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

by leave—I move Australian Greens amendments (1), (3) and (4) on sheet 5101 revised:

(1)    Schedule 1, item 1, page 55 (line 29) to page 56 (line 2), omit subsection 65B(2) and the note, substitute:

        (2)    The parent making the application must provide evidence to the Registrar concerning the parent’s income (within the meaning of subsection 66A(4)) to demonstrate that his or her current income is:

                  (a)    less than the pension PP (single) maximum basic amount; and

                  (b)    that it would be unjust and inequitable to expect him or her to pay the amount assessed under this section.

        (3)    An assessment issued by the Commissioner of Taxation for the last relevant year of income shall not be sufficient evidence of the income of the parent for the purposes of this section.

        (4)    If the parent makes an application, the Registrar may determine in writing that the section not apply to the parent if the parent’s current income (within the meaning of subsection 66A(4)) is less than the pension PP (single) maximum basic amount and it would be unjust and inequitable to expect him or her to pay the amount assessed under this section.

                  (a)    less than the pension PP (single) maximum basic amount; and

                  (b)    that it would be unjust and inequitable to expect him or her to pay the amount assessed under this section.

Note:   If the Registrar refuses to grant an application under this section, the Registrar must serve a notice on the applicant under section 66C.

These amendments relate to the SSAT making just and equitable decisions to child support agreements and tax assessment notices. These are recommendations that Professor Parkinson, who chaired the ministerial task force, made on the bill. I understand that the government will be supporting these amendments.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

The government will accept these amendments. We have spoken to Professor Parkinson, and he agrees that these amendments should be accepted. I might say that this is one of those rare occasions that I have had as a minister to be standing up on this side of the chamber and accepting an amendment from the Greens. Senator Siewert, we congratulate you. We have had to wait 10 years for this, but this is quite an achievement for you. As I said, the government will be accepting Senator Siewert’s amendments.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I indicate that Labor will also be supporting the amendments, although I am a bit concerned about the unholy alliance that has developed over these amendments! My first reaction was to vote against them purely on that basis. If Senator Kemp agrees with you, Senator Siewert, you have obviously made a huge error! But they are useful additions. Our second reading amendment, which was defeated, went to the same sorts of concerns about measuring the impact of the changes as well as the SSAT issues. We think they are helpful.

We still have very serious concerns about what will happen to the losers out of the formula when the measures are implemented on 1 July 2008. I still think that is the primary issue. We will continue to campaign to make the government focus on those issues. Hopefully, those issues will be for a Labor government to address. But whoever is in power at that time will have to focus very much on the impact of these changes on individuals. There will be losers, and we have to ensure that whatever is implemented protects the interests of children at that time.

While it is a fact that we cannot predict outcomes, because each individual family will have an individual outcome, Professor Parkinson has identified the fact that there will be families who will receive less income as a result of these changes. There are a whole range of positive changes, including compliance, but there will be losers, and they will be in families caring for children. We have chosen not to oppose the bill, but we remain deeply concerned about those issues. We will continue to press for proper consideration of them and for a proper government response in dealing with those who will be worse off under the formula. The amendments moved by Senator Siewert are helpful, and Labor will be supporting them.

Question agreed to.

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

I move Greens amendment (2) on sheet 5101 revised:

(2)    Schedule 1, item 1, page 68 (after line 19), at the end of Part 5, add:

Division 10—Modelling and analysis of the assessment formula in this Part

79A Modelling and analysis of the assessment formula in this Part

        (1)    The Minister must:

             (a)    cause an independent review of the combined impacts of the welfare to work provisions and the assessment formula for child support to be completed nine months before the commencement of this Part; and

             (b)    establish an independent review committee to oversight the review in paragraph (a)

        (2)    The review committee established in subsection (1) is to consist of:

             (a)    a departmental representative from the Department of Employment and Workplace Relations; and

             (b)    a departmental representative from the Department of Families, Community Services and Indigenous Affairs; and

             (c)    3 members from community based organisations with expertise in family law, community services and child welfare; and

             (d)    2 academics with expertise in community services and economic modelling.

        (3)    The review committee must:

             (a)    conduct an analysis of the combined impacts of welfare to work provisions and the assessment formula for child support in this Part; and

             (b)    use the services of a reputable economic modelling agency with relevant skills and experience to undertake economic modelling and analysis pursuant to paragraph (a); and

             (c)    make recommendations to the Minister, with reasons for the recommendations, about possible support measures for those disadvantaged as a consequence of the interactions between the child support assessment formula and the welfare to work provision; and

             (d)    report on its findings to the Minister by 1 July 2007; and

             (e)    to consider any additional matter referred to it by the Minister and make recommendations to the Minister on that matter with reasons for the recommendations.

        (4)    The Minister must cause copies of the review committee’s report to be laid before each House of Parliament within 15 sitting days of that House after the Minister receives the report.

I think this is where the government and the Greens part company, so hopefully some of my reputation is saved. This amendment goes to some of the issues that Senator Evans just touched on—that is, looking at the impact of the formula on low-income families. It requires some modelling to be done and for that to be taken into consideration when the formula is being worked out. As I outlined in my speech during the second reading debate, the Greens have a great deal of concern about the fact that modelling was not carried out on the combined impact of the Welfare to Work provisions and the new assessment formula for child support. We have some concerns about, as I also articulated in my speech during the second reading debate, some of the impacts of the new formula and the fact that it will be lowering incomes for some families. We are talking about families who are already on low incomes and therefore the impact could be quite severe.

When you combine this with the lowering of income through Welfare to Work, there were a number of submissions—for example, the National Council of Single Mothers and Their Children—that pointed out that this could have a significant impact on low-income families. So we believe that there is time to carry out modelling of the combined impact and, given that this has an 18-month lead time and the final formula will not be implemented until 2008, to look at the new formula, to look at the impact on clients receiving child support by implementing the formula and to see if something can be done to redress those issues. We believe this amendment is important to facilitate that modelling through an independent review, getting some experts on modelling and making some recommendations to the minister on implementing the formula.

As I understand it, the Child Support Agency will be calculating the reformulation before 2008—they told us that during the committee inquiry. So I see no reason why the modelling could not be carried out and for the new formula and its interaction with Welfare to Work to be considered, as it is reapplied to all child support agencies, to see which families will be significantly affected and make adjustments for that.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I am waiting to see if Senator Evans is going to respond.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I first want to see whether you are going to agree with us.

Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I think you are stretching the friendship here, Senator Evans. To agree with three amendments of the Greens has been a huge effort, but Senator Siewert so often argues a very persuasive case. We listened carefully and decided we could agree with the first series of amendments but, Senator Siewert, it will not come as a shock to you to indicate that we will not be agreeing with amendment (2).

I would like to make a couple of points. The new formula does not come into effect until 2008 and, from the government’s point of view, it is meaningless to consider the implications while there is still an extended period of time for parents to change their arrangements as they come to understand the new scheme and especially since, during that time, more than 700,000 cases will be individually reviewed by the Child Support Agency. The data, I should also point out, is not available until the Child Support Agency does that review.

Other avenues from the government’s point of view are more appropriate to examine the effects of the reforms in combination with other government policy. Let me list a number of them: the ongoing work of the performance monitoring and research working group, which reports to the steering committee overseeing the child support reforms; modelling of the child support reforms and other government policy as proposed by Professor Patrick Parkinson, chair of the ministerial task force—the government is committed to ongoing monitoring of the effects of the scheme as recommended in the task force report; and research and evaluation already scheduled to be carried out over the next three years. That is quite an impressive list. It includes the establishment of a baseline dataset; research into labour force participation of parents—that is, payers and payees; research into the cost of child care; survey of community attitudes; survey of client satisfaction with the Child Support Agency; investigation of the reforms on the compliance with child support liabilities; and, finally, collaborative work on mental health, parenting patterns, family relationship services and changes to overall financial support, including the Welfare to Work changes.

Senator Carol Brown made a number of observations in her remarks. I have got some advice, which may provide comfort to Senator Brown, that ongoing consultation will happen through the child support national stakeholder engagement group. Members include the relevant government agencies, advocacy groups, customer representatives, research organisations, review bodies and service providers, including ACOSS, the Australian Institute of Family Studies and the Commonwealth Ombudsman. The first meeting is on 13 November.

We all accept these are significant reforms. We understand the concerns that you put forward, Senator Siewert. I hope you feel that the responses the government have made are adequate. We are equally keen to make sure that there is ongoing consultation to monitor the effects of these changes, but we will not be accepting the amendment that you have proposed. However, as I have said, there is a great deal of ongoing work which will be done and I think that should give some comfort to senators.

In a former manifestation I was the minister responsible for the Child Support Agency, when it was attached to the tax office, and I am well aware of the challenging nature of that particular area of the portfolio, the difficulties that are involved and the balancing of decisions that governments have to do, and I congratulate the minister involved on bringing these reforms so far. It has been a mighty effort. I know that a lot of work has been done with other senators, and a lot of people have made significant contributions. Senator Siewert, we have listened carefully to you, as we always do, but we will not be accepting this particular amendment.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I indicate that Labor will support the amendment. The minister’s assurances are similar to those that were given to senators, including Labor Party members, in a briefing by the department organised by the minister’s office—for which I thank him—but, quite frankly, they are not reassuring enough. I am concerned that a lot of those reviews do not go to the heart of the matter, which is the impact on families from 1 July 2008, when—bang!—their conditions change. I think we do need to know, before that date, what the impact of the changes will be. I do not want to have a situation where the government tells us three years later, after all its reviews have occurred, that there were problems, people did suffer and, ‘We are going to implement some improvements some time down the track.’ That is the greatest fear.

Labor have supported the Parkinson review and its implementation package. We have given bipartisan support. We have tried not to politicise what are very major changes to the child support system, but on every occasion we have sought to stress our concern about the impact on families who may be disadvantaged under the new formula and the effect on people caring for kids who will have less income as a result of the changes. They are the issues that the Parkinson review identified, warning about those changes.

It seems to me we have an obligation as a parliament to be right on top of those issues and to make sure that we have the ability to make an appropriate response, and I am not convinced that the government is organised in such a way that it can do that. I would think that as a sign of good faith, given the support the government has had from the parliament on these issues, it should be able to commit to a process that is much more rigorous and allows far more speed in analysing what occurs. I take on board all the arguments about the 700,000 cases that will have to be reviewed and the complexity of that; in fact, I still have my doubts that you will get there by 1 July 2008. With no disrespect to the staff involved, the reality is that huge government system changes have not gone smoothly in the past. If this one goes smoothly, it will probably be the first, and it is a very complex system the government is seeking to implement.

So I do not underestimate the problems. I do not question that the government is not in a position to provide all the information we would like to see now in terms of the impact on people. Other than the modelling that was done for the Parkinson task force, we are unable to go further at this stage—and I accept, when I am assured that is the case, that that is accurate advice. But I know that in the first stage of the implementation of the reforms, when the high-income earner issue was addressed, a number of families got very little notice that their income was going to be reduced. I got a number of letters from people who were seen in the system generally as being better off because the main income earner, the non-resident income earner, was on a high salary and therefore the amount of child support paid was quite high. Nevertheless, there was a substantial cut in income to the resident carer, even though that came off a high base. We all live according to the means that we have at any one time and, for a number of those people, those changes did apply pressure. Most people, like me, live on the basis of spending 10 per cent more than they earn, it seems. But the reality for them was a sudden drop in income and a need to make adjustments to their lives with very little warning—and they were rightly concerned about that.

What I really want the government to focus on is that that is the threat that will come with these changes. That is the issue that the parliament and the government have got to be right on top of, and the assurances the government have provided to me are not sufficient to ease my concern. They are not sufficient to ease the concerns of Labor senators and members more generally, and we attempted in our second reading amendment to raise the same sorts of issues that Senator Siewert has—the same sorts of issues that members from both sides have been concerned about. The government response is not adequate. I do not impute bad motives to them, but, come the day that the changes hit, there will be problems for people, and I think the parliament ought to know as much about those as we can beforehand and the government ought to have considered what they can do to help. So I will be supporting the amendment moved by Senator Siewert, but I will also be letting the government know that this is not going to go away and we are going to be constantly focusing on this issue until we get a more adequate response.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.