Nick Xenophon (SA, Independent) Share this | Hansard source

Family payments are a complicated policy area. It is therefore unsurprising that the changes proposed by the government in the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 have been subject to appropriately intense scrutiny in the media and most particularly by those who would be most deeply affected by them. This particular social services legislation amendment bill contains three schedules. I note that the government has amendments to this bill, which I will address shortly, but for the sake of clarity I will spend a short time going through each of the three schedules.

Schedule 1 of the bill seeks to increase the family tax benefit A fortnightly rate by $10.08 for each family-tax-benefit child aged up to 19. That amounts to an additional $262.80 per child per year for families with children eligible for this payment. It also modifies the methods used to calculate the maximum rates of youth allowance and disability support pension in order to ensure that there is no financial incentive for an FTB child—for want of a better word—to leave full-time secondary study to claim youth allowance. These changes will take effect from 1 July 2018, two years later than the cutbacks proposed by this bill.

Schedule 2 of this bill relates to payment rates for family tax benefit part B. It is also the schedule the government's own amendments relate to. In its original form, schedule 2 provided that from July 2016 a new tax structure will apply to family tax benefit part B. It also makes amendments to the rules relating to part B payments. The explanatory memorandum provides the following summary of the changes to family tax benefit part B proposed by the bill. It will increase the standard FTB B rate by $1,000.10 per year for families with a youngest child aged under one, and introduce a reduced rate of $1,000.10 per year for single-parent families with a youngest child aged 13 to 16. The current FTB part B rate for children in this age range is $2,737.50, so there is a significant difference. Schedule 2 of the bill will also extend the $1,000.10 rate to couple grandparents with an FTB child who is aged between 13 and 16. Finally, schedule 2 will remove family tax benefit part B for couple families other than grandparents when their youngest child is aged 13 or over.

Schedule 3 of the bill relates to the family tax benefit part A and part B supplements. It proposes to reduce the part A supplement from $602.25 a year from 1 July 2016, and $302.95 a year from 1 July 2017. The part A supplement would then be withdrawn completely from 1 July 2018. Schedule 3 also proposes to phase out the family tax benefit part B supplement. It will do this by reducing it to $302.95 a year from 1 July 2016 and to $153.30 a year from 1 July 2017. The part B supplement would then be withdrawn completely from 1 July 2018.

I have set that out, and it is my 'readers digest' version of the bill, because there is a lot of confusion about how these benefits interact and how they will impact on others. I have been getting many calls from constituents in relation to this. The amendments will remove schedules 1 and 3 from the bill. These schedules relate to changes to the family tax benefit part A rates and the phase-out of the family tax benefit part A and B supplements. The government is also amending schedule 2 of the bill to remove the amendments that would increase the standard rate of FTB part B to $1,000.10 for families with a youngest child aged under one. This amendment also removes the changes that would see single-parent families with a youngest child aged between 13 and 16 have their FTB part B payment reduced from $2,737.50 to $1,000.10.

As a result, the bill before us today only deals with the proposal to remove family tax benefit part B for couple families other than grandparents with a youngest child aged 13 or over. The withdrawal of this payment will occur on 1 July 2016. The supplementary explanatory memorandum sets out what that will mean. It also states that the expected savings to government from the measures in this amended bill will be $525.5 million over the forward estimates. The government has amended this bill significantly, and that is welcome. I think that what the government put up last year in the budget was draconian. It was unfair and it would have caused an enormous amount of damage to families. These changes do involve some cuts, and that does concern me. It is, however, positive that approximately 3,900 grandparent carers will continue to access FTB part B when the youngest child in their care is between 13 and 18 years old, and it will help to ease the enormous financial strain facing grandparent carers.

In South Australia, Grandparents for Grandchildren SA is a wonderful community organisation that John and Denise Langton established a number of years ago. I remember it well because I worked with them for the establishment of the organisation when I was a South Australian member of parliament. They have explained to me the additional burdens that grandparents have in relation to this. Without the help of people like John and Denise and many others, thousands of children would be worse off. And I think it is a good amendment in relation to this.

In relation to the bill before us, it is my understanding that the opposition supports this bill in its amended form, and therefore it will pass. I support the measures in this bill as amended. I reserve my position in relation to the measures that have been omitted by the amendment, including the proposed changes to FTB B rates for single-parent families as well as the phase-out of the FTB A and FTB B supplements. I do welcome the government shifting its position from seeking to cut benefits at the age of six, moving it up to 13. I call that the 'Macaulay Culkin' amendment because I feel that it would have meant many kids would have been left home alone because of the severe financial pressures it would have placed on those families. At least that is a small mercy in relation to the scheme of this bill.

So I support the bill and I am looking forward to what the government's position will be in relation to other aspects of this, because I do not want to see single parents, particularly, in effect have to subsidise the government's childcare package. So I think that there is still much work to be done, but this is at least a significant improvement on what was proposed last year.