is the extra add-on things when you are growing up that help you gain access to opportunity and help you get the best out of your education—help you access education.

So, if you have a very low income, whether you are on income support or are one of the growing band of working poor in that area of insecure, temporary work, it is very difficult for you to get ahead, because what happens is that you are in this cycle of temporary or casual employment. We know there are a group of people that are stuck in this process. You are going off and on income support, but to go back on you have to have worn down all your assets, so you never get ahead, again being denied access to opportunity. To think that $50,000 in this day and age is sufficient—that is one of the bands that will be affected by this bill—is ludicrous. It simply is not sufficient for people to do the things that I have just been talking about—in other words, to gain that access to opportunity.

Bearing in mind all this information—the government knows about issues around income inequality, because the Treasury has done papers on it and there has been a lot of work done on it, and there is more work that we have brought together under the income inequality inquiry—what the government does is to put in place a budget that will have significant cumulative effects on many families. As these numbers of measures combine, they reduce people's access to income support and to other assistance. The impact of the GP co-payment, particularly for low-to-middle-income families, is very significant and it does put people off accessing the health system, which then obviously has roll-on impacts. It does make it more difficult.

The so-called higher education reforms—I don't like calling them reforms; I call them so-called reforms—will have a significant impact, particularly on people on low and middle incomes, or they would have. Obviously they were kicked out of this place, but the government is talking about bringing them back. Again, what they are talking about will have an impact on low- to middle-income families.

We are dealing with real people's lives here. These are people who are struggling to make ends meet and who are dependent on every cent to help them address the huge issues around renting. There is a new study which just came out a couple of days ago from AHURI that shows the impact of not having your own home and the fact that it is getting more and more difficult for those in the rental market. Of course, people are caught in that cycle. If you have a low income, you lack access to opportunity and you are not able to build up your nest egg through the circumstances I have just talked about. It becomes a never-ending cycle where you are stuck in the rental market, getting further and further behind.

This budget has a significant impact on low- to middle-income families and the government knows that, because the government's own modelling showed that. But it still went ahead and brought those measures in. NATSEM's modelling also shows very similar results, because the government was using a model that I understand NATSEM helped to develop. NATSEM has gone on to develop this further. The point is the modelling showed that the biggest impact of the budget was on low- to middle-income families, and what does this measure do? It tightens the screws even more. Do you think the Greens are going to be supporting something like this? Not on your life. We will be supporting measures that assist low- to middle-income families.

I used to have some sympathy for the argument about this so-called middle-class welfare. But when you look at the role that family tax benefit A and B plays for low- to middle-income families it is very important. It is very important for those families and gives us an opportunity to start addressing the growing divide between the people who are doing very well, in the top quintiles, and those who are doing very poorly. It is not just people in the very lowest quintiles who are doing poorly.

We know that this budget is going to have a negative effect on low- to middle-income families, those who are on income support and those who are on low incomes, particularly the group people call the working poor. We are seeing a growing number of working poor. But what we have here is a bill that would hurt those at the lowest ends of the income quintiles, when the government has virtually let the big end of town off scot-free. That is what Senator Leyonhjelm does with this bill.

There are measures that could have been pouring money into our budget coffers by now—things like the mining tax. They voted to get rid of the mining tax and it should have been tweaked. The Greens are well on the record saying the mining tax that came in was not as adequate as it should have been. Instead of fixing the problems, they got rid of it. Money was just thrown back to big business. It was the same thing with the carbon price. Money would have been pouring into the coffers now and that would have helped our revenue base. They are refusing to deal with the tax concessions to the big end of town, to the mining companies. They refuse to deal with the diesel rebate for big mining companies—again a revenue stream they could have had.

They are not sufficiently cracking down on tax evasion, because they have sacked so many staff in the tax office that it cannot possibly do the work that used to be done. Of course, then there are the tax concessions to the big end of town. There are the tax concessions that are very clearly articulated in the income inequality report. Are they showing significant backbone to start adequately addressing that revenue source? No, they are not. They are going very slowly on that, but they are having a so-called crackdown on income support.

Australia needs to look at where we can get revenue beyond attacking the most disadvantaged in our community. By attacking that, they are actually attacking productivity, as I said. If we have a growing divide and growing income inequality, that hurts the most vulnerable but it actually hurts our productivity as well, because the more you attack them the more you increase that divide and that income inequality.

As I said, modelling from the Treasury shows that the spending cuts in the budget cost an average of $842 a year for lower-income households, while the average high-income family lost only $71. Here we have another bill that starts trying to rip money off those people that are not doing as well. They are not having their boat floated when income is rising for others. Not all the boats are being floated, and that was clearly shown by the work done by the Bankwest Curtin Economics Centre. That clearly showed that the impact of the boom in Western Australia has not flowed through to everybody.

At the same time, in my home state of Western Australia—because that was done in the boom in Western Australia—you see WACOSS talking about the cost of living. I want to put this into context so that you see that not everybody has gained sufficiently in Western Australia. The lower quintiles have not gained as much as the higher quintiles, and income inequality has risen in Western Australia over the boom period. We have the fastest growing income inequality in Western Australia. WACOSS—the WA Council of Social Service—does a yearly cost-of-living survey, and in 2014 it found:

… housing remains the major weekly expense facing … households. The unaffordability of Perth's housing market for households on low and fixed incomes remains a significant concern for the Council and its members, particularly those delivering financial counselling, emergency relief and community legal services. The cost of housing remains the biggest single driver for households facing financial crisis.

They also found here that, while the cost of living had stabilised a little bit in Western Australia for some, what has happened with the comedown from the boom a bit is that the lower income households have remained static and have not improved their situation. They think that is because they were not able to gain sufficiently through the boom and so, while prices have continued to rise, they have stabilised. Their situation has not improved, while the situation of some of the higher-income households has improved.

Anglicare's Rental affordability snapshot for 2014 found that less than one per cent of rentals in Perth were affordable to people on benefits and pensions, and only three per cent were affordable for families on a minimum wage. The affordability was calculated at 30 per cent— (Time expired)