Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Hansard source

The Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015 introduces a 2015 budget measure to provide more generous support for families with dependent young people who qualify for certain youth income support payments. This is a particularly complex area of legislation and, for many of us, every time we think we understand how all the family tax payments work, it slips away from us in the night. I just want to put on record that this is a complex area and this bill does address a range of payments and eligibilities which are significantly complex. I am going to run through what it does. But it does not really take into account, when you actually read through this, just how much the interrelation of systems can make the situation very difficult for people to understand what can seem to be a very simple measure. When you first read this, it does seem to be a very simple measure, to make more generous support for families with dependent young people who qualify for certain youth income support payments. That may seem to be very straightforward, but the work involved is not.

This bill contains the following elements—all the dates are from 1 January 2016, and then one is from 1 January 2017. From 1 January 2016, the bill removes family assets tests and family actual means tests from the youth allowance parental means test arrangements. The bill also aligns parental income test exemptions for youth allowance with existing arrangements for family tax benefit part A. The bill removes maintenance income from the youth allowance parental income test assessment. Also, where a family has a dependent child who receives an individual youth payment, that is parentally income tested. For younger siblings who qualify for family tax benefit, the family pool for the youth parental income test will include all FTB children. Also, from 1 January 2017, the bill applies a separate maintenance test for the treatment of child support, like that currently applying to family tax benefit part A.

The bill will mean extra support to young people living with families with higher levels of assets. When the bill was introduced in the other place, the minister said:

Removing complex and unnecessary means tests and improving the operation of the parental income test is a good first step …

…   …   …

This bill is boosting assistance for working families, particularly in rural and regional areas, and better supporting young people into study to build their careers, develop economic opportunities and contribute to our economy.

The recommendation for these changes allegedly came from an interdepartmental committee that was working to ensure that access to higher education for regional and remote students would be made easier. Two of the IDC's key preliminary findings were that:

… for regional and remote students: cost, socio-economic status and distance are barriers to accessing higher education; and inequities in the Youth Allowance Parental Means Test arrangements create difficulties for some families.

That is the premise on which the bill has been introduced.

Labor will be supporting the bill. We will be supporting it because there has been a long-standing demand from families who live in remote and regional areas that the circumstances around their access to payments are more difficult, particularly in cases where people are, simplistically, asset rich but income poor. That has made it more difficult for young people to actually receive payments when they go into university studies.

These arguments have been around for a long time, and we have been listening. The Senate Community Affairs Committee, which did an on-paper review of this particular process last week, received a number of submissions that supported this payment. They came from organisations with which we are very familiar, such as the Isolated Children's Parents' Association, which indicated that this payment was particularly important for the young people there. They said in their evidence to our committee:

Currently the aspirations of rural and remote young people are being driven and dictated by their ability to access financial support to assist with relocation and living costs while they study.

They gave us a number of case studies, one of which I actually recognise from having talked with people in this area. It is a case study about people who live outside Longreach, an area I know very well. They put forward their case as to why they felt that they have had disadvantage in getting support to allow their kids to take up higher study. They said their children are looking at that. They said:

I believe these young people should be encouraged, nurtured and supported into a positive learning environment so that we can have educated rural talent returning to agriculture. We are losing them at an alarming rate, without support from government for remote families and youth to enable them to continue study; we will not be sustainable for the future.

There are other quotes in our Senate inquiry report that refer to the fact that the bill should enable:

… a larger number of geographically isolated students the option to take up tertiary studies the year after finishing school and reduce the risk of not returning to study after deferring, by giving them some financial support. Once a rural and remote student qualifies for dependent Youth Allowance, they are then able to access the Relocation Scholarship and Student Start‐up Scholarship thus further assisting this group of students to access university courses.

Labor will be supporting this legislation, which is actually a cost to government—the government is putting money into this process—to allow some young people in remote and regional areas to have access to payments that they have not had in the past. The government is investing in this group of young people, but we know that at the very same time that the government is introducing this legislation they are also talking about stripping money away from other young people with equally strong demands for support. We have spoken at length in this place about some of the attacks that have occurred through budget savings measures the government has put in place that look at removing entitlements and support for other young people and for other families.

I just want to put on record that it is difficult to actually understand why the process around these payments for young people and for people who are supporting families are being considered differently. In many ways, there seems to be a confusion in priorities about where the savings measures will be put in place. These are savings measures where, as we heard originally in this place, young people who are seeking work were actually going to be penalised for extensive periods without being able to access the social welfare system for any purpose, not just for one waiting period term, but in a rolling series of disadvantage.

So, at the same time that the government is saying that this particular role will be worthy of support, we saw that young people under 25, in the process of a number of budget savings, were to be forced to live on nothing for a month. Also, young people under 30 were to live on nothing for six months, in a rolling way. It means that we are not looking across the board to see how we can best use the limited resources we have—and it is important to understand that we do understand the need for sensible budget processes. We do understand the need to look at fiscal savings. The Labor Party has been negotiating with the government over a period of budget enterprises in this place to see what we can support. We have, which is on record, the number of budget savings measures that Labor has supported, often in very tough circumstances, balanced against those that we in this place have urged the rejection of. So far, a number of what we consider to be the worst changes have been rejected. What is important is to ensure that we listen to the people in the community who are coming to us to put forward their claims as to why they should receive support and why governments should listen to them about the circumstances in which they are living.

In terms of the community affairs committee process around the bill in front of us, whilst most people were strongly in support of the changes—because these changes will make it more accessible for young people from regional and country areas to access the opportunities of education—there were some serious questions asked about whether this was the best way to do it. From ACOSS and the National Welfare Rights Network there were questions raised about whether this bill was the best way to look at equity in the system, and whether changing assessments was treating these families in a similar way to other families in the community. I think that it is important that we understand where these arguments come from. ACOSS said that there is no clear justification for this measure and that the:

… basic principle of our income support system is that people who have the financial means to provide for themselves do so. Any inconsistency in the treatment of assets between youth and family payments could be dealt with by extending assets testing to family payments.

That was part of a longstanding debate that continues now about the best way of looking at the equity of arrangements. ACOSS and Welfare Rights were pointing out that, if we have different ways of having assessments, it could lead to varying outcomes for people who are all seeking to have support, particularly in the areas of access to education and access to family payments.

The department came back and talked about one of the major issues that was raised in the explanatory memorandum to this bill and also by ACOSS and the National Welfare Rights Network. There was the very strong and worthwhile expectation that the changes would favour people who we used to call the 'assets test income poor', who had separate assets tests because they happened to have large elements of land, particularly in regional areas. There was the concern about whether the measures in this legislation would then lead to an unexpected consequence, which would mean that people would be able to minimise their tax exposure by having large trust accounts, and they would be able to change the way their circumstances could be handled in the taxation system. There were concerns about whether they would be benefitted by this legislation in a way that was not the expectation of the people in regional areas and how they could be best supported.

The department did come back and give extra information, and I think it is important to read that into the record. The department addressed the situation of family trusts where income is allocated to trust beneficiaries and then loaned back to the trust. The department advised that such arrangements are already captured in either the Parental Income Test or Personal Income Test arrangements and said:

Distributions to parents from the trust are assessed under the PIT, even if the funds are loaned back to the trust. This is the same outcome as under the FAMT.

Of the concerns raised about whether there would be unexpected consequences, the department's view is that the system has the ability to assess that in a straightforward way, and there would not be this imbalance. I think that is important because concerns were raised from a number of organisations that work extensively in the welfare area. We need to have open discussion to ensure that eligible people receive their equitable entitlements. That is the basis of our welfare system. We support this change because we believe that there is a genuine need to ensure that people have access to financial support to allow dependent children to access education. We should also be looking to try to make sure that the system is as clear, transparent and equitable as it possibly can be. (Time expired)